Strategic management involves the formulation and implementation of strategies that allow the organization to realize its goals. Ethical consideration during strategic plan development is essential to establish the moral standards that guide business operations. Therefore, integration of business ethics in strategic management is vital as every strategic decision has a moral consequence. Ethics provides a structure of moral principles and a code of conduct that allow individuals to deal with ethical issues that arise within an organization. Ethics in strategic management has a significant influence on how the business relates to its employees, customers, and society.
Need for Ethics in Strategic Management
Incorporation of ethics in strategic management provides a ground for ethical decision-making, which improves employee satisfaction and increases the competitive advantage of the organization. In this context, there are several benefits of ethics in strategic management, which makes it an essential component of the strategic management process.
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First, ethical business operations allow an organization to be evaluated as credible and dependable. A business entity that is believed to uphold moral values draws respect among the community members, which builds its reputation and credibility (McManus, 2011). In this sense, the organization gets a positive evaluation from individuals with minimal knowledge about its business operations. This has the benefit of widening the consumer base as the business keeps on building its reputation. Secondly, ethics in strategic management improve employees' satisfaction, enhancing their performance (Menzel, 2012). Ethical management ensures that the basic human needs are met where employees are treated fairly, and their dignity is upheld. Also, moral values such as honesty and respect improve the employee’s satisfaction as they feel appreciated by their employer. This creates a work environment that allows them to unleash their full potential and improve their work performance—the organization benefits in that the improved employee performance allows the timely realization of the strategic business goals.
Thirdly, implementing a strategic plan requires the collaborative efforts of the management and other stakeholders such as employees. Therefore, unity among the managers and other stakeholders is central to effective strategic management. Ethics have a significant role in ensuring that values are upheld in every step of strategic plan implementation. For instance, supporting integrity at the management levels strengthens the bond between managers and the employees as respect and trust describe their association. Integrity is an essential leadership quality as it builds trust and confidence among the employees, thus improving their performance (Menzel, 2012). Also, ethics provides leaders with grounds for ethical decision making to the satisfaction of all stakeholders in strategic management implementation.
Lastly, strategic management safeguards society and, by extension, the environment from harm from business operations. The business has a moral responsibility to protect the environment from the harmful impacts of its activities, such as releasing industrial waste into the water sources. The code of conduct incorporated in strategic management provides guidelines on how to secure the environment and not cause an imbalance in the ecosystem. Ethics in strategic management also ensures that organizations participate in community development initiatives to empower and improve people's economic and social well-being (Falkenberg, & Brunsæl, 2011). Moreover, ethics ensure that aspects of discrimination and corrupt activities within the organization are mitigated. This curbs exploitation of employees and customers by the business, even where legal provisions do not protect them. It also allows individuals to have equal opportunities to get served or employed in the organization. Incorporation of ethics in strategic management ensures that all decisions and business operations adhere to the organization's moral standards to ensure the realization of its objectives.
In conclusion, the necessity of ethics in strategic management has far-reaching benefits not only to the organization but also the society. Ethics provides a framework within which moral decisions are made to build the organization's reputation and improve its competitive advantage. An organization that does not uphold a high level of moral values in strategic management is less likely to attain its goals. This is because the stakeholders who are entrusted with implementing the strategic plan do not have an enabling work environment enhanced by strong ethical values to unleash their potential.
References
Falkenberg, J., & Brunsæl, P. (2011). Corporate social responsibility: a strategic advantage or a strategic necessity?. Journal of business ethics , 99 (1), 9-16.
McManus, J. (2011). Revisiting ethics in strategic management. Corporate Governance: The international journal of business in society .
Menzel, D. C. (2012). Ethics management for public administrators: Leading and building organizations of integrity . ME Sharpe.
