Business Ethical Decisions in HRM

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In the course of conducting staffing functions, the management of any business often has many decisions to make. The management staffing function entails advertising jobs, interviewing, and selecting people for the jobs, managers sometimes have to make decisions that leave them in a dilemma regarding what is best for the various stakeholders at hand. This paper will review business ethical decisions involved in human resource management. Normally, there are many schools of thought that managers may subscribe to in order to settle on important decisions. The deontological ethics school of thought states that an action is ethical as long as it follows the laid down regulations. Most organizations are bound by state and federal laws and are expected to act within the confines of such laws. Utilitarian ethics, on the other hand states that ethical actions are those that maximize good in a given situation (Caldwell et al., 11).

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A business has various stakeholders at any one time. There are employees, shareholders, the government, customers, and suppliers. Each time a decision has to be made, there is need to take into considerations the interests of each category. This paper will explore some of the issues managers encounter to ensure that the company's image is preserved.

When advertising for positions that are vacant in the organization, the management has to decide on what information to include and what to leave out. The content is quite important because it determines the pool of applicants. The organization can decide to be factual, whereby it will state the job title, the job description, as well as the terms and conditions of service. This ideally would be the most ethical thing to do. In fact, employment law would view this as the right thing to do. An organization that see this as the moral thing to do is following deontological ethics (Caldwell et al., 11). On other occasions, ethical issues arise when conflicts occur between employees and managers ought to interfere (Fallon and McConnell).

However, in other cases, the organization would want to attract a pool of very talented people to apply for the post. The organization could go beyond the information and include perhaps untrue or exaggerated information regarding the terms of service there. Deontological ethics evaluates actions according to their nature as opposed to their outcomes. This would therefore be considered unethical (Caldwell et al., 11). However, utilitarian ethics could see this as moral because the company would be trying to maximize its own good by attracting talented employees.

When searching for people to fill management positions, companies are always seeking to get the best people as long as they can afford to reward them competitively. Research shows that management and leadership are important variables in determining the level of success that a particular company can and will attain. The practice of headhunting has therefore come up whereby a company approaches a person, and offers them the job. In most cases, the person being sourced is already working somewhere else. The chance of career progression is what convinces them to leave their current job and join even a competitor company (Caldwell et al., 2011).

There are many ethical questions that surround the issue of headhunting but some people insist there is no ethical question at hand. First, when a company approaches an employee and offers them a job, they are likely to be distracted from what they are tasked with currently. This may affect their productivity although most of them are experienced professionals and most people think that such an offer should not affect their output. Questions abound on whether it is right to approach an employee without telling their employer. Defenders of head-hunting argue that notifying the employers is not necessary because organizations do not own their employees. As such, employees are free to sample career progression offers that are available to them (Cavanagh, Moberg and Velasquez 405).

The main opponents of headhunting on ethical basis argue that it has negative effects on smaller companies. Smaller companies may not have the financial power to offer the same rewards that bigger companies can afford to give employees. Smaller companies therefore will keep losing their best talent because they cannot pay them competitively. This situation stifles their chances to grow at a fast rate. However, it can also be argued from a deontological point of view that there is no law that expressly outlaws headhunting. In fact, legislating against their practice would be interfering with the labor market (Fontrodona and Sison 36).

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The issue of availing training opportunities for employees has led to a sort of pull and push for the management and employees as stakeholders. Training gives a chance for employees to become more skilled and competitive in the labor market. On the other hand, training can be quite expensive for a company especially when there is no tangible change to the productivity of the company. Therefore, balancing of these two interests is a tough job for management. The ethics question is whether it is right for an organization to try to minimize spending on training when there are training opportunities available for its employees (Caldwell et al., 10).

“As the marketplace for products has grown more complex and the products themselves more sophisticated, buyers have become more dependent on salespersons to know their products and to tell the truth about them"(Marketing and the disclosure of information, pg255). How to maximize our benefits and while satisfying our customers has always been a conflict problem. We want to train our salesperson to make profit for the company as much as they could, but a win for the company cannot stand long. That can make the shareholders happy in the short-run but we will lose our profit in the long-run business activity. What if the customers find out the product we sell to them is not what they really needed but simply an expensive model with some functions which they will never use. So we have to spend some money to train our salesperson make “less” money in order to maintain our goodwill and keep our customers continuing to trust us. A win-win situation is what we are looking for.

Sometimes it is important for an organization to look out for its best interests because it is supposed to be a profit making entity in the first place. Training opportunities are perhaps limitless and a company can spend as much as it wants on training (Runnels et al., 10). However, it is always necessary to quantify the benefits that accrue to the company because of the spending on training. When these benefits cannot be identified, management will face a hard time explaining to shareholders why funds were appropriated to a particular program whose benefits are unquantifiable. Such use of shareholders’ funds may be unethical because the managers would be breaching their fiduciary duty to the shareholders.

Proponents of spending on training argue that employees are important people in the company and determine the success or failure of the company. Therefore, employers owe their employees some level of loyalty. They should help employees take advantage of training opportunities that could come in handy in their current positions and in future as well. Failing to pay for training opportunities available for employees is almost similar to curtailing their career progression (Caldwell et al., 2011).

Whenever a company intends to fill a vacant position, it can do so by hiring a person from outside the company or promote a person from outside the company to hold the position. Normally, a person from outside the company is obviously more experienced and has probably excelled at a similar position. On the other hand, a person promoted from within the company has only his potential to show and the company has to give them time to grow and perform at that position (Runnels et al., 4). The question here is what it the most ethical path to follow for a company seeking to recruit for a vacant position.

When a company hires externally, it is mostly trying to ensure that its productivity is not jeopardized by having an inexperienced person doing the job. This is quite understandable when the position involved determines the productivity and competitiveness of a company. However, the question here is whether it is right for a company to overlook the potential of other employees within the company. Such an action many even prove counter-productive because internal employees will feel that the company does not have confidence in their abilities to deliver at the highest competitive level (Runnels et al., 3). The organization could, in fact suffer high employee turnover rates.

Telling employees that they are no longer needed at a company is perhaps the most difficult task a human resource manager is expected to do. Many situations can lead to a company having to let go of an employee. A restructuring of the company could lead to some position being scrapped, while a drop in demand could also force a company to rationalize their staff numbers. In such situations, the company is pursuing what is best for its survival and this cannot be considered unethical. In addition, as long as the rationalization in done in a legal manner, an organization cannot be considered unethical under deontological thinking (Runnels et al., 6).

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However, when looked at from the perspective of the employees, organizations can be seen as cold and uncaring. Firing of employees often leaves households without incomes and this could lead to lower standards of living and even poverty where an employee cannot find another job in the long-term. Organizations are supposed to consider this and probably do more when letting employees leave. For example, the organization could offer training opportunities for employees before letting them go so that they have more chances of finding jobs. The other option would be to negotiate employment opportunities at partner or affiliate companies (Caldwell et al., 4).

Managers ought to consider the numerous conflicting interests as presented in this research essay. The decisions ought to be considered when managing and making decisions concerning issues reliant on human resources. For instance, employers are supposed to avail training opportunities and still control operational costs. It is best for a company to identify the ethical standard that it will adhere to for purposes of consistency in decision-making. This will help future managers of the organization understand the thinking behind certain actions.

Work Citied

Caldwell, C., Truong, D. X., Linh, P. T., & Tuan, A. 'Strategic human resource management as ethical stewardship'. Journal of Business Ethics, 98(1), 171-182. 2011

Cavanagh, G, F, D, J Moberg and M Velasquez. "Making business ethics practical. ." Business Ethics Quaterly (1995): 399-418.

Fallon, L, F and C, R McConnell. Human resource management in health care: principles and practice. Sudbury, MA: Jones and Bartlett, 2007.

Fontrodona, J and A.J,G Sison. "The nature of the firm, Agency theory and shareholder theory : a critique from philosophical anthropology." Journal of Business Ethics (2006): 33-42.

Runnels, V., Labonté, R., & Packer, C. 'Reflections on the ethics of recruiting foreign-trained human resources for health'. Human resources for health, 9(2), e1-e11.2011

Arnold, Beachamp & Bowie. “Ethical Theory and Business”,Marketing and the disclosure of information, pg255.

Annotated Bibliography

Caldwell, C., Truong, D. X., Linh, P. T., & Tuan, A. 'Strategic human resource management as ethical stewardship'. Journal of Business Ethics, 98(1), 171-182. 2011

The authors explain what they feel is the role of a human resource manager in helping an organization become more ethical. For example, they explain some of the ethical questions that managers are faced with on a daily basis including training budgets and recruitment options. They explain how each of these decisions can be used to set a precedence that will set the organization on a path of more ethical existence.

Cavanagh, G, F, D, J Moberg and M Velasquez. "Making business ethics practical. ." Business Ethics Quaterly (1995): 399-418.

The author offers an overview of the ethical theory roles in the business. The authors state that business ethics ought to focus on norms. They offer an ethical literature concerning the ethics that should be employed in the business. It offers an overview of the recruiting processes developing countries and the ethical issues tangled in such processes by the management. Through the methods employed in staffing in such developing countries, one perceives the ethical issues used. It provides recommendations of how organizations may tangle business ethics and practices to steer to the success of the firm.

Fallon, L, F and C, R McConnell. Human resource management in health care: principles and practice. Sudbury, MA: Jones and Bartlett, 2007.

The book offers an outline concerning practice skills on how ethics should be applied in the business. The authors introduce the audience to human resource agencies including the manner they ensure fairness and ethics are employed in the business strategies. The book by Caldwell and others provides an overview regarding the dilemmas that managers encounter due to their responsibilities and conflicts deriving from responsibilities of employees as well. It provides an overview on the manner in which the human resource agencies can recognize conflicts in business environments and offer opportunities of minimizing the conflicts. It presents an analysis of the ethical matters that individuals encounter while undertaking their roles in the business. It provides an overview of ethical stewardship that organization management and leadership requires. The authors offer a clear understanding concerning human resource originating from the scattered responsibilities of employees and centralized activities.

Fontrodona, J and A.J,G Sison. "The nature of the firm, Agency theory and shareholder theory : a critique from philosophical anthropology." Journal of Business Ethics (2006): 33-42.

The authors offer a standard account concerning the nature of the businesses. It makes an analysis, which is highly dependent on explanations that are coupled with the inputs from the human agency theories. It also includes the conflicting interests with the shareholders and employees in the business. The article present a critique in the light of personality as well as common good postulates. It displays just how personality and shared good values create a basis that not only houses business ethics improved but also similarly gives a more convincing accepting of business as a whole.

Runnels, V., Labonté, R., & Packer, C. 'Reflections on the ethics of recruiting foreign- trained human resources for health'. Human resources for health, 9(2), e1-e11.2011

In this paper, the authors explore the ethical questions that arise from the practice of rich countries tapping the medical personnel from poor countries. The question is whether such practices hinder poor countries from attaining their goals in terms of healthcare provision. They also explore the question whether the medical personnel market should be allowed to operate like any other free market. The arguments given here are quite applicable in other fields of human resource management.

Arnold, Beachamp & Bowie. “Ethical Theory and Business”, Marketing and the disclosure of information, pg255

In the sales section of this chapter, the authors listed the customer trust issue in current business world. How to train our employee to maintain our goodwill and make the customer satisfied should be a consideration for the human resources department