Problem
Taking part in a multi-dimensional dialog, which working in the global economy presupposes, invites the need to reconsider the ethical principles, which the corporate decision-making processes are based on (Belak & Milferner 2011). As a company enters the environment of the global economy, it becomes open to new opportunities and challenges, as well as new communication patterns, which requires that the key ethical principles lying at the basis of the organization should be reconsidered.
Particularly, the ethics principles, which are traditionally viewed as the prime set of concepts that a company should be guided by in decision-making, may be changed or even abandoned by the companies that enter the global economy realm.
Background
Virtue ethics is typically viewed as one of the concepts that may cease to exist in the realm of the global economy due to the increasingly high competition rates. Forced to alter their ethical principles to adjust to high competition rates, global companies may bend their ethical standards so that the outcomes of the decision-making process could result in the company benefitting in the target market and taking as few costs as possible.
As a result, the very concept of virtue is the basis for ethical standards within a global company is becoming nearly laughable in the environment of the global economy. The problem, therefore, concerns not the fact that virtue ethics principles have been abandoned by global companies, but the fact that many leaders believe that there is no room for virtue ethics in the global economy.
Virtue Ethics
Even though competing in the realm of the global economy means refraining from viewing the world in black and white, ethics still remains an integral part of any organization, be it international or local. A range of companies have developed their own concept of ethics, which is based on the specifics of their operations, the services that they provide, the target denizens of the population, whose needs they cater to, etc.
As a result, ethics continues to be one of the building blocks of modern organizations. However, when it come to identifying the type of ethics that companies prefer to choose as the framework for their communication and operations, a number of companies have abandoned virtue ethics as a concept. Instead, companies rely on the tenets of utilitarianism (Asgary, Walle, & Saraswat 2014).
The phenomenon in question can be explained by the increased rates in global competition. To retain their positions in the environment of the global economy, companies have to compromise, and ethical dilemmas often turn out to be the issue that needs to be addressed. Seeing that virtue ethics presupposes compliance with moral principles and that morality is often opposed to financial benefit in business, companies need to abandon the concept of virtue ethics in order to stay afloat in the realm of the global economy.
However, it would be wrong to claim that the concept of virtue ethics no longer serves as the basis for the key tenets of the principles of organizational behavior, corporate ethics and leadership styles in modern companies. Quite on the contrary, with the creation of the global economy and the resulting culture clash, the need to embrace the concept of virtue ethics as the middle ground for the representatives of different cultures to create strong relations on has emerged (Baldo 2013).
Taking a closer look at the present-day ethical environment, in which most global companies have to operate, one must admit that the ethical principles based on a comparatively recent theory of contractarianism have become quite common. The specified phenomenon is quite understandable, as the ethical standards may vary depending on the culture of the people representing the company.
Seeing that intercultural interactions are unavoidable in the global economy area, compromises have to be made, and contractarianism is the exact example of such compromise (Sauser, Sauser, & Sims 2014). Confining organizations to a set of ethical standards that have been designed specifically for their cooperation, the above-mentioned philosophy is traditionally identified as “a theory of how social rules can be rationally justified on the basis of the mutual advantage of individuals who live under those rules” (Thrasher 2014, p. 42).
Solutions
The promotion of virtue ethics in the realm of the global economy is also enhanced by the introduction of the principles of corporate social responsibility (CSR) into the organizations’ operational design. CSR is usually referred to as the tool for empowering the staff for understanding the significance of their role and, therefore, taking their responsibilities seriously.
As a rule, the subject matter is defined as “a way of creating higher and higher standards of living, whilst preserving the profitability of the corporation, for peoples both within and outside the corporation” (Hack, Kanyon, & Wood 2014, p. 51) and serves as the means of redefining the organizational behavior patterns among the staff in the target environment (Mallori & Rupp 2014).
In fact, the environment of the global economy often contributes to the evolution of the phenomenon of CSR and the adoption of new responsibilities by the staff due to the cultures fusion. For instance, the Japanese culture, which is famous for its vision of work ethics and the idea of excellent performance as the standard for the staff to comply with, affects the promotion of CSR among European and American colleagues to a considerable degree (Pohl 2015).
The connection between CSR and the key tenets of virtue ethics may be no as evident as it should at first; however, a closer look at the subject matter will reveal that the introduction of the CSR principles into the organization’s operations and interaction between the staff creates the foundation for the virtue ethics concepts to be planted in the target environment.
To be more exact, some of the CSR principles, such as the need to follow a suggested role model to strive for the benefit of all stakeholders involved, is related directly to the basis of virtue ethics e.g., the personal qualities such as reliability, openness, friendliness, etc.
Nevertheless, the significance of virtue ethics in the operations of present-day organizations in the global environment is undeniable. Though some companies may fail to comply with the principles of the aforementioned theoretical tenets, virtue ethics still remains the tool for evaluating companies and the choices that they make.
Indeed, when it comes to the identification of the principles underlying the choices made by the world’s most influential organizations, one will see that most companies tend to focus on promoting change in the staff’s behavior by calling to their responsibility and sense of dignity.
The fact that the principles of CSR are being adopted by an increasingly large amount of companies shows clearly that a range of organizations aim at shaping their staff’s organizational behavior and, therefore, assume the principles of virtue ethic.
One might argue that the foundations for building business ethics principles and implementing them in the workplace, which the incorporation of CSR into the organizational behavior framework is, are only provided as the tool for enhancing a company’s profitability. The strategies, which managers utilize to boost the organization’s performance, affect the staff on a very deep level, altering not only their behavior but also their idea of work.
Consequently, the promotion of the qualities, which align with the basic tenets of the virtue ethics theory, helps reinforce the significance of the latter and affects the choices, which they make. In other words, the implementation of virtue ethics shapes and alters staff’s behavior, which most modern organizational behavior strategies adopted by global companies are about (Zaheer 2014).
The same can be said about the concept of transformative leadership. Much like CSR, the specified phenomenon is supposed to alter not only the staff’s behavior but also their attitude towards the roles and responsibilities that they are assigned within the organization in question. Hence, a reciprocal relation between the virtue ethic and the management processes occurring in an organization can be traced.
The tools that are currently used as the basis for successful company management, such as the aforementioned transformative leadership, are clearly aimed at changing the way, in which staff members think and accept their roles and responsibilities. In other words, the moral fabric of the company members is altered, which allows planting the seeds of a responsible attitude towards tasks, ability to negotiate and compromise, the skills of learning efficiently, etc.
Therefore, virtue ethics clearly shines through the decisions, which most global companies make nowadays. However, instead of serving as a set of rigid rules for the staff members to follow, it creates a foundation for developing behavioral patterns and making choices.
Consequently, virtue ethics may coexist with other ethical theories in the realm of the global market, at the same time retaining its leading position and setting the background for the firm and its members to evolve in. Virtue ethics, therefore, serves as not the measure of the company’s actions validity, but as the foundation of the firm’s values and principles.
In contrast to the deontological principles, which define the process of communicating with customers, partners and other stakeholders, or the consequentialist concepts, which help improve the performance of the organization, the virtue ethics lies at the very core of a firm and seemingly has no direct effect on either communication or performance. However, virtue ethics affects the company on a much deeper level, shaping every single choice that an organization makes by defining the modes of its members’ behavior.
Outcomes (Benefits)
One must admit that the solutions provide above are not going to alter the environment of the global economy immediately; quite on the contrary, making companies adjust to the new concept of ethics is likely to take a significant amount of time. However, the solutions in question can be viewed as beneficial, since they allow for redesigning the way, in which ethics is perceived as a concept among the members of global organizations (Salleh & Sabdin 2012).
Among the basic effects, which the recognition of virtue ethics as the basis for organizations to build their ethical principles on is going to lead to, the introduction of the principles of CSR into the corporate environment deserves to be mentioned firs as the most significant change in the overall design of global companies. Although the phenomenon of CSR has recently become the crucial construct in the framework of most global companies, it still needs further enhancement, since the goals of a company may not coincide with those of its employees.
As result, in the environment, where they are pressured into assuming the virtue ethics-based values, the staff members may refuse to develop the corresponding CSR-related qualities and continue to make company-related decisions based on their interests rather than those of the target customers or any other stakeholders. In the environment, where the concepts of virtue ethics are promoted to them in a subtle and, therefore, natural manner, the members of global organizations are bound to follow the suggested behavioral patterns more eagerly.
In other words, the process of natural adoption of the CSR principles and the redesign of employees’ behavioral patterns in the global economy can be viewed as the essential effects of the virtue ethics enhancement (Stern 2012). Another significant consequence, which the above-mentioned principle of subtle virtue ethics promotion will trigger, a change in the leadership models that are currently adopted by company managers in global entrepreneurships is expected.
A closer look at the issue will reveal that the acceptance of virtue ethics means altering the ethical standards of the staff. Consequently, the very mode of thinking, as well as the moral fabric of the staff members, is most likely to change towards assuming a more responsible attitude towards the tasks that they receive. Although the goal in question is rather hard to attain, a redesign of the staff’s attitude towards their responsibilities can be carried out once a proper leadership approach is undertaken.
The principles of transformative leadership can be viewed as adequate concepts for a company leader to be guided by in the specified scenario. As the case study conducted by Mae shows, “traditional framework of business ethics tend to downplay the political role of corporations, emphasizing behavior that is voluntarily virtuous” (Mae 2012, p. 119).Thus, the promotion of virtue ethics as the basis for the ethical code in modern organizations is likely to trigger a significant shift towards the use of transformative leadership strategy among company managers.
The alteration in question can be viewed as positive, since it creates premises for improving the operations of firms to a considerable degree (Stonehouse 2011). Allowing establishing better relations between a company and the key stakeholders, address the needs of the target customers and introduce sustainability into the framework of an organization, transformative leadership will help global companies evolve.
Therefore, the enhancement of virtue ethics principles is a delicate manner will lead to the promotion of the transformative leadership approach among leaders of world corporations, as well as the managers thereof, as the case study by Takala (2012) shows by saying that “a moralistic transformation related to the moral decision making of managers who lost their position in the change” (Takala 2012, p 53) is essential.
Last but definitely not least, the issue of clarity needs to be addressed. Seeing that virtue ethics presupposes complete honesty and does not allow for any semblance of fraud in a company’s operations and the decisions made by its members, the clarity rates are going to increase significantly. The rise in clarity regarding financial operations will have a positive effect on global companies, as the complex environment exposes most organizations to the threat of a financial fraud being committed by their members.
Seeing that the promotion of the corresponding values presupposes a change in the moral standards of the staff, it will be reasonable to assume that the concept of a fraud will become unacceptable in the corporate environment, where the principles of virtue ethics are promoted in a subtle yet efficient manner.
Unlike the direct and obtrusive promotion of virtue ethics, the one that involves subtle reasoning is likely to alter the very mind frame of the staff and managers; as a result, the idea of committing a fraud will not even cross their minds. In contrast to a forced enhancement of virtue ethics, as well as the abandonment of virtue ethics as a concept, the aforementioned is likely to trigger a drop in corporate fraud rates to a considerable extent.
References
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