Sample Research paper on Valuing Organization Transparency

Valuing Organization Transparency

Introduction

Contemporary organizations, be they nonprofit, nongovernmental, governmental, or for-profit are typified by a pluralistic character and function in internal as well as external settings of constant change. Most of the studies of organizational operations in the modern world usually entail some organizations considered by the public as unethical. Transparency has comprehensible implications for customers too (Francis, Huang, Khurana, & Pereira, 2009). Valuing organization transparency and ethics deserves pertinent, honest, and easily comprehensible information concerning the goods and services of a company in such a manner that customers spend their money more sagely, for their welfare, the success of the organization, and for the interests of the community and surroundings at large. Lack of transparency and ethics make disaster occurrences more probable since organizations appear less capable of comprehending and satisfying the requirements of numerous stakeholders in ever progressively intricate and tumultuous settings. Even organizations that have plunged into near fiscal bankruptcy and ethical dishonor because of unethical judgments arrived at in the course in the course of crisis will emphasize the significance of valuing transparency and ethics, for instance, the case of Ford, General Motors, and Siemens to mention a few. Some organizations have encountered challenges and succeeded with their status improved. Evidently, tackling challenges and possible problems could be a hard, continuing, and ever-varying journey for the contemporary organizations, with few guides to assist in improving judgments reached under the force of crises.

Ethics and Transparency

Transparency and ethics are fast turning into catchphrases in organizational management operations. Though public concerns in organizational endeavors and their impacts are not new, the earlier favorite subject of a few activist customers and ethical shareholders is progressively extending to the majority and organizational managers cannot afford to disregard it (Champy, 2008). Consistent with the 2014 Edelman Trust Barometer, about 55 percent of individuals across the globe have confidence in corporations, but that leaves approximately 45 percent less convinced. Being more transparent is one method that organizations can fill up the gap. Ethics, confidence, and transparency merge, successively, to back sustainable development. Through ensuring the availability of reliable environmental, social, and ethical information in the knowledge of people, organizational leaders and customers can make more knowledgeable and better judgments, which is favorable for them and for sustainable growth of organizations. Customers will (expectedly) purchase most of their goods and services; shareholders will buy more of their stockpiles; workers will operate diligently, and the organization will succeed. Nevertheless, the path to ethics and transparency is not an easy one (Johannesen, Valde, & Whedbee, 2008). Many organizational leaders still dread that greater public disclosure will make them susceptible to criticism. In other instances, organizations just lack the appropriate information systems.

Lack of Transparency in Siemens

By the close of 2006, regulatory explorations of Siemens, the German engineering multinational corporation, disclosed that hundreds of workers had been siphoning billions of dollars into fraudulent consultants’ contracts, fake bills, and shell companies to pay huge kickbacks to get contracts. This could be expressed as a coordination of structured irresponsibility that was inexplicitly overlooked (senior executives utilized sticky notes to approve possibly criminating papers). The disgrace undignified Siemens, not just before infuriated shareowners and investors but as well the German populace, and resulted in degradation of its workers (Smith-Meyer, 2012). The credibility of the corporation came under intense inquiry, and its veracity was called into question, in addition to the questioning of the goodwill of its senior executives for seeming to condone such occurrences. A principal group of shareowners questioned the corporation’s basic proficiency for its addressing of the situation. However, many independent anti-corruption and ethics professionals, encompassing the Organization for the Economic Co-operation and Development (OECD), and the United States Federal authorities, have extensively praised the entire reaction of the corporation to the issue.

Initially, Siemens downplayed the problem as an issue of just some million dollars (Smith-Meyer, 2012). After a month, its approximation of the money entailed had risen to 420 million Euros. Chief Directors frequently denied knowledge or participation. The first approach seemed self-seeking and did little to safeguard, leave alone boost, shareowners’ feelings of its reliability and the majority saw it as incompetent. Nevertheless, it was not until 2007 that the most serious disclosures were revealed. This led to the exit of the then Chief Executive Officer, Klaus Kleinfeld, and chairman, Heinrich Pierer, and the judgment by the succeeding Chief Executive Officer, Peter Loscher, to declare a month of pardon for workers to step forward, explicitly except earlier executives. Approximately forty whistle-blowers presented criminating proof, which stretched the scandal’s scope to the former directors.

Different systemic components have been cited as leading to the scandal, encompassing an aggressive development policy that, arguably, forced directors to view kickbacks as an attractive short-cut to striking hard performance goals, an intricate, matrix-like formation that permitted departments to operate themselves, and bad accounting practices. In particular, the then corporate culture of Siemens appeared openly tolerant of kickbacks, assisting executives to feel they were not just tolerated but inexplicitly encouraged. Earlier, Siemens assigned Michael Hershman, co-initiator of Transparency international, to operate as its consultant, a clever attempt to associate the corporation with a major anti-corruption professional. The corporation enforced strict regulations as well as anti-corruption practices. It appointed more than five hundred permanent compliance representatives (a great increase from only eighty-six in 2006), and an earlier Interpol representative to lead its new survey section. Siemens as well initiated deference hotlines, hired an outside investigator founded globally and online, and started a website for workers to assess risk in their interrelations with suppliers and customers (Smith-Meyer, 2012).

In an effort to modify its organizational culture, the corporation started an extensive training and edification program concerning anti-corruption processes for its workers. In 2008, the corporation equipped over 50% of its 400,000 powerful international labor force on anti-corruption concerns. The corporation affirmed that it would steer clear of competition in a number of known hot spots of corruption and unethical progressions, for example, Sudan, though not significantly strenuous to the finances of the corporation. More considerable was the judgment to defer its requests for finances willingly from the World Bank for a couple of years. Siemens adhered to a 15-year program to give 100 million dollars to non-profit organization combating corruption; moreover, the corporation embarked on more than nine-hundred internal disciplinary measures, encompassing sackings (Smith-Meyer, 2012).

Over and above the staff pardon, Loscher substituted Siemens’ impressively intricate matrix design with a more efficient one consisting of only three departments, whose managing directors sat on the board. Many bank account statements, papers, and operations were evaluated. In its entirety, the scandal cost the corporation more than 2.5 billion Euros, encompassing 2 billion Euros of penalties. The corporation was as well obstructed from operations with some of its customers. The outlay to workers of a couple of years of disgrace under strong public evaluation, particularly in Germany, was hard to compute. Loscher was praised for his efforts to stopping corruption, and he confessed that transformation of corporate culture to one propelled by ethical values and transparency was a marathon for the corporation and not a sprint. By mid-2008, nevertheless, a number of directors were suitably certain to pronounce Siemens the most transparent and ethical corporation (Smith-Meyer, 2012).

Recommendations to Enhance Transparency and Ethics

As major drivers of organizational development, workers should not be disregarded. The merits of a transparent workplace culture are multiple with job satisfaction being an obvious positive aspect. Consistent with current studies, more than sixty percent of all United States employees are satisfied in their occupations knowing that their bosses are assisting in the protection of their work environment. Yearly sustainability accounts, committed intranets, and training programs denote only a few approaches of the means in which organizational leaders should seek to ensure that their employees are well-versed. Communication systems that permit worker engagement signify an especially strong manner of attaining organizational transparency and ethics (Christensen & Kohls, 2003).

For enhanced transparency and ethics in organizations, organization should seek collective measures. Since organizational transparency and ethics are associated with cultural, environmental, and social concerns, organizations can rarely attain paramount results of their operations devoid of teaming up. Most of the resolutions to unethical practice and lack of transparency necessitate management advances encompassing sound management, collective exploits, and joint venture (Christensen & Kohls, 2003). By merging resources and combining a broad variety of technology and knowledge through partnerships for a common objective, organizations could react to unethical practices and lack of transparency more successfully than via personal endeavor. Shared actions are especially beneficial in evaluating and handling change impacts as there are huge gaps in knowledge associated to adhering to organizational transparency and ethics.

Since flexibility is crucial, the greatest thing to carry out is to utilize dissimilar media so individuals can connect with the one they establish to be the most available. The precise concentration of corporate transparency and ethics will act dissimilarly for dissimilar organizations. For some organizations, investor assurance could be vital to their development policy while, for others, it could be customer confidence and inclination. In due course, those priorities could be changed as well (Halverson, Murphy, & Riggio, 2004). Nonetheless, the dedication to be as transparent, ethical, and reliable as achievable should never change. Opaque and unethical organizations have attracted great criticism, merited and unmerited. The reporting approaches of organizations should provide ways of expressing transparency and ethics with avenues such as participating in more public strategy arguments on major Environmental, Social, and Governance concerns and being a dedicated member of the corporate responsibility society.

Conclusion

Present-day nonprofit, nongovernmental, governmental, or for-profit organizations are symbolized by a pluralistic disposition and role in internal as well as external settings of steady change. Valuing organization transparency and ethics warrants pertinent, truthful, and easily comprehensible information in such a manner that customers expend their money more astutely, for their welfare, the triumph of the organization, and the interests of the community. Ethics, self-confidence, and transparency join to back sustainable development. Through ensuring the accessibility of dependable environmental, social, and ethical information in the understanding of people, organizational directors and customers can make more clued-up and better judgments, which is constructive for them and for sustainable development of organizations. In late 2006, regulatory examinations of Siemens unveiled that hundreds of workers had been tapping billions of dollars into deceptive specialists’ contracts, fake bills, and shell companies to pay huge kickbacks to get contracts. The ignominy undignified Siemens, not just before enraged shareowners and investors but as well the German populace, and resulted in the deprivation of its workers. Nonetheless, in 2008, after cleaning up, a number of executives were adequately certain to proclaim Siemens the most transparent and ethical corporation. For enhanced transparency and ethics in organizations, some of the things that organizations should do encompass seeking collective measures.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

References

Champy, J. (2008). Smart leaders, smart lessons. Leader to Leader, 1(50), 7-10.

Christensen, S. L., & Kohls, J. (2003). Ethical Decision Making in Times of Organizational Crisis: A Framework for Analysis. Business & Society, 42(3), 328-358.

Francis, J. R., Huang, S., Khurana, I. K., & Pereira, R. (2009). Does corporate transparency contribute to efficient resource allocation? Journal of Accounting Research, 47(4), 943-989.

Halverson, S. K., Murphy, S. E., & Riggio, R. E. (2004). Charismatic Leadership in Crisis Situations A Laboratory Investigation of Stress and Crisis. Small Group Research, 35(5), 495-514.

Johannesen, R. L., Valde, K. S., & Whedbee, K. E. (2008). Ethics in human communication. Illinois: Waveland Press.

Smith-Meyer, A. (2012). Siemens: Defying Belief. Journal of Business Compliance, 1(1), 25-32.