Chapter 5 'Think Theory' answers

Managing Business Ethics: Tools and Techniques of Business Ethics Management

 

THINK THEORY 1

Think about the difference between aspirational and rule-based guidelines. Which do you feel to be most helpful in guiding employee practice in an increasingly digital world? Can you identify further examples of each of these type of codes being used to regulate social media practice? Evaluate these in terms of feasibility of implementation, especially across national contexts.

As aspirational guidelines are likely to be more general they will be more open to interpretation by individuals, thus in certain instances may be less effective. However, they are likely to provide more guidance in grey areas. Rule-based guidelines, however, provide clear principles to follow, but may not cover every possible situation or incident which may occur.

Think about jobs you may have had, were there any restrictions on social media usage? Were you not allowed to use social media at work? Were you allowed to post about the company, either pictures or information? If not, ask friends and family if they have been subject to social media regulations in the workplace. What sort of restrictions were placed on their social media usage? How did this make them feel? Did they adhere to the guidelines?

The feasibility of implementation relating to social media usage in the workplace, particularly concerns how companies can police all employee’s usage of social media and the information they share on social media. Likewise, different country or regional norms may impact social media usage. For example, in regions where social media sites are restricted or entirely banned, or employment relations law is particularly strong or weak, this may have knock on effects on, for instance, employee privacy rights and ease of dismissal.

THINK THEORY 2

Should social accounting be advocated on a consequentialist or non-consequentialist argument? How would the two arguments differ?

A consequentialist argument could say that the benefits of engaging in social accounting outweigh the costs and it is therefore in the company’s best interests to undertake such an exercise. Some benefits include identifying future risks, particularly relating to corporate reputation; increased investment through inclusion on SRI (socially responsible investment) lists and labels; and decreased pressure from media and civil society groups. A non-consequentialist approach, in contrast, would argue that the firm should engage in social accounting, because it is the right thing to do. It is a way of providing greater accountability and transparency, engaging with stakeholders and showing them how the company’s actions are affecting them.

THINK THEORY 3

Think about the GRI in terms of Zadek et al.’s (1997) eight principles of quality in social accounting. To what extent would you say it conforms to and contributes to good practice?

Based on Zadek et al.’s (1997) principles:

  • Inclusivity. GRI is a multi-stakeholder, multi-sector initiative that encourages extensive inclusion both for those organizations using it as a reporting standard, and for those it invites to provide feedback on its own progress.
  • Comparability. This is a key goal for the GRI – to become the ‘generally accepted standard’ for reporting worldwide, and has made significant strides towards this goal.
  • Completeness. Another one of the key goals of the GRI was to be inclusive and create a list of indicators that could provide measures for social, environmental and economic considerations. Creating the measures for these areas has had varying degrees of success due to certain issues being easier to quantify than others. Again within this principle, the GRI would conform quite well.
  • Evolution. The GRI model itself has been evolutionary in its development: the third revision of the guidelines was released in 2006, with subsequent sector supplements, national annexes, training materials and even specialist guidance. More importantly, the guidelines encourage users to embark on a continual learning cycle with regard to non-financial issues.
  • Management policies and systems. GRI is mainly concerned with reporting, but has produced tables on its website to indicate its relationship to different management systems such as ISO standards (14000 and 26000 series). It is also important to note that the GRI is intended as a tool for companies who use management systems to report on these systems and includes specific sections of the guideline on these issues.
  • Disclosure. Due to the fact that the GRI is voluntary, disclosure is only possible from those organizations who choose to use the standards. However, for those organizations who do follow the guidelines, there are clear, specific lists of information used to ensure transparent disclosure of appropriate material.
  • External verification. In the G3 version of the guidelines, external verification/ assurance are explicitly recommended (though not required). 
  • Continuous improvement. GRI is in support of continuous improvement.

Therefore, the GRI, if followed and used properly, goes far to conform with the eight principles of quality in social accounting and contributes to best practice. If used selectively, however, it may in fact work against the issue of transparency as it would make it more difficult to see what issues companies were not reporting.

THINK THEORY 4

Think about the growth in business ethics management that we identified earlier in the chapter due to the impact of Sarbanes–Oxley legislation and other governance reforms in the early/mid 2000s. Are these developments likely to initiate business ethics management that is characterised by a compliance, values, external, or protection orientation?

It is possible that governance reforms can precipitate re-evaluation by senior management of company values or increased efforts to respond to the concerns of key external stakeholders. However, reactive business ethics management practices, which are set up as a direct response to changes in governance rules, are often characterised principally by a compliance orientation. That is, the main emphasis would be on preventing, detecting and punishing violations of these new rules. It also seems likely that the management systems set up will have a protection orientation in practice, given that regulators typically impose lower fines on companies that fail to comply with regulation.