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Ethics and Federal Compliance Laws

Published July 24, 2013 by Mayrbear's Lair

Aristotle

To comprehend the topic of business ethics, it is important to identify the voluntary and legally required aspects of institutional practices and the behavior that supports it. Aristotle (384– 322 BC) believed that a person’s good or bad character was developed by habituation. In other words a person’s goodness or wickedness is developed as the result of repeatedly engaging in acts that have a common quality. These repetitious acts rely on an individual’s natural aptitudes and tendencies to gravitate towards righteous or immoral behavior (Aristotle, 2012).  In other words, the formation of a person’s character emerges by actions that are committed repeatedly in a certain manner and as a result of being guided or receiving direction externally to support these patterns. Once the behavior is understood by the individual, they can then choose to engage their free will. The continuation then, of the behavior, becomes a habit which over time translates into second nature. This demonstrates how a leader’s conduct and business practices cultivate a climate that is adopted by subordinates. During the Enron scandal for example, investigators discovered that Enron’s leaders developed a culture of deceit that was supported by their top executives, board members, and corporate attorneys, to gain the competitive edge and ensure capital gains.

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The Enron collapse revealed deep failings that existed in the American accounting system and in the operation of corporate boards. Enron and other widespread corporate accounting scandals resulted in Congress establishing the Sarbanes-Oxley Act (SOX). It was designed to create a federal oversight system to monitor corporate accounting practices by making financial fraud reporting a criminal offense. Boatright (2009) reported that the SOX Act also increased the penalties for executives that engage in criminal activity. In addition, SOX addressed a wide range of provisions to require corporate transparency in three major areas: financial reporting, corporate boardrooms, and criminal law (Boatright, 2009). Poor business decisions alone however, did not result in Enron’s downfall. What was cleverly disguised from stakeholders was insider plundering. Because of this, Congress feels that Federal oversight is needed. Investors rely heavily on financial reports and in turn these reports can become the vehicles that lead to fraud. For example, by presenting a false image, executives can cover poor performance outcomes to maintain their lavish lifestyles. SOX changed the way corporations address problems with accounting and auditing. It requires that every publicly traded organization establish an independent auditing committee that is solely responsible for detecting fraud. It also supports internal whistle blowing by mandating all companies incorporate policies to support employees reporting acts of fraud without fear of retaliation.

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CEOs careers are now on the line. They are required to sign off on company financial forms to ensure their processors have complied with all mandates. Many corporate chiefs complain about the amount of time and money that is invested to comply with SOX regulations, but most agree that it is worth the trouble to reassure investors. Ferrell et al. (2012) posit that in addition, the law requires corporations to design a code of conduct that includes transparency and accountability in financial reporting to stakeholders (Ferrell, Fraedrich, & Ferrell, 2013). Experts expect further misconduct to occur despite the regulatory laws because global competitors are not required to comply with these regulations. This means that more scrutiny is called for because the more integrated world markets become, the more difficult it is to compete on a global level when the playing field is uneven. In the meantime, only time will reveal the long term results.

References:

Aristotle. (2012). Ethics. Seattle, WA: Amazon Digital Services, Inc.

Boatright, J. (2009). Ethics and the Conduct of Business (Sixth ed.). Upper Saddle River, NJ: Pearson Education, Inc.

Ferrell, Fraedrich, & Ferrell. (2013). Business ethics and social responsibility (9th ed.). Mason, OH: Cengage Learning.

Finding People Who Are Passionate About What They Do

Published May 27, 2013 by Mayrbear's Lair

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Leaders encounter a variety of challenges when it comes to hiring new employees. In addition, during times of downsizing, employers look to existing staff members to step in to pick up the extra work load. This creates an overworked crew who tend to lose motivation which often results in lower quality performances and lower productivity, not to mention does nothing to boost personnel morale (Arthur, 2012). But what does it take for employers to find people that are passionate and will be committed to their companies?

At many organizations, new recruits engage in grueling training techniques provided by the educational system established at the firm. Employees in some companies for example, describe unconventional recruiting methods that resemble those offered in military institutions with boot camp like conditions. In these kinds of arenas recruits are being inundated with training techniques and massive amounts of information. In addition, they are expected to fully commit to every aspect of the organization. Employers implement these methods to arouse passion and motivation in new hires. It also weeds out those who cannot keep up with the curriculum.

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Organizations, in the meantime, do what they can to create more appealing cultures.  For example, companies whose climate includes a leniency on dress code and scheduling, produce a welcoming atmosphere where employees are a bit more relaxed about their appearance. Another alluring aspect is the flexibility to schedule their own work hours. In addition, organizations that offer a platform for socializing is highly favorable among staffers. As a result many have established hospitable areas, events, and activities for colleagues to convene. Some include a fully equipped kitchen to encourage socializing. Other organizations cultivate a climate that reflects an ethic of “work hard, play hard,” which can be very appealing to a more youthful age demographic.

Working in an environment with people who are passionate about their organization is a highly motivating factor that attracts certain kinds of individuals as well as charismatic leaders who lead by action. In other words, managers that walk their talk and are not afraid to roll their sleeves up to work right along with staff members inspire higher performances from staff members. An organization that is focused on supporting staff members future and career growth, provides fair compensation, encourages open communication, and offers employee benefits are all appealing employer components that provide value to the people that serve to help these leaders achieve organizational goals.

Organizations that employ a huge staff, look to attract the best recruits possible because it is essential to their success. The recruiting methods successful companies employ seek top notch candidates with very similar techniques implemented in the most successful MLM organizations, like World Ventures. Leaders that engage in effective strategies can tap into an individual’s passions to motivate and inspire actions that will drive their success. Employers are required to do their homework first and foremost in seeking new candidates. This means building a reputation and becoming an employer that people want to work for. In addition the most effective leaders understand that the significant components they seek in employees are value, loyalty, and commitment. Knowing this, they build their recruiting strategies geared to achieve finding people who can meet those criteria. Executives and HR Units must keep their recruitment strategies current and employ the best techniques to attract top level performers (Hayes & Ninemeier, 2001). These are a few tactics organizations use to find and retain top level personnel that are passionate about their work.

References:

Arthur, D. (2012). Recruiting, interviewing, selecting & orienting new employees. New York, NY: AMACOM.

  1. Hayes, D., & Ninemeier, J. (2001). 50 one-minute tips for recruiting employees. Seattle, WA, USA: Crisp Publications, Inc.

Successful Entrepreneurial Organizations

Published March 20, 2013 by Mayrbear's Lair

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The Starbucks story is a fascinating tale of an enormously successful business. What began as a single café on Seattle’s waterfront has sprouted into a company that now consists of over sixteen hundred stores globally with a new store opening every single business day. Just as remarkable as their growth, is the fact that Starbucks manages to maintain its renowned commitment and objective to sell excellent products, as well as support customer and employee satisfaction (Schultz & Yang, 1999).

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In 1982, Starbucks’ current chairman and Chief Global Strategist, Howard Schultz left a respectable national sales managerial position with a European housewares company to join the small Seattle-based coffee roaster and retail store. The small organization came under Schultz’s radar because of the excessively large number of coffee makers they purchased from his company. During a sales visit, he became fascinated with the opportunities this venue presented. He envisioned what Starbucks could be, not what it was (Stallard, 2008).

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The key to Starbucks’ success was building a social community based on trust and confidence around the romance of the European coffee experience. In doing so, Starbucks created a culture that strikes an emotional chord with customers by creating an ambiance reminiscent of the front porch experience. In addition, they strive to create an environment that promotes emotional ties between organization and employees that includes rewards and benefits like full time medical coverage even for part time employees. This strategy is aimed to make workers feel valued, which in turn builds their confidence, self-esteem and self-respect. There are employees however who have voiced grievances in the organization’s competitive environment. For example, some retail employees contend that there are middle managers (Operations, District and Store) that create work environments so demanding and unreasonable, it leaves retail staff workers in tears. Others contend middle managers are ruthless, profit-focused slave drivers from a driven focus to remain at a top position in the marketplace.

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Regardless of the few employees who have voiced negative experiences, Starbucks remains a reputable company that leads with its heart and nurtures the soul while continuing to enjoy large volumes of profit. The franchise has been able to provide long term value to shareholders without sacrificing their core beliefs in treating both customers and employees with respect and dignity. This is what team leaders believe are components that translate to good business. Schultz’s vision to create a world that is better from the drabness of everyday life, helped guide him to give genesis to the neighborhood oasis where an individual can take a break, listen to some music and ponder important questions in life over a nice cup of designer coffee. (Schultz & Yang, 1999).

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References:

Schultz, H., & Yang, D. (1999). Pour your heart into it: How Starbucks built a company one cup at a time (1st ed.). New York, NY: Hyperion.

Stallard, M. L. (2008, February 15). Starbucks: the story untold. Retrieved March 04, 2013, from The Economic Times: http://articles.economictimes.indiatimes.com/2008-02-15/news/27704610_1_howard-schultz-starbucks-retailer

The Tipping Point Where Power Turns Into Domination

Published December 29, 2012 by Mayrbear's Lair

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Power and domination are central concepts in social science and identifying the tipping point where power turns into domination is a topic that is at the heart of many studies. The difference between power and domination is simply defined as having power to or power over something or someone else.

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In nature there are three basic types of power structure distinctive in mammals: (a) solo, (b) herd, and (c) hierarchical. Solo mammals like tigers and bears, live alone except for mating purposes. Herd mammals, like sheep and gazelles have no social structure but mingle around each other for safety in numbers to ward off predators. Hierarchical mammals, like wolves, chimps and humans, have an instinct for social organization which translates to top dogs and underdogs. For example, in an organizational environment with hierarchical power structures, people compete for higher ranks (Sommer, 2012). This can create a dog eat dog environment for individuals with self-interest motives that thirst for power. The unavoidable dynamic forces of power and domination become distorted because of individuals with hidden agendas, misguided views, and a misrepresentation of authority.

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In his book, Unlimited Power, Tony Robbins (1977) states:

Power is the ability to change your life, shape your perceptions, make things work for you and not against you. Real power is shared, not imposed. It’s the ability to define human needs and fulfill them – yours and the needs of people you care about. It’s the ability to direct your own personal kingdom – your own thought processes, your own behavior – so you produce the precise results you desire (p. 5).

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This is empowering information, however unless compassion is also embraced as an element, unlimited power without compassion encourages those with Machiavellian personalities that crave power to engage in practices that dominate others. These kind of individuals are willing to manipulate a situation or others to achieve personal gain and are more than willing to seek unauthorized and unethical means to attain power, control, fortune and fame in their domain (Baack, 2012). They engage in tactics seeking alliance with others like minded or content to act as followers, and use any means available to divide and conquer seeking to build their empires.

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When an individual is in a role of authority, they can either choose to be leader that dominates others, using whatever means they can to achieve their end goal, or they can choose to be the kind of leader that helps people discover and develop their own unique qualities of greatness. These kinds of leaders find their success in the success of others. I believe we can harness the power of the mind to have, do, achieve and create anything we want. The key in how to achieves one’s goals lies within each individual’s moral compass.

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References:

Baack, D. (2012). Organizational behavior. San Diego, CA: Bridgepoint Education, Inc.

Robbins, A. (1977). Unlimited Power. (p. 5). New York, NY: Free Press.

Sommer, L. (2012). Beyond office politics. Seattle, WA: CreateSpace Independent Publishing.