MANAGEMENT IN ACTION- SOCIAL, ECONOMIC AND ETHICAL ISSUES

ASSIGNMENT ON REVIEW OF LITERATURE ON ETHICS IN MANAGEMENT CONSULTING

SUBMITTED TO- SUBMITTED BY-DR. R. SUJATHA AAKANKSHA JAIN MBA (HR) A-27 A0102313117LITERATURE REVIEW

Ethics is an expression of thought rather than instinct in doing (moral rationality), (right) pursuing of our own interests to a self-controlled extent; it is responsibility in the relationships that includes, at least partially, the interests of those whose interests are at stake (solidarity), loyalty of information and action, respect of super partes interests (action correctness). It therefore expresses moral credibility for those who profess it and it generates antecedents of trust in third parties antecedents because trust is more technically related to the belief in operative capabilities and of actual behaviours (will is not sufficient, power is needed).The presence of recognized ethics tends to reduce the need for informative or legal contractualprecautions in the formalization of relationships, for both of the parts involved in a negotiation. Showing the existence of behavioural ethics can become a way to compete and as such opens a question of strategic approach of the (consulting or not) firm to ethics. From the outside, in fact, substantial ethics is created only through the accumulation of ethically significant facts overtime, but without any guarantee of continuity for the future ethical behaviour. It is therefore opportune to adopt specific action to support the creation of an ethics image and to favour a consistency of behaviour that can be externally observed and identified.As a consequence, it will also be possible to distinguish between ethics practiced for the desire of ethics and ethics created for image. Of course, the last can also include cases of more apparent than virtual4 false or partial5 behaviours, sometimes willingly compensative of activities with uncertain ethics (patronage with activities with a not ethical core business); it can even induce to a really ethical behaviour. The same way, the adoption of an ethical capacity can just be the result of the need of clients that have already developed an ethical dimension (pull effect).

Nandita Mishra, Gulnar Sharma (2010), Managing ethics in the work place is all about how the values, ethics and moral principles are essential to sound decision making. In looking for an answer, it was found that while organizations do indeed have values, ethics and moral principles, these are not communicated in a code of ethics and may in fact be quite different what the code of ethics might lead to. While it would be ingenuous to think that ethical behavior within an organization can be changed simply by posting a list of high sounding principles, it is equally nave to imagine that the ethics of an organization just happens and there is nothing to be done about it. Explicit elements of a corporate ethics program include the things which an organization says it believes in, and the efforts made to communicate those principles directly. One observation is that most of the text in these codes is concerned with the duty and the responsibility of the employee to the company.Put more strongly, it seems that the most common purpose of a corporate code is to protect, the organization from the unethical behavior of the employees. The terms code of ethics, code of conduct and code of practice are often used interchangeably. It is useful, however, to distinguish among these terms in order to establish a basic typology. Each basic code has a different intent and purpose. Code of ethics is statements of values and principles which define the purpose of the company. These codes seek to clarify the ethics of the corporation and to define its responsibilities to different groups of stakeholders as well as defining the responsibilities of its employees. These codes are expressed in terms of credos or guiding principles. Such a code says: This is who we are and this is what we stand for, with the word we including the company and all its employees, whose behavior and actions are expected to conform to the ethics and principles stated in the code. Codes of practice are interpretations and illustrations of corporate values and principles, and they are addressed to all the employees as individual decision maker. In effect, such a code seeks to shape the expression of the corporations stated values through the practices of its employees. Code of conduct are statement of rules, which states, this is how one Organization expects one to behave.It is interesting to note at this point that recent research has found no significant correlation between corporations having a code of ethics and a reduction in ethical violations. One need to find is there a problem with implementation, or a problem of training or the code is badly written? It may well be that the failure of the explicit components to produce results is the result of their having to fight an uphill battle against the implicit components. If the goal is to produce behavior which is in line with the explicit values, principles and ethics of the organization, then congruency between the explicit and implicit components of the ethics program is essential. Many changes have occurred in the workplace over the years as employees and employers have developed new relationships that reflect changing interests and concerns. Changes have taken place relative to the place of work in peoples lives and in the way in which they understand this activity. One of these changes involves the rise of ethical leadership. Related to these changes is the way in which the contract between employers and employees is changing in the workplace.One of the most fundamental issues in the current scenario of globalization in India revolves around leadership. After a careful study of existing empirical studies related to leadership and decades of research on leadership, we are left with bewildering mass of findings related to leadership. Without a powerful modern philosophical tradition, empirical cumulating, guiding principles and practical experiences, we lack the very foundations to understand leadership. A social responsibility initiative that directly affects peoples wellbeing is to create a comfortable, pleasant, and intellectually stimulating work environment. People invest about one third of their time in work, a pleasant work environment increases the chances that their life will be enriched.Also, career oriented people derive much of their meaning and satisfaction from their career. The modern leader must be multicultural because corporate success, profit and growth depend increasingly on the management of a diverse work force. A multicultural leader is a leader with the skills and attitudes to relate effectively to and motivate people across race, gender, age, social attitudes and lifestyles. Ethical leadership means how to manage in a cultural diverse workplace by understanding key dimensions of differences in cultural values, managing the influence of cultural values on leadership style and applying a motivational theory across cultural groups. Global leadership skills help improve a companys reputation and contribute to a sustainable competitive advantage. Behavioral complexity helps a leader attain high organizational performance. Leadership has increasingly become a perception game, increasingly influenced by how recent and newsy the images accompanying it are. Consider the case of Enron, the most spectacular collapse in 50 years of business history. Ken Lay, its chairman, was once lauded as a pioneer and visionary who transformed a sleepy gas pipeline company into an energy behemoth. Not anymore. There are companies in all countries, India no exception, which are perceived much like Enron once was successful but crooked. There is admiration for their dynamism and leadership, but there is also a deep and unproven suspicion about their methods. Leadership is like an iceberg. The media, analysts and the general public see only its tip, that which rises above the water. If this part looks shapely and interesting, they put it on a pedestal. Great leaders, on the other hand, go to work at the base of the iceberg a cold, dark and uncomfortable place chipping away at and blasting the foundation in an attempt to renew or modify the structural framework of the organization. To outside observers it might well appear that nothing much is happening, but great leaders do what they have to without regard to appearances, because they genuinely believe that theirs is but one lap in a relay race. Outstanding leaders are anointed long after their work is done, not three months after they become CEOs.The Best Companies to Work for in India are Indian IT companies, according to a joint study conducted by Mercer Human Resource Consulting, the world's largest HR consulting firm Business Today, India's number one business magazine and Taylor Nelson Sofres (TNS), a leading international market research firm. In the BTMercerstudy 2006, Infosys emerges as the Best Company to work for in India, Mindtree Technologies is ranked second and Satyam third. In the sixth annual Business Today Best Companies to Work for in India survey and the third year that the BTMercerTNSteam has collaborated to identify the best companies to work for in India. The survey recorded a phenomenal 75% increase in participation from the previous year and a total of 131 organizations registered for the survey.In the survey, meaningful work and rewards, greater control over careers, increased focus on learning and development and individualized attention emerged as the key expectations of employees from organizations. The winners of the survey are companies who have made substantial investment in their people, infrastructure, facilities, technology and evolved HR systems. Stock options, flexitimings, telecommuting, redressal and grievance committees, customized training and development opportunities, career management control and empowerment seem to be standard affair at these organizations. Most companies in the top ten have leveraged technology and have built truly integrated HR systems and processes. This in turn, has benefited and empowered employees who get access to information related to HR policies, performance management review, training needs and career planning tools, online. The winning organizations have built a strong culture which reflects the values that the company wishes to inculcate in its employees. Communicating these values has gone beyond posters and employee manuals and senior management including the CEO of a winning organization personally facilitates the integrity session as part of the induction program for new employees.Another interesting finding has been the inclusion of medium size organizations in the top ten rankings, reiterating the fact that investment in strong HR policies and employee development are not restricted to the "employee bloomers" organizationswith more than 5000 employees, alone. "We at Business Today are proud to have pioneered the Best Companies to Work for study in India. It not just captures the best practices in people management, but also drives home how companies are addressing their single biggest challenge today, which is recruiting and retaining talented people," Sanjoy Narayan, Editor, Business Today said. Commenting on the survey results, Padmaja Alaganandan, Principal Consultant, Mercer Human Resource Consulting said, "One noteworthy finding is that the differential between the top ten employers is clearlynarrowing down and others are catching up fast. It is heartening to see that people management practices and HR systems have evolved in the last few years and have reached a much higher degree of sophistication, integration and innovation. Another interesting finding is that organizations are building an employer brand that goes beyond the four walls of the organization and encompasses the employees' families, alumni and the community at large."Padmaja Alaganandan, Principal Consultant, Gyananjan Kaur, Consultant and Saaket Arora, Consultant, from Mercer India's National Capital Region office and part of the Human Capital business, led the study team at Mercer. The research program of Micheal Deck examined more than 70 Canadian companies over the last 10 years. The data studied, made it clear that the managers ofsuccessful companies no longer regard shareholders as the sole and necessarily most important stake holders in the company. The concept of shareholders endowed, with a right to the maximization of profits is being replaced by the concept of stakeholders, of which shareholders comprise only one group. The shareholder is no longer the only stake holder.

Carlo Vallini (2007), ethics is a relevant value in business and management consulting. The presence of recognized ethics tends to reduce the need for informative or legal-contractual precautions in the formalization of relationships, for both of the parts involved in a negotiation.Management Consulting on ethics will develop more and more. Law will consider more and more ethics in business and management consulting. The ethics of corporations influences their workers and behaviour with the customers. It is an evident case of maximum integration between business and individual ethics.

Ethics and Business Legitimac:Social dynamism and complexity are growing. The community needs rules (legality), which follow the evolution. Externalized and recognized rules (praxis, consuetude, regulations, laws) deal with problems only late. They often have an opposite effect, as they are obsolete or not sufficiently penetrating because the phenomenon to be regulated has not been fully understood. Globalization connects different social systems and there arent rules for coordination and integration. In all of these cases, legality is not sufficient or suitable to legitimate behaviour. It is, therefore, possible to overcome the ideological contraposition between two opposite views of the market, which are not devoid of internal contradictions: liberalism (the market is self-regulated) and the regulation (the market needs to be regulated).

Ulrich Hagenmeyer(2007): When seeking to craft an integrative management consulting ethics as a guiding principle, it is imperative first to focus on the fundamental justifiability of a management consultants specific consulting understanding. The characteristic features of a genuine management consulting situation that we have just described highlight the intrinsic instability of such situations. In an ideal consulting situation, the steady equilibrium arrived at by sharing out responsibility in equal parts keeps the consultantclient relationship on an even keel. The relationship is, however, constantly in danger of slipping either into a bogus consulting situation on the one hand (where the client assumes too much responsibility and is not open to arguments of the consultant due to his preconceived position) or of mutating into a management substitute on the other (where the client shoulders too little responsibility and is not willing to examine critically the arguments of the consultant).

In an ideal consulting situation, responsibilityfor the consulting process is equally shared

Ultimately, the autonomous client alone is responsible for deciding to implement recommendations. Both parties nevertheless share equal responsibility for designing the consulting process i.e. in relation to the content and relevance of the data and informationprovided. The clear distribution and transparency of responsibility as understood above is the core of ethically oriented consulting because it avoids the main ethical danger of every consulting situation: the diffusion of responsibility that ends up as a responsibility switchyard (Resch 2005) where nobody seems to be accountable for the results and effects of consulting projects. Therefore, the consultant accepts for his part full responsibility for the way in which he collaborates with the client. This also includes dealing responsibly with the degree to which an actual consulting situation deviates from the theoretical ideal of collaboration and responsibility in equal parts. It would be far from reality to presume that, in practice, consulting can and does only ever take place under ideal conditions. At the same time, however, it would be distant from any human value for consultants to pursue an opportunistic strategy, alternately playing the bogus consultant or the substitute manager. In seeking to define an ethically justifiable form of management consulting, it is thus particularly important to have a justifiable consulting situation, i.e. a justifiable consultantclient relationship. It must therefore be clarified in advance whether, at the very least, a consulting-like situation does in fact exist! Building on the integrative economic ethics, it is again essential to commit to justifiable business principles when realizing specific consulting projects. Consulting firms face a fundamental moral dilemma: they, like their clients, compete directly with other players in their chosen market. As such, they are permanently in danger of providing advice that runs counter to their clients best interests of seeking to optimize their own sales and profits rather than (primarily) to solve the customers problem. The following ethical business principles can help them resist this temptation (cf. ACME 1991, BDU n.d.): Generally avoid conflicts of interest that could influence the consulting service provided. Do not link inappropriate economic interests on the part of the consultant to the consulting services provided. Do not foster unrealistic expectations. Only take on consulting jobs where consultants have the right expertise and experience and sufficient capacity. Clearly define the objectives, scope, procedure and fees for each project. Treat clients information with absolute professional confidentiality (especially in respect of a clients competitors). Do not poach clients staff.The ethical nature of these business principles alone says nothing about the consequences ofconsulting activity, however. In order to be in line strictly with the integrative business ethics,justifiable success must also translate into a justifiable business mission. In other words, ethically favourable principles do not justify ethically questionable ends. As management consulting can have an exceptionally powerful commercial and economic impact on the common good, consultants must be exceptionally responsible in their dealings with the general public.The initial point of departure for justifiable consulting that serves the common good is the consulting philosophy adopted by firms in this industry. Every consulting practice pursues some philosophy or other, even if it remains unwritten. This philosophy determines how consultants observe client companies, what they see, what conclusions they draw from their observations and the form in which they actively intervene. In justifiable cases, a focus on the common good is rooted in the consultants worldview its fundamental assumptions, its values and its ideal of a well-run company. It is precisely this frame of reference that allows them to map out over complex situations in a way that enables their clients to take confident action. From an ethical point of view, it is therefore singularly important for the consultant to adhere to a transparent philosophy.The principal ethical challenge to consultants thus lies in the consequences of their consulting activity, which in turn depend essentially on their underlying philosophy. The very interests pursued by consultants as they seek to formulate problem solving strategies are of fundamental importance. Their project involvement gives them a measure of responsibility in determining which avenues of thought and discussion are kept open and which are closed off. Their ethical commitment expresses itself in a willingness to examine whether the claims being asserted in a given consulting situation are justifiable in light of the common good. This is the case generally speaking if those claims support the security of the basic needs of peoples lives or the expansion of their cultural richness (cf. Ulrich 2007). According to the principles of discourse ethics, this means actively discussing and reflecting on the real world claims of the people and organizations who will be affected by the consulting project in an understanding-oriented attitude. Room for such discussion and reflection must be opened or should at least not be closed off prematurely. In this way, consultants of integrity can clearly show that ethically favorable consulting cannot be reduced to resolving specific problems with a bias towards standard business management solutions.

REFERENCES ACME. (1991). Code of Ethics. New York: the Association of Management Consulting Firms,ACME. BDU. n.d. Berufsgrundsatze fur Unternehmensberater, document number 0894.001. Bonn/Berlin: BDU (Bundesverband Deutscher Unternehmensberater e.V. German Association of Management Consultants). Business Ethics (2007): A European Review, Volume 16, Number 2. Eigen, P. (2006). Management and Labour Studies (Corporate ethics and the bottom line: Why fighting corruption matters for business), 31(1), pp 717. Nandita Mishra, Gulnar Sharma(2010). Ethical Organization and Employees. Asian journal of management research. Ulrich, P. (2007). Integrative Economic Ethics: Foundations of a Civilized Market Economy. Cambridge: Cambridge University Press. Vallini Carlo (2007), Ethics in Management Consulting, Symphonya. Emerging Issues in Management (www.unimib.it/symphonya), n. 1, pp. 26-39.