POSITION PAPER

Position paper

Position paper

Introduction

In this paper, we demonstrate why organizations should include ethics in their strategic management process and present a method to enable them to do this. Strategic management demands effective and efficient use of corporate resources in both the long and short-term. Ethics are the shelter under which moral, social, and legal issues reside; thus, using components of ethical analysis as a foundation for these decisions may result in the best use of corporate resources. We define ethics as the science of using moral criteria to guide human conduct and morals as accepted values and standards of human behavior (Honderich, 1995).

In the following sections, a model of decision making which considers the analysis of ethical components in the management process is developed. The model has as its core an “interest assessment” that involves analyses of moral, social, and legal obligations of an organization. Obviously, any model of corporate strategy will have a number of conceptual and philosophical assumptions underlying it, and we have identified at least seven. We present the model, discuss the assumptions underlying the model, and then highlight the model and underlying assumptions with heuristic real-life examples of costly organizational decisions.

Background

It is the identification of interests - long term and short term - that needs to fuel strategic decision making. The process which is presented provides a guide to effective interest identification. Once relevant interests have been identified, they need to be evaluated as to how they can be addressed by the various functions of the organization, and then implemented within organizational processes in a way that will ensure that these interests will remain at the core of all decision-making. At the heart of this process is the underlying belief that organizations are systems made up of interdependent parts. Decisions within each functional level can influence the overall performance of the organization. Thus, throughout the functional areas of the organization, decisions must be guided by the same interest evaluation process. The paper outlines the strategic management process described below. Components of the process include “interest identification”, “interest analysis”, and “interest activation”, each of which is discussed in turn.

Interest identification

The first step in integrating ethics with strategy is for managers to identify the interest or interests that they serve. This is not an identification of to whom you are beholden but rather to what are you beholden. Interest identification involves the identification of what, not whose, interests an organization intends to serve. If you serve the interests that the organization was devised to serve you will by default serve the interest holders. (Trevino, L., Weaver, G. 1994),

What interests do organizations serve? Organizations serve a mixture of private and public interests. Private interests are identifiable through the type of business that an organization is in. Public interests represent moral, social and legal concerns that are connected through a continuous and evolving process which is intimately tied to organizational self-interest. Thus, interests that an organization serves derive from an organization's mission and from legitimate social, ethical, and legal claims ...