Part I: Creation of One Sony
Business managers need to be aware of their responsibility towards the society in addition to how their employees conduct themselves. This will play a vital role in the improvement of the economic systems. Firm’s, which do not have simple ethical framework face, challenges when making decisions in the business. Stakeholders in an industry expect the managers to pursue the company’s objectives and goals as well as respecting the surrounding business environment and society (Tai & Chuang, 117). The managers need to be trained on the various ethical business theories to make decisions, which enhance high profitability, transparency, accountability, and sustainability. For example, in 2016, Satyam Computers which is a global company dealing with IT was reported for involving itself in deceitful financial activities. The company overstated its revenue and profit. The company had reported a cash reserve of $1.10 billion, which only existed in the books and not in reality. This module aims at addressing the corporate social responsibility, business ethics and how to enhance sustainability in business without involving structural changes. This module targets the managers, CSR managers, community affair operators, employees and other stakeholders in the firm.
Introduction to Business Ethics
Business ethics refer to the principles, values, norms, and actions that govern individuals at the workplace. Business ethics has features such as; code of conduct, protection of the social groups, moral and social values, voluntary, requires education and guidance among others. Business ethics aim at ensuring healthy competition; ensure accuracy, payment of taxes regularly, avoidance of exploitation of customers, fair treatment of the employees, avoidance of monopoly, acceptance of social responsibilities among others.
Normative Ethical Theories
The principal purpose of normative ethical theories is to provide principles, which are justifiable and reliable about what is moral or immoral. The theories help in explaining and describing the ethical and moral phenomena in the businesses. Normative ethical theories have structural characteristics in that one can be able to separate multilateral structure, which is composed of general moral principles, particular moral principles and judgments and the moral standards. Moral standards provide the relevant principles of the normative ethical theories. For example, “Actions are moral to the extent that their results produce happiness.” There is a difference between the moral principles and the moral standards, in that the moral standard shows how the moral principles are generated and the characteristics that the moral actions should have.
Moral principles determine whether all the actions in different classes are moral or immoral. For example, “It is immoral to act with the direct intention to kill a human being.” Particular moral judgments and principles level focuses on specific actions in different classes. For example, “Spousal abuse is immoral.” Ethical codes are developed from the particular principles and judgments (Beauchamp, Bowie & Arnold, 43). Normative ethical theories have underlying assumptions like; it focuses on an individual’s moral evaluation, focuses on the definition of the concepts well and right and whether the ethical knowledge has an origin. For example, when considering that the conviction and execution of the Socrates are immoral, one has to consider whether the judgment is correct. When evaluating the decision, one has to consider factors such as; the individual’s motive, intention, character, and the action’s consequences. The definition of the terms good and right can be done about the other. This means that what is good can be right and what is right can be good. For example, being honest is good since it is the right action and being honest is right since honesty produces some good. Because of this, normative theories focus on the intention of an individual rather than the consequences. In conclusion, normative theories concentrate on the origin of ethical knowledge originates. The source may be from experience or reason.
Ethical issues always arise when people are forming new businesses or when conducting business transactions. Issues that may occur include honesty, harassment, and behavior of the professionals, harassment, fraud, or the environmental issues. Business should endeavor to make sure that the ethical issues are well addressed. Sony is committed to the ethical business conduct and complying with the applicable rules and regulations (Demise, 212). Sony has established Group Code of Conduct that has their core values, and the compliance standards and regulations. The Code of conduct shows how it should carry out business dealings, respect for human rights, fair competition and safety of the products and services. Sony has reporting channels such as Sony Ethics and Compliance Hotline where people report cases of the ethics violation. Additionally, it has Global Compliance Network that implements the compliance initiatives.
Corporate Social Responsibility
Corporate Social Responsibility refers to the impacts that an organization has on the society. CSR has benefits such as; good customer relationships, cost saving, access to capital, human resource management and managing of risks. Sony is focused on ensuring that its businesses are carried out in a sound, moral and responsible manner. It tries to improve its technologies through innovation to build a better and sustainable world for all people on the world (Johnson, Scholes & Whittington, 43). Due to the climatic changes, increased number of refugees and the many threats of terrorism, Sony have increased social instability to help. Additionally, it has increased awareness on the need to promote culture and respect the different values in the society.
Part II: Approach to change by Sergio Marchionne
Sergio Marchionne was known for transforming an Italian automotive group Fiat. Also, he led to the transformation of United States automotive group Chrysler which was on the brink of becoming bankrupt. After he had taken over a struggling Italian car manufacturer company, he was able to lead it to profitability within two years. Fiat and Chrysler established a strategic alliance with the aim of rescuing Chrysler that was on the verge of being bankrupt. Fiat took a 20% share of the Chrysler group. In 2011, Chrysler was able to pay many loans that it owed to the United States government leaving Fiat with a stake of 50% (Garibaldo, 11). In 2014, Fiat negotiated with Chrysler to take over the remaining shares of Chrysler, and a deal agreed on. Marchionne set a corporate objective of 130 billion Euros income by 2019 after the groups merged. This would represent a 50% increase of the current income. This goal is realistic since the products of Fiat and Chrysler are complementary. All these developments have been possible because of Marchionne’s approach to change. The various methods to change by Marchionne and their appropriateness in the context will be discussed in this paper.
Marchionne once said, “We spit blood to clean up and restart Fiat. When I took over, there was a smell of death here.” Marchionne believed that one did not have to start a new car manufacturer for one to succeed (Di Minin, Frattini&Piccaluga, 133). He joined Fiat and Chrysler when they were on the verge of collapsing and was able to transform them. Marchionne molded the Fiat 500 on the iPod until they were ranked in the top ten selling cars in the United Kingdom. The vehicles became stylish and affordable, and people did not have to think twice before they bought them. This approach was relevant in this context since there was a good environment to raise the Fiat and Chrysler, groups.
There was a leadership problem in the Fiat group before Marchionne joined it. Forbes and Vecchio who were Marchionne’s analysts reported that Marchionne fired one manager a day. This was a decision that other members did not want to take (Caiazza, Nueno& Ferrara, 67). The analysts reported that the communication from the employees to the management was slow. Because of this, Marchionne reduced the number of layers of management that existed. These decisions led to clashes with other people, and he would fire them. These decisions to change the structure of the group were appropriate since if nothing were done, the firms would cease to exist.
Marchionne believed that his competitive edge was speed. This is demonstrated by the fact that he wiped out the layers of management fast to bring new models of management. The rate would ensure that he overcame the slower moving rivals. Marchionne was easily accessible, and when contacted he would make decisions in seconds or minutes. He accepted that his lifestyle had changed and that his wife had left Italy to go and live in Switzerland because he worked all the time. He advocated for communication via phone calls rather than emails which took two or three days to reply. He used his competitive advantage to benefit the company and avoid its collapse. This allowed the company to make crucial decisions in time.
Marchionne took the time to remind his colleagues that there was a deficiency in the Western auto industry. He emphasized that the senior management needed to keep concentrate on the core activities of the group and not get involved in other businesses, which did not add value. This is because the customers wanted to buy cars with quality features. He told his colleagues to say no to those activities that may distract them from producing the best cars. This approach worked, and the company was even ranked top ten as the best car producers.
Marchionne emphasized that leadership was not a quantitative thing. He argued that one had to build trust so that people can follow you when you pull them out. People often drop someone if they do not get the comfort that they want (Caiazza, Nueno& Ferrara, 67). His employees would follow any instruction that he gave them without any hesitation because they all trusted him. Enhancing quality management ensured that the employees would approach him without fear and give their opinion about certain activities in the business.
Successful innovation and success, in general, may be built on failure
Sergio emphasized that people needed to take advantage of the available spaces and not abuse them. Additionally, he claimed that one did not have to consider the method of execution regardless that they can achieve their goals (Caiazza, Nueno& Ferrara, 67). Marchionne did not buy Chrysler, but he believed that he could be able to innovate cars that people would want to purchase. Many firms close down because of lack of innovation, but in the case of Sergio, Fiat and Chrysler organizations were able to transform because of innovation. In conclusion, all decisions and plans executed by Sergio bore positive fruits. Fiat and Chrysler groups were able to recover and make high profits.
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Johnson, Gerry, Kevan Scholes, and Richard Whittington. Exploring corporate strategy: text & cases. Pearson Education, 2008.
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