Ethics And Social Responsibility Flashcards
Ethical and socially responsible management of inputs
— Procurement: ensuring suppliers are ethical and socially responsibl — Fair dealing with suppliers: prompt payments
— Purchase supplies locally: help support local economy. May also increase pollution if purchasing from overseas (travel)
— Environmentally sustainable inputs
— Energy efficient facilities
Ethical and socially responsible management of processes
— Efficient use of resources: minimising waste
— OH&S: going above and beyond legal requirements to ensure health and safety of employees • Implementing technology to improve wellbeing
— Training: Investing in employees and ensuring all employees have access to training
— Outsourcing processes: Keeping processes in Australia
Ethical and socially responsible management of outputs
— Quality: Create good quality products that add real value for money to the consumer. Fit for purpose
— Packaging: Packaging that minimises the impact on the environment e.g. biodegradable packaging
— Honest Marketing: Being honest about the good/service in all marketing materials. Truthful information given
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Ethical management
Ethical management refers to the process of abiding by moral standards and doing the ‘right’ thing in the interests of all stakeholders. An example of ethical management in terms of operations is paying suppliers fairly and treating them fairly as this abides by moral standards and is doing the right thing in the interest of stakeholders especially the suppliers.
Social responsibility
Social responsibility is the obligations a business has over and above its legal responsibilities to the wellbeing of employees and customers, shareholders and the community as well as the environment. An example of social responsibility in terms of operations is a business that only purchases from suppliers that produce resources that are eco friendly, this is going beyond what is required to care for the wellbeing of the environment.
The key elements of an operations management system are inputs, processes and outputs.
Discuss how ethical and socially responsible management practices could affect each of these elements.
Social responsibility refers to commitment to society beyond legal obligations and ethics refers to deciding what is right and wrong in terms of moral standards. Inputs refer to materials used in production such as nails, wood, time and money. Being ethical and socially responsible with the use of inputs could include purchasing from socially responsible suppliers that do not exploit or purchasing environmentally sustainable materials. This would mean that inputs are more expensive but would also result in increased customers and market share. Processes refer to transforming resources (inputs) into goods and services (outputs) being ethical and socially responsible in processes could involve reducing waste by recycling, changing disposal of waste methods and reducing pollution in processes. This may mean slower production but will increase profit in the long run. Outputs refer to the final outcome, what the customer pays for. Being socially responsible with outputs could mean ensuring that products are reliable, fit for their stated purpose and benefit society in some way, without causing harm to customers. This could involve quality management such as quality control which could slow down productivity because it is time consuming but since customers often prefer buying from these organisations it will result in increased customers, sales, market share and competitiveness. Therefore being ethical and socially responsible leads to increased profitability.
Freda will need to employ 250 people and is considering factors involved in managing human resources such as employee expectations.
e. Explain how employee expectations of Occupational Health and Safety (OH&S) and job security will need to be addressed by Freda.
Employees expect that organisations provide workplaces which abide by occupational health and safety requirements. Freda will need to ensure that her workplace is OH&S compliant and may even want to ensure it exceeds these requirements. Freda, due to employee expectations, will need to inspect recent legislative changes in the OH&S legislation to therefore confirm that employees are safe and expectations are met.
Freda needs to ensure that employees feel as though their jobs are not at risk. This involves Freda having to guarantee that employees will not be retrenched due to economic conditions, lower overseas wages, or technological advances. Freda will need to form a human resources plan which considers supply and demand of labour and future employee needs to ensure employees have job security.
Describe and justify two management skills, other than communication, that Freda could use while establishing her business.
Negotiation refers to the process of bargaining between two or more people to reach a desired outcome. As Freda will be employing over 250 people, she is involved in human resource management and as such will be required to negotiate enterprise agreements or individual contracts of employment if she uses a decentralised approach to employee relations. Negotiation would be a key skill to ensuring both herself and her employees were satisfied with their conditions of employment.
Freda would need good time management skills, which involve prioritising tasks in order to meet deadlines. As Freda would need to ensure all areas of the business were ready to start operating on the day of the opening of the business, time management is essential to ensure the business can operate upon opening.
Ethical and socially responsible management is an important part of an operations management system.
Identify and describe two operations management strategies. Discuss the benefits to an organisation of adopting an ethical and socially responsible approach to management in these areas.
Ethical management is the application of moral standards to an organisation’s activities. Social responsibility is the extra efforts an organisation undertakes to provide for the wellbeing of its stakeholders, particularly the community and the environment. One operations management strategy is the management of quality. This can involve quality control in the form of inspectors, quality assurance adopting the ISO 9000 standard and/or Total Quality Management (TQM). TQM is the most effective of these as it is an ongoing organisation wide approach to maintaining quality. It involves three main aspects, continuous improvement, customer focus and employee empowerment. TQM is a continual and collective commitment to aspiring to achieve perfection. Adopting an ethical and socially responsible approach can be beneficial regarding quality. If employees are empowered, this improves their morale and they feel ethically respected. If customers’ needs are a top priority, and quality is of its highest possibility, then customers will be more likely to purchase the products as they appreciate the good quality products. If they have purchased products or received service or high quality this is being socially responsible as the interest of the customers is respected. This benefits the organisation as repeat sales are likely to be made. A second strategy could be Materials management specifically Just in Time (JIT). This involves the sourcing of materials, stock and suppliers required to ensure that stock arrives just as required to be used on the production line. Organisations will benefit if they source their materials in an ethically and socially responsible manner. This involves purchasing from suppliers whom cause minimal damage to the environment, for example Linfox a logistics company aim to reduce their carbon emissions from travel as much as possible. Organisations should also source from ethical suppliers, for example obtaining fair trade coffee or chocolate.
By adopting this ethical and socially responsible approach, customers are more likely to purchase from the organisation as customers are increasingly becoming concerned for the environment and society. This benefits the organisation as they have more sales thus greater profits. Employees also increasingly prefer to work at ethical and socially responsible organisations; therefore staff retention will be increased.
Explain two strategies that an organisation could implement to optimise operations in an ethical and socially responsible manner.
One strategy that an organisation could implement to optimise operations in an ethical and socially responsible manner is procurement. This involves purchasing from ethical and socially responsible suppliers that do not exploit workers or cut corners in production. This would mean that inputs are more expensive but would also result in increased customers and market share.
Another strategy that could be implemented to optimise operations in an ethical and socially responsible way is to only sell products to customers that are safe to use and are of a high quality. This could be achieved using quality control where all products are checked against predetermined standards before being sold to customers.
