Application report
Summary of the article
According to the author of the article, being honest is far much more than organization policy. He uses the quote of the Dublin archbishop, Richard Whitely, who once said that although honest is the best policy, those people who are driven by the principle of maxim cannot be a honest man (Kay, 2013). He defends the fall of co-operative bank that states it commitment to ethical standards in advertisement than its competitors do. Kay posits that the bank did not fall because of its commitment to ethical standards; rather it fell because of the reasons that make other businesses fall. These reasons include misguided acquisitions and bad lending practices especially on the commercial properties. However, it is evident that the inclusion of the ethical commitment in the bank’s mission statement had insignificant impact on the way it conduct its affairs. Although the bank received support from organizations, individuals, and local authorities that are socially concerned due to its ethical commitment, it is wrong to assume that good businesses are always profitable. The author continues to argue that ethics are seen when one knows what to do when faced with a dilemma of profitable business and good behaviors. If one is driven by the policy of honest, then he or she will not know how to follow the policy when the deal is too profitable.
Therefore, he concludes by saying that honest or ethics is an organizational characteristic or personal behavior, and not a strategy for business. Those people, who are honest, do so not because of the organization strategy, but rather out of inner conviction. Organizations should seek for individuals who are able to practice honest from inside conviction rather than those who practice it as a company’s policy.
The above article relate with the topic of ethical behavior in management since it discusses about the concept of honest which is important in any healthy organization. The author seems to analyze whether the principle of honest should be a policy of the company or an individual characteristic. In making ethical decisions, the management ought to ensure that they do not engage in any illegal business or practice and remain committed to its legal responsibilities. Ethical decisions also ought to be fair putting into consideration how they will affect those who are involved. In the article, the author tries to argue that there is no any organization that can collapse because of practicing ethical behaviors such as being honest. Instead, practicing ethics will help in promoting the reputation of the organization in the public eyes. For example, the co-operative bank received massive support from the organizations and individuals who are socially concerned just because of its commitment to ethical behaviors. The management of the bank refused to participate in “immoral” businesses such as lending money to tobacco and arm dealers since it could compromise its commitment to the practice of ethical behaviors. In addition, the author of the article goes into details to explain why honest and other ethical behaviors should come from an individual inner commitment rather than out of the company’s practice. Those organizations that are committed to ethical practices uphold honest in all their dealing with customers, employees, suppliers, creditors, shareholders and other stakeholders (DeGeorge, 2010).
Lessons about ethics and practicing management
There are several management lessons that one can learn from the above article. First, honest as an ethical policy, should be practiced out of inner conviction by all members of the organization rather just because the company’s policy dictate so. This will enable all the employees of the company not compromise their values even the deal looks so profitable (Armstrong, 2002). This will enable the organization to reap the benefits of following ethical behavior in its practices such as good reputation and public support from local authorities. Secondly, organizations need to practice ethical behaviors more that stating them in their mission and vision statements. This is because stating them without practicing them would benefits the other parties such as customers, suppliers, shareholders, and creditors. For example, if the company is committed to ethical behaviors. For example, if the company is committed to ethical behaviors, it should not engage in any illegal or immoral business such as trading in arms, selling prohibited drugs, environmental pollution among others. Thirdly, it is important for any business to uphold all the management practices without neglecting others. Co-operative bank that is mention in the above article upheld the principle of honest but neglected other principles such as responsible lending and informed acquisition which led to its downfall. All the business practices are important and should be upheld simultaneously. If a company upholds the principle of good governance, it should equally uphold the principle of honest and corporate social responsibility. This will ensure the whole business is healthy, and it is not only making profit but also fulfilling its legal and social responsibility. It also ensure that company grow wholesomely and not in some areas only.
References
Armstrong, M.B.(2002). Ethical issues in accounting. Oxford: Blackwell.
DeGeorge, R.(2010). Business ethics, seventh edition. New York: prentice Hall.
Kay, J.(2013). Being ethical in business is not simple as ‘doing the right thing’. Financial times, Nov 5, 2013, p.1.
