Management and ethics, an oxymoron? 1

[jmw]

This article interested me:

http://www.rabble.ca/news_full_story.shtml?x=47094

While it doesn't say so explicitly there are aspects of this that make one question the ethics of many other companies.

Quite often the excuse offerred by management for any action they have taken is "they have a legal obligation to the shareholders". To me this ranks aalongside the "I was just following orders" excuse and perhaps we need a "Geneva Convention" in the workplace.

Some aspects of this legal framework should, I think, be changed... the law is something that can be changed.

Perhaps we should also take account of a "conflict of interests" i.e. this is a self serving defence since company directors are also shareholders and sometmes one suspects they act more in self interest than not.

For example, in one company (I am sure it is typical) worker pay rises were year on year kept low, some years deferred and some years non-existant.

The excuse was always there.
Often there would be at least one company in the group that would be in "difficulties" in its own particular market.

For the workers in a profitable company this was a bitter pill since they were expected to sacrifice to support the company in difficulty.
Fair enough, you may say.
However when the ailing companies market perked up the management sold the company on for a substantial sum and shared the money out among the shareholders, principal of whom were the company directors.

The workers did not receive even a letter of thanks, let alone any financial reward. No Quid Pro Quo and effectively the workers were financially supporting the company without it having to "go to the city" or finance the ailing business in any other way. Workers are often a source of free financing.

And that is the point: that the workers were financially supporting the company, under duress and with no recompense. Many were actually made redundant in pursuit of the "bottom line".

This is what happens in a country where the government lays claim to supporting a "stakeholder economy" and economy where the workers, amongst others, are considered to have an "interest" in the company.

High time perhaps for a review of the legal obligations of company directors and high time for some more protection for the workers?

Or is it just me?



JMW

http://www.ViscoAnalyser.com

 

[RDK]

I think that the ethical and legal standards are in place for ethical management.

However they are not often enforced nor applied.

A lot of what you are calling unethical behavior is simply short sighted management thinking. There is no ethical reason why management should pay more for workers than they can get the same services elsewhere.

It would actually be unethical for management to pay more than necessary for workers or any other good or service.

If the workers are willing to stay for low wages then why should management pay more? The only reason that I can think of is to ensure worker loyalty when things get better.

Would you consider it unethical for a worker at a well paying company to take an even better paying job and leave his former company behind? This is simply the flip side of the coin you are using to call management unethical.

There is room for judgment in worker salaries or even the price paid for any good or service. This is to ensure continuity of supply and high quality in that area. Management will pay the least in many cases because they are bound to increase return to the shareholders and they do this in the short term

A lot of managers have their job security tied to share values and dividends. The liquidity of the stock markets makes this a very short term view instead of taking the long term view of maximizing returns over many years.

If managers took the longer term view then they would look at salaries and other benefits as investments in securing a stable worker supply over the long term. However the stock market only rewards the short term viewpoint. Hence outsourcing to third world countries.

As far as government supporting a stakeholder economy that simply sounds like empty jargon used to get re-elected.


You sound like someone who has worked for a company that has not increased salaries for a while.

Why don’t you show the management of your company that you will not work for this salary and quit and find a job that pays you what you think you are worth? Could it be that there are no other companies out there that think you are worth as much as you do?

You will be better off finding such a job then stay behind and get more and more bitter with passing time. Life is simply too short to live it as a bitter person.

If you cannot do this then accept your lot in life and look for personal fulfillment elsewhere in life, with family or social outlets.

Better yet start your own firm and you can see how long you can stay in business paying more than market price for inputs and only getting market price for the products that you sell.


Rick Kitson MBA P.Eng

Construction Project Management
From conception to completion

http://www.kitsonengineering.com

 

[CajunCenturion]

One of the very interesting aspects of ethics is that it exists at many levels. Often, the same situation with have competing ethical obligations at different levels.

A company has an ethical obligation to maximize the return on investment to its shareholders.
A company has an ethical obligation to provide its customers a good product at a fair price. Depending on the product, that may include down the line support.
A company has an ethical obligation to compensate its employeers fairly and equitably.
A company has an ethical obligation to be good stewards of its environment.
Some might also claim that a company has an ethical obligation to give back to its community, and I'm sure other ethical responsibilities can be defined.

Of course, one might claim that the over-riding ethical obligation of any company is to remain solvent, and to stay in business. Otherwise, it cannot meet any other ethical obligation.

In any event, there will alwyas be give and take between these competing ethical responsibilities, and the key is to find the right balance.

Good Luck
--------------
As a circle of light increases so does the circumference of darkness around it. - Albert Einstein

 

[arunmrao]

In a pro leftist environment it is the workmen who get the place of prime importance,share holders and creditors come much later.

You might find it difficult to comprehend like the many MNCsin India who are now discovering this fact.

RDK I am personally in a situation where I pay more and receive less thanks to the shortage of skilled workmen and competition from China.