Title – Ethical Human Resource Management and Development at Beverage Co
Referencing Style – Harvard
Assignment – Based on Australian and UK Universities Guideline
Table of Contents
Maximization of profit era in business have been in existence from the beginning but business ethics were not known or acknowledged in earlier days until 1980’s and 1990’s (Gössling, 2011). Now a days, all businesses whether they small, medium or larger corporation have set code of conduct for business and more specifically human resource management and development ethics.
Human resource management known also as HRM department deals with manpower in an organization. It controls and plan the development of their staff’s learning, growth, training according to organization’s mission and goal and more importantly to their health and safety issues.
Beverage Co is world leading beverage company with diverse range of fizzy drinks, fruit juices and non-alcoholic drinks. With approximately 115,000 employees they had £4billion profit last year, but now they expect it to decline by 5% in following year. Following are the reasons that have been identified as a cause of decline in projected profits of BeverageCo:
- 2% loss of market because of low cost and low price competitors
- 2% loss of market share because of fair trade competitors
- 1% loss of share because of organic and healthy products
Maintaining diversity and ethics in an organization regardless of its size, is getting important and known to all their stakeholders. Through diversity and ethics practice in an organization business enable the structure of employee’s loyalty. It is not doubt that human resource in any organization is an asset that cannot be replaced easily, therefore it is a priority for human resource development department to keep employees manage and resolve their issues while keeping them working safe and healthier environment.
According to Josephson ethical decision making in a business needs three components for a successful implementation thee are as follows:
Ethical Consciousness – Ethics in relation to human resources directly relates to an environment that is practical and according to normal guidelines for all employees in working environment (Deckop, 2006). Ethical consciousness term refers to a situation where human resource and development department have ability to perceive and highlight ethical issues in working place.
Ethical Competency – Human resource and development department is intended to spot problems in a working place or among different departments’ employees, it could be in shaped of communication, knowledge / information sharing, etc (Sims, 2007). Here ethical competency means the finding the gap within the human resources working pattern and engage them within department with ethical code of conduct. Ethical competency is achievable on through reasoning and problem solving skills approaches.
Ethical Commitment – In workplace maintain diversity along with ethics offers business a huge response from their own employees in terms of commitment and higher level of productivity. Human resource management HRM professional needs to be ethically committed to resolve the issues ethically without any favours or influence.
Safeguard equal opportunities across all HR practices
Majority of decisions that managers, directors, key stakeholders take, more specifically decision taken by human resource department must have ethical element in it (Gössling, 2011). It is because they have priority of keeping all employees engaged in achieving organizations’ goals while achieving and meeting their basic need of working environment at work place. Below, in context of human resources management and development researcher will discuss and elaborate functionality of each following component:
- Management Training
- Work Load and Case Management
- Continuous professional Development
No matter what business operation we talk about all of them must have ethical approach towards conducting business activities, or otherwise, businesses would either loose competition in market or would have negative impact on society. For instance, if an auditor who is closing the annual accounts found discrepancies in financial statement and do not disclose it to stakeholders in final report, for any reason than this practice of auditors would be call unethical and a fraudulent activity (Ehnert, et al., 2013). On other hand if we examine similar practice on smaller scale within an organization where sales individuals have not met their targets of the month and report false target achievement. Their intention may have been to protect their job and adjust the target limit in following month, would not count as ethical practice. It is because in the monthly and quarterly financials report it would create financial discrepancies and present wrong achievements to recent years or months achievements.
Ethics in all our actions represent by five key factors, that led one’s action either to be beneficial for society and working environment or create un even or unequal opportunity environment for all. These five ethical factors are as follows:
Factors affecting ethical managerial behaviour:
In organization regardless of its size all employees have right to be treated equally and provide with basic working environment and opportunity to grow and learn with continuous professional development. In an organization for an employees working on lower level, means working as an assistant like warehouse assistant, production assistant, etc., are been treated with different thoughts and beliefs (Gössling, 2011). Below figure 1 show a brief practice and factors affecting ethical decision and choices within an organization:
As shown in above figure there are three basic ethical factors that changes in every organization from a managerial prospective. For instance production house in China may produce goods and services with low production costs, but their working environment from selected case study of BeverageCo shows that working environment is not suitable for employees, and they are now planning towards workers union to demand their rights. The decision of ethical working environment should be incorporated in all types of department within an organization regardless their ethnicity or religion or personal preference of locations, etc.
Safeguard and equal opportunity through diversity in the workplace make all employees encouraged to participate maximum effort in organizational goals and make it more profitable. Business who have diverse policies in their recruitment process and in all their internal process get more globalise benefit and improved ROI return on income compared to those without diversity policy and procedure into their organization (MSG, 2014). Today’s competitiveness have brought cultural diversity even to small business owners, therefore to stay ahead in business there is must requirement of diversity ethically required in all sizes o businesses.
Another safeguard for equal opportunity for all employees is through management training that must consist code of conduct and ethical policies mentioned for all employees with non-discrimination practices. Continuous trading to diversity, cultural issues and ways to resolve with ethical code of conduct would can mitigate future issues regarding ethics and diversity.
Continuous professional development is also known as CPD, through this program employees not only receive best tools to perform their activities in smarter way but also become an important asset. CPD also ensure that employee stay loyal to company’s mission, values and goals. Orientation introduction and training by human resource department opens up a code of conduct of ethical measures and create clear understanding of organisations corporate social responsibility also known as CSR (Yüksel Mermod & O Idowu, 2013).
Mentioning the Human resource management (HRM) is the moral compass of organization, would be true. For instance, human resource management is responsible for hiring an employee that is not only affiliated with organization’s mission and long term goals but also add values through his devotion and recent experience (Ehnert, et al., 2013). Therefore, one employee is hired he must be provided with an equal opportunity to grow with given sustainable and safety to work environment. As discussed in case study, BeverageCo have production houses in different countries such as, in UK where they have highest level of product quality, committed employees and an excellent working environment. On the other hand, there second production house is based in China where they have competitive benefit of lower cost of production than their rest of production houses (Chron, 2016). Whereas, condition of working environment in Chinese factory is not favourable and ethical code of conduct have not been introduced into their human resource management and department at recruitment process. BeverageCo have been failed to provide a basic working environment and taking care of employees’ basic health requirement at work, rather they only focuses on yearly profit ration and their market shares. An ethical dilemma arises here when a researcher see huge difference of ethical behaviour in UK’s production house, which BeverageCo is planning to shut due to higher cost and move the production of UK’s factory to China or lower cost labour factory in Asian continent.
As an ethical and responsible organization BeverageCo needs to create an equal opportunity with diversity factor into all their business operations (Chron, 2016). Meeting stakeholder’s interest in terms of profit stays important but it cannot be compared with employee’s health requirement. Therefore, it is a responsibility of human resource management department to introduce work ethics and environmental code of conduct into their Chinese factories and introduce trainings that are not only related to professional development but also offer their personal development factor into these trainings. As shown in case study that BeverageCo is expected to lose 5 of percent of profit compared to last year, out of which is resulted in from competitive cost. For this particular part and to stay competitive, human resource department could play an important part at BeverageCo, by integrating following key factors into all their organizational processes:
Application of above three factors in in human resource management framework would enable employees to become loyal and not to form any union against production houses. Furthermore, it would create sense of ethical commitment that would result them into producing more products with less damage due to provided ethical and professional development training. Furthermore diversity into BeverageCo policies and procedures would encourage them to get communication flow efficient between labour and managers in production houses and between all other related stakeholders.
When it comes to profitability business have to keep in mind all possible relation of corporate social responsibility along with ethical development for their own human resources and department (Sims, 2007). In provided case study, most important and initial point discussed is corporate social responsibility, as Beverage Co is looking forward bidding for the ownership of dam Amazon that would increase their next year profitability to 6%. However local residents of are worried about water level and for their crops would not be sufficient after this dam have been privatized, furthermore, destruction of livelihood because of wasted water spilt by their production houses into their lands. The Amazon dam is located in Brazil. Apart from CSR issue there is been report on unethical code of conduct with employee within Beverage Co production houses in China. In this assignment researcher will highlight and discussed critically human resource development and organization’s role according to corporate social responsibility.
Based on researched and BeverageCo case study analysis it is been found that there have been panic situation among stakeholders and board of directors with current competition and higher costing from UK department. More precisely, the analytics for following shows decline of 5% in profitability, but it could be managed and improved through investing and buying Amazon dam built in Brazil. It would lower the cost of water (raw material) and predict to increase profitability in following year by 6% despite other factors remain same. Here, the important factor that needed Human resource management and department attention is that local communities would lose their livelihoods because of this dam if built and bought in a bid to win. As discussed above in literature review most of companies put themselves socially responsible by giving charity to several organizations but internally their actions does not support social welfares. Similarly, here at BeverageCo HR department need to integrate with local community and ensure that they would be provided jobs and assure their livelihood would improve because of our ethical and diversity approach toward all our employees. According to Doane, 2005 market can deliver long run and short run benefits depending on CSR policy implemented. He also argued that in longer run ethical customer provide successful growth to a company.
According to Fleming and Jones (2013) regard CSR and Employees as “the new opium of the people”. It means employees who are actually producing products at BeverageCo need to feel that they are contributing towards healthier society and should feel good. Therefore if the Amazon dam is built and bought without consent of local citizen it would not leave a bad impact in term of regular local disputes but also it would leave worse impact on employees working at factory level as they would not encourage societies getting harm or losing their livelihood because of their operations at particular place (Hopkins, 2012). Therefore to stay competitive, if the HRMD along with stakeholder choose to buy Amazon dam they need to get full consent along with improved ethical code of conduct in all their organization departments. Race to bottom is a socio economic phrase, it relates to Vietnam’s proposal to Beverage in researched case study means they are attracting businesses for local employment and economic growth, while they are putting a ban on workers union to protect interest of BeverageCo.
Conclusion and Recommendation
Based on analysis of CSR and ethical code investing in country that do not promote healthier environment is not wise decision as long term benefit is only for those organization who are investing in their people and they also acknowledge it with their response back through their effort at work. HRM department in BeverageCo needs to direct employee’s direction towards business goals, find gaps in their communication co working relation through monitoring business code of conducts. HRM must make sure healthier working environment with personal and professional development of all their employees’ at BeverageCo. Conduct training in official duty hours to encourage them to become loyal employees. It would not only improve their professional skills at work, but also it would enable them to produce quality and increase quantity of similar products.
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