If we want to comprehend and control the ethical conduct within a business organization it is important that we understand how people behave in general. (Nelson and Trevino, 2014, p.19) Each person determines their own individual morals, values and ethics. In a business setting it is important that a set of ethical guidelines be established to regulate how the organization will conduct itself under various circumstances. Leadership is invaluable in enforcing these guidelines. According to, Ethics and Leadership, there are three things that will benefit a leader in influencing ethical behavior in an organization: 1) understanding ethics, 2) being a role model in ethical decisions and 3) making a plan of action for the staff, volunteers, and other participants promoting ethical conduct. (Hitt, 1990, p.4)
It is necessary to formulate guidelines for ethical behavior and document them in the form of policies and procedures. A policy manual can be rather daunting. Therefore, within each organization there needs to be a simple means of communicating the main policies to employees, staff, administrators and volunteers on an ongoing basis along with the formal manual. (Nelson and Trevino, 2014, p.219)
The most important thing about ethics in a non-profit is that the leader must determine the ethics from the beginning. Once established it is important that the board of directors is in agreement. The ethics or rules of operation must be documented as completely as possible so when situations arise everyone is using the same guidelines to solve the problems. It is not up to any one individual to follow their own moral judgements but it is necessary that all participants follow the written policies and procedures.
I have worked with an international children’s non-profit. The mission was to bring relief to the poor and distressed children in third world countries and to facilitate the increase of their educational opportunities. I will formulate my framework for a non-profit based on my experiences and what I learned.
My non-profit will have a document of policies and procedures. The document will state how to handle situations that arise predominantly within the following areas of the non-profits’ framework: 1) dealing with business logistics within the United States, 2) working with the board of directors, staff and volunteers, 3) communicating with donors, 4) interacting with associates and recipients abroad and 5) determining what provisions should be purchased and who they should be allocated to. I will use a newsletter and emails as a way to keep my staff, administrators and volunteers updated on any new policies, projects and outcomes. Information will also be distributed during meetings and the informal communication system known as the grapevine. (Nelson and Trevino, 2014, p.216) It is important that Accurate and Transparent Reporting be consistent so all participants know what is going on and can perform correctly. (Nelson and Trevino, 2014, p.48)
Business logistics in the United States can have a large amount of red tape. It is important to follow the law. (Nelson and Trevino, 2014, p.48) When establishing a non-profit in the United States there are several licensing procedures and decisions to be made. It is important to determine whether you will fundraise nationally or just within a few states. Each state requires its own licensing. If I receive funds from a state I am not licensed in then I will need to go through the process of getting licensed in that state. It is easier to do it all at once and it will avoid future problems. I will set up my organization with a national license. Funding is always an issue and determining where you will spend funds can be difficult. The way business is set up in the United States everyone wants a piece of the pie. Some businesses choose to walk in the gray areas of licensing. Life experiences have molded the morals of some people. Some live by the phrase, “It is easier to ask forgiveness than permission.” (Cooper, 1998, p.9) I am determined to be forthright in all business dealings with the state and federal government. I will do things right upfront even if the initial costs are higher. I will establish my non-profit as legitimately in all areas.
Working with volunteers can be challenging. They are donating their time so it is important that you treat them respectfully. Decisions need to be made on a daily basis. Most decisions are made by the board of directors but some can be made by participants. There is an ethical responsibility to keep people safe when you take them out of the country. When you work outside of the United States you need to make sure that one person makes the final decisions. It is nice to get everyone's opinion but working with a group sometimes requires a little dictatorship.
An example of this took place while I was working in Peru. The group decided to go to a grand festival with over 10,000 people expected in attendance. The festival took place on a large hillside. I generally do not tell people what to wear each day. However, on this day we had five adults and ten children on the delivery team. I asked everyone to wear their team shirt. Everyone came downstairs with their shirt on except for two adults.
When I saw them I asked if they would please go back upstairs and put on their team shirts. One left willingly and the other began to argue with me that she did not want to wear her shirt today. I very nicely but firmly explained to her, that all the children were wearing their team shirts. She would be in charge of watching two or three children during the festival and if she lost one of them, how was she going to describe the child to those at the festival. She did not speak Spanish. I continued to tell her that if she pointed to her shirt, mimicked a small person and pointed to the shirt, the people would understand they needed to look for a child with a shirt matching hers. She frowned, apologized, and went upstairs and put on her team shirt. Sometimes you need to be a dictator for the safety of all.
It is important to be honest with donors as they are the bread and butter of your organization. When you are asking people to contribute to a cause they are expecting funds to be used the way you say you will use them. It is my responsibility to protect the guidelines established and to maintain trust with all parties involved. (Nelson and Trevino, 2014, p.48)
Handling day to day operations requires making good decisions on a regular basis. There are often unforeseen expenses. Proper planning will help regulate normal business costs. A good budget will help outline where most money will go. Most non-profits declare what percentage of income they spend on overhead, stamps, paper, newsletters etc. My non-profit will pay for these line items as well as my salary. The salary amount will be documented along with annual raises. There will be guidelines to allocate funds needed for expenses while delivering supplies. This decision will be made by the board of directors.
Working with people in third world countries is far different that working with those in the United States. In my experience people living in poverty are often very generous but others expect you to just hand them everything because you are from the United States and therefore rich. "You owe them". When setting up a project to purchase school uniforms for children in a particular village, how are the children chosen? This is very difficult as they are all poor. It is crucial to set criteria to evaluate who will be eligible. My criteria will be that they are orphaned children. Whichever criteria is used, it is necessary to adhere to it or there will be mass havoc and you will have villagers waiting and begging at the door to have their children be recipients.
It is best to work with a trusted local and to have them determine which children are eligible based on the criteria you set.
I will never give funds to people directly. My non-profit provides supplies for relief of the poor and assistance in education. I will make sure the funds are used for those two purposes only. Education may include: funds and supplies for building a school structure, uniforms, and schools supplies. Most third world countries require children to have certain items to attend school. Those items often include: a school uniform, shoes, a backpack, pencils, paper, and other various typical school supplies. It is very important to determine whether teacher salaries are included which they will not be in my non-profit. In my experience I have found donors less enthusiastic about contributing for salaries.
Donors seem to prefer contributing funds for tangible items. Criteria for providing relief of the poor and distressed can consist of a wide variety of supplies and projects. Mine will include: food, toothbrushes, toothpaste, towels and other such items. Projects may include designing and building things like a sustainable pig farm or garden, or purchasing supplies and supervising the construction of school buildings.
In the past I worked with an honest and reliable man named Jose in Peru. I sent funds directly to an account with his name on it for him to order uniforms for the children at the school. He took all their measurements, shoe sizes, etc. and ordered the uniforms and supplies so they would be ready upon the delivery teams’ arrival. Unknown to me, there were two teachers at the school whose names were on the account. Due to a lack of funds at the school teachers and Jose had not been paid in three months. After the funds were transferred, Jose ordered the uniforms and supplies. He went to the bank to take out funds for the deposit only to find the funds had disappeared. The two teachers seeing funds available in the account decided amongst themselves to pay the teachers directly.
Jose was beside himself and frantically begged friends and relatives for money for the deposit so the uniforms could be paid for and would be ready when the team arrived. Jose had no money himself. Upon arrival I was faced with the dilemma. Teachers are an integral part of education but the non-profit did not cover salaries. I was forced to have a conference with the teachers and confront them with their thievery. At first they were defensive, but after explaining how people in the states donated funds for specific items to help the children one of the two felt remorse. Eventually I had to threaten to get the police involved to encourage the other teacher to return the funds. Funds were returned prior to my departure from Peru. I felt sorry for the teachers as they were working to help educate the children but the funds I brought were not for salaries and therefore must be returned and spent on the supplies intended for the children.
How money is spent and how supplies are delivered can create ethical issues. When delivering goods to a third world country it is important to have a person present. It is extremely important to keep good documentation of what was purchased, for who and when. People often have different ideas of what is the most important thing to spend money on. Here is an example of a situation I watched another non-profit experience. They were working with an orphanage and planned to donate $10,000 for food for the next year. The woman in charge of the orphanage was kind and loving and was looking out for the best interests of the children she cared for. The other non-profit left the money with her trusting that she would spend all $10,000 on food as discussed.
The leaders returned home and two months later discovered that she has taken the money and purchased a small piece of land next to the current orphanage. They were outraged. The money was supposed to be for food. They skyped the woman and asked what happened. She became defensive and explained that she was getting 20 new children in the home over the next six months. The facility that the orphans were currently in was too small for 20 more children so she purchased the land to begin building a side unit for the additional children.
Her intensions were honorable and she cared about the children, but the funds given to her were designated for food. The donors believed they gave $10,000 for food. So what happens now? I have decided to prevent this type of situation by never giving funds directly to an associate abroad unless they are committed to exactly the same purchases as I am. The government of the United States does not look kindly on undesignated funds given abroad. Anything suspicious gets audited.
What constitutes a good use of funds? What may be common knowledge for us in the states is not necessarily information poverty stricken people in other countries have access to. I purchased two mother pigs and ten piglets for an orphanage. This home had been gifted with animals before and I was told that the animals died within a short period of time. It was decided that some training on pig care was necessary. This livestock was going to be self-sustaining so the recipients needed training on how to care for the pigs on a daily basis.
The idea was to keep the pigs healthy and to teach them how to properly manage the reproduction of the livestock so they would have them for years to come. They learned that they could not slaughter them all in the first month. They needed to let some grow up and breed them for new piglets for the future. I left the project confident that the recipients would be able to maintain a sustainable pig farm.
In order to evaluate and improve my ethical leadership I will give trip participants a written survey to fill out. Surveys are a great way to evaluate results as they can target a variety of issues. (Nelson and Trevino, 2014, p.240) These surveys will be anonymous and given out at the end of each trip. We as a team will discuss the experience in its entirety. There will also be a survey attached to the newsletter that goes to donors, administrators and staff. Issues that transpire on each trip will be discussed and feedback will be asked for. Additional policies and procedures will be added to the policy document if necessary.
So many things transpire within the daily experiences of an international company. It is important to have documented policies and procedures, a framework of how ethical situations will be handled and excellent avenues of communication with all those involved. “Ethics turn opinions into judgements, which lead to analysis and decision-making. Two qualities required to fix any problem.” (Waggoner, 2010, p.15) By establishing a strong structure of business ethics with good leadership multiple problems can be avoided which will assist any business in being successful.
References
Cooper, T. (1998). The Responsible Administrator. San Francisco, California: Jossey-Bac Inc.
Hitt, W. (1990). Ethics and Leadership: Putting Theory into Practice. Columbus, Ohio:
Battelle.
Nelson, K. & Trevino, L. (2014). Managing Business Ethics: Straight Talk About how to do it Right (6th Edition). Danvers, Massachussets: John Wiley & Sons Inc.
Rehman, R. (2011). Role of Emotional Intelligence on the Relationship among Leadership Styles, Decision Making Styles and Organizational Performance: A Review. Interdisciplinary Journal of Contemporary Research in Business, 3(1), 409-416.
Waggoner, J. (2010). Ethics and Leadership: How Personal Ethics Produce Effective Leaders CMC Senior Theses. Paper 26. Retrieved from http://scholarship.claremont.edu/cmc_theses/26
