Mgmt 512: Ethical/legal Aspects of Management - Light and Shadow

Light and Shadows

By

James Dickinson

MGMT 512: Ethical/Legal Aspects of Management

Lisa Simmons

May 2, 2016

What differences and similarities exist between the guidelines offered by the Caux Round Table and White’s Biblical principles?

        The similarities between the two sets of guidelines are that they both follow ethical and moral standards. The Caux Round Table is based on three foundations; “responsible stewardship”, “living and working for mutual advantage”, and “respect and protection of human dignity” (Caux Round Table, 2010). Jerry White based his guidelines on the Bible with the primary verses being from the New Testament (White, J., 1978). They both center on the values of honesty, trust, respect, and responsibility for your actions. Along with this they both discuss the need for avoiding unethical behaviors such as illicit activities like bribery or corruption (Caux Round Table, 2010). Caux also covers the need for respecting the environment as well as the need for respect for other cultures and laws when taking your business to the global level (Caux Round Table, 2010). While White does not elaborate on these issues, the underlining point is still there in his principles of responsibility and servant hood (White, J., 1978). Essentially, each is saying that it is the moral obligation of the business world to act in a fair, responsible, and trustworthy way in all business dealings.

         The differences between the two sets of guidelines are the way that the writers chose to present their concepts and the reasoning for them. White uses Biblical verses to present his ideas on business ethics. This is because he wishes to convey to the reader the view that God has already given us the principles that we need to follow for everything in life including business. He states that it “is God we serve and it is God to whom we are accountable” (White, J., 1978). The reasoning for his principles is to show the reader that business and God can and do go together. So many people try to separate God out of everyday life and say that to succeed in business you cannot adhere to moral standards. White is trying to show that this is not true and that if you want to succeed then you need God. Caux uses foundational concepts to present their principles (Caux Round Table, 2010). This is because they feel that “good ethics” are “good risk management” (Caux Round Table, 2010). In other words, good ethical practices make it easier to succeed at business and eliminate some of the risk involved. Their reasoning for this is based in recent financial crises that have happened in this decade. In 2008 and 2009, several companies lost substantial amounts of revenue due to faulty or unethical business practices. This lead to a global recession and housing crisis that caused millions of people to loose financially. Caux wishes to show the business world that “if capitalism is to be respected, and so sustain itself for global prosperity, it must be both responsible and moral” (Caux Round Table, 2010). This means, that business cannot adhere to a policy of profit first ethics second. In order to have profits, ethics and moral standards must come first.

What principles or guidelines are there, if any, in Whites five principles that go beyond the seven principles of the Caux Round Table and what is the impact of these principles on the organization, the employees, the customers, and the other stakeholders?

        The principles are; “just weight”, “being a servant”, and “reasonable profits” (White, J., 1978). The first principle means that the consumer is entitled to a “fair exchange” or to get what they have paid for. (White, J., 1978). This means that the business is obligated to provide the consumer with the product that they wish to purchase. They cannot give the consumer an inferior product or cheat the consumer on the price of an item.

“Over the past two decades or so, there has been tremendous growth in the production and sale of fair trade products: those that are manufactured and distributed ‘under equitable trading agreements, involving cooperative rather than competitive trading principles, insuring a fair price and fair working conditions for the producers and suppliers’’ (Salvador, R.O., Al. Merchant, and E.A. Alexander, 2014, p. 353).

 The second principle means that the business will be known by how well they serve the needs of their consumers (White, J., 1978). In other words, the employees have to have an attitude of service and the executives need to be focused on how to better serve their consumers. They cannot have a superior attitude or be impatient with their consumers because this will put their business in a bad light. This, in turn, will affect the way consumers view the business as well as their view of God. “In this vocational context compassion is perceived as integral to understanding and upholding the values of caring and commitment to others which should be found in the public service as well as being the foundation for doing good” (Thomas, M. and C. Rowland, 2014, p. 100). The last principle means that the business needs to charge a price that accounts for the costs of producing the product with a slight increase for profit (White, J., 1978). With employees it means that business needs to give them a fair wage for the work they perform (White, J., 1978). A business cannot be focused on profits to the exclusion of all else. They need to remember that profits without ethical responsibility are self-serving and morally wrong. “It is a real dilemma for the commercial and profit-driven sector where the lack of societal responsibility and caring for others has received such severe criticism and it is no surprise to find the response to such criticism in the rising calls for demonstration of compassion” (Thomas, M. and C. Rowland, 2014, p. 109).

        These principles go beyond Caux by being more focused on the Christian values of business. In other words, Caux is focused on business being fair and responsible but they leave out the aspect of God’s morality. Caux concentrates more on the environment, community, legal, and global aspects of business (Caux Round Table, 2010). This means that they touch upon the spirit of morality but do not attempt to go too far into it. They leave out God’s principles and focus on secular standards.

        These principles affect the organization by making it adhere to a higher standard than the secular world does. This means that the organization needs to focus more on its responsibility to be an upstanding company before God.  This is done through quality production, honest business dealings, fairness to employees and consumers, and by upholding a view of integrity in all that they do. It also means that the organization admits its mistakes and takes responsibility for them no matter the cost or legal consequences.