This is an executive summary of the LightPaper; Ethical Practices and Organisational Stability
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Background.
Absolutely no one wants to set up a decaying organisational structure, aimed to fail in the coming years or even months. As a result, the niche of organisational sustainability has called the attention of many who hope to weather the storms faced by whatever ever business structure they set up, like the song of a siren. With the techniques and skills obtained from this niche, they hope they'd be able to lead their organizations across the tempest, into the land of El Dorado.
However, the boundaries of this niche is still being developed and it's still yet to be adopted to several kinds of companies. There's no doubt that the benefits of achieving organisational stability are far reaching, ranging from internal benefits such as staff skill and productivity improvement, increased operational effectiveness, which reduces company's running costs and the chances of running into any legal "palava" to external benefits which includes improved reputation and publicity, frictionless customer Relationships and market access and so on, but a clear conceptualization and definition is yet to be achieved, therefore its adoption was highly limited.
Researchers attracted to this field such as Colbert and Kurucz (2007), Bordeau and Ramstad (2005), Eccles et al (2011), etcetera, has driven home the point that Organisational stability involves meeting present customer needs while not disregarding the needs of future generations, all aimed towards long term preservation of the business. Also, some scholars who wine and dine in this niche have mused about this organisational metamorphosing concept and have proposed strategic ways to achieve it. Some of these ways include;
• Adopting right cultural practices. - Ouchi (1981)
• Adopting the right human resource management practices. - Wales (2013)
• Respond to environmental, social and economic challenges with creative, eco-efficient and eco-effective innovations. - Shrivastava (2014)
• High opportunity recognition. - Dissanayake and Semasinghe (2015).
On careful consideration of the above, it becomes conspicuous that achieving organisational stability would be less difficult if the business is founded on truth - solid-rock principles and ethics - and at the same time is dynamic by swiftly responding to challenges while keeping an eye out for opportunities.
True, a lot has been done as regards organisational stability, in study and in adoption. But none has brought it home. Not one of these studies and researches have explicitly stated how these proven strategies of sustaining businesses from collapse can be applied to our local companies in Nigeria, specifically the oil companies in Port-Harcourt. To fill up this knowledge chasm, a study was underwent to provide answers to questions such as; *Although the strategies are proven, what stops these companies from its adoption and implementation? What are the different views of ethics from the perspective of these companies and could this have been the reason why the strategies have little or no implementation? Do the variation of ethical practices significantly affect its local implementation?
Statement of Problem.
Oil Companies have failed to line up their operations with the comprehensive three-way concept of organisational stability which involves economic, environmental and social considerations. In the quest to meet economic goals, they have utterly bastardized the environment and rendered it unfit for both neighbouring humans and animals. As a matter of fact, it is intensifying and they fail to direct their attention to this "crime scene", all because they might incur a temporary cost and lose some profits. Out of poor planning and capital budgeting, they fail to include environmental preservation in their organisational operations - the environment which houses their social interactions with the society who makes up their market.
Filling The Knowledge Pot-Holes.
To fully grasp some of the reasons that lead to the above stated problems, one must understand the two major views as regards the "powers that be" in firms. A statement easily explains these two views reads; Shareholders are always stakeholders in a corporation, but stakeholders are not always shareholders[1]. The shareholders theory see the corporation as a tool of investment to maximize the profit of her investors, regardless of what's sacrificed. In fact, from this perspective, maximizing the profit is what's seen as "ethical". The reformist stance which softens this view towards a direction of more equity is the stakeholders theory, which puts into consideration the employees, bondholders, customers, suppliers and vendors.
It Identifies the complex network of interaction between the firm the internal and external environment and organises the firm to handling these multiple responsibilities.
As scholars have suggested that ethical practices increases the lifespan of organizations, it would be wise if the concept of ethics was fundamentally understood. Before all other scholars made their opinions, I'd say that the apostle paul was the first to hint people about being ethical in his words to the philippians. Paul said; whatever is true, whatever is noble, whatever is right, whatever is pure, whatever is lovely, whatever is admirable—if anything is excellent or praiseworthy. He further asked them to think and do such things.
The opinions of today's scholars are not so far from Paul's. According to some, ethics was stated as the conception of right and wrong behavior. Applied to businesses, It is establishing a just and true relationship between business goals and techniques to specific human ends in a broad variety of aspects which includes competition, public relations, advertising, corporate behaviors locally and internationally, customer autonomy e.t.c.
These ethics are meant to be applied in all activities of the businesses. But often times, Managers are either confused or deterred in application of these concepts to their day to day dealings because of the variation of ethics and the cost associated with it. Don't be quick to think that practicalities of ethics just come with bags of cost, implementation of ethics also breeds a good reputation for the company, attract valuable professionals to it and valuable customers too. I also should generously inform you that breaking ethical laws attracts business crumbling fines. So being ethical saves any business a lot.
The study helps prospective business owners and individuals live out the ethical principles by clearly enumerating out its dimensions with elaborate definitions.
Integrity
Although difficult to define and study, authors have argued that Integrity can be seen as honestly matching words and feelings with thoughts and actions for the good of others. Some authors feel it should be, the end (or results) justifying the means, just as the philosopher, Machiavelli, views it. Generally, this dimension of ethics cannot be feigned and as soon as followers of a leader observes pretence in him or her, they are turned off and they put on a mental guard. On the other hand, individuals with this trait often qualify to occupy leadership positions. Measured on different designed scales, Integrity has shown a significant positive correlation with organisational stability.
Justice Practices
This has been studied for quite some time and it seems literatures cannot provide a general perception as to what is fair socially. Organisational justice has even been defined as an individual's perceptions of and reactions to fairness in an organization. The light paper further explains the three different dimensions of organisational justice i.e distributive, procedural, and interactional - and how it relates to organisational stability.
Accountability
This dimension of ethics is grounded on the notion that one person is responsible to another and hence, the person to give an account of his decisions and actions to whoever he is responsible to. Because accountability has also had an unclear meaning, so many researchers have presented their opinions as to what it should be and an agreement between all of their definitions is; an individual or firm who responsibilities has been conferred on, is obliged to report or provide information as to how she has executed these responsibilities.
What does all this say for Organisational Stability?
With all the several dimensions and sub-dimensions of ethics, the obscurity and complexity of the organisational stability cannot be overemphasized. As a result of this, its adoption and implementation has been to say at the least, a herculean task. Past researches took the organisation as a "black box" and emphasized that only external factors such as environmental regulations and standards set by governments, or pressures resulting from customers’ groups and the community, could compel businesses to adopt the concept.
Recent researches has illuminated this once considered "black box" and shown otherwise, that some internal pressures can propel an organisation's adoption of the concept of organisational stability such as decreasing firm loyalty and workplace satisfaction.
This study of both recent and not-so-recent researches consolidates the fact that organisational stability is a multi-faceted concept and needs to be applied on different levels of the organisation. It also suggests that through some performances, changes and reports, organisational stability can be visible on different levels including the surface, value and underlying levels.
What can be done then to ensure Organisational Stability?
The clear conceptualization and definition may be absent, but the various considerations and views presented by authors of various reviewed literatures can help us strategically implement measures to establish sustainable businesses or increase the lifespan of already existing ones.
Questions such as; What sources of funds are businesses relying on? How difficult it is for businesses to obtain and secure these funding sources? And what are effects of these sources on an overall revenue structure as well as organizational sustainability?, forces business managers to go back to the drawing board to map out plans that answers these questions. Because as history has taught us, funding sourcing can be the most challenging problems of organisations and if not handled properly, forces them to close their doors.
Some other measures that needs to be put in place are those that help adopt or incorporate organisational stability into strategies. From the review of several literatures, several authors have suggested different factors ranging from leadership and institutional mechnanisms to top management buying the concept of organisational stability. Some very few literatures go further to present an integrated view of these concepts like the recent article of Sharma (2009). These study however, still identifies a gap between available information and understanding how it can be incorporated into strategies, primarily because most researches are performed in developed countries.
This identification births the need to aim towards making conceptual advancements from these available researches to integrate sustainability in our local firms and also promote information of how these sustainability measures have been successfully integrated so far by African companies, especially in Nigeria.
It's not enough to be aware of the concept of organisational stability because to know and not to do is really not to know. To lift organisational stability from just being a theory into being a practice require some studies that shows how incorporation of sustainability into project management will affect it. The studies have been made and have shown that indeed some dimensions of ethics such as accountability, transparency and personal values have a significant impact in it. However, the study also identifies that there are some problems militating against its incorporation, such as the difficulty of incorporation of social and environmental dimensions of sustainability. This does not make project managers relent though as they have successfully developed structures to facilitate Integration.
And so what do all these Studies Point to?
Surely, the stress of going through so many scholarly literatures to find out how to stretch the lifespan of Nigerian firms must have yielded some results. Certainly it has!😁
The study shows a tight relationship between financial sustainability and Integrity. Revealing that firms that match honestly words with actions will surely get required funds as they do not mislead any stakeholder. Also confirmed by this study is the significant relationship between Justice practices and Strategic sustainability. This relationship was established from the fact that not only will sound organisational planning help overcome financial challenge, hence no need to use unfair or unethical methods, respondents rating will be based on quality and quantity of products, not based on sentiments. Strategic sustainability also has an intimate relationship with accountability, as decisions and actions are on constant scrutiny and review. Also, the attention of the management is always fixed on the organisations goals and current position, therefore malpractices will be lesser and more support provided.
How does all this relate to a Typical Oil Firm?
Shell was held liable for the Oil spill at Ogoni and they were fined millions of dollars. According to the papers, they only accepted responsibility after a class action suit was bought on behalf of the communities in Bodo, Ogoniland. The paper also reports that two years later, the company only offered £3,500 together with 50 bags of rice, 50 bags of beans and a few cartons of sugar, tomatoes and groundnut oil[2].
The above case clearly depicts a case of clear lack of understanding and implementation of the three-way conceptualization of organisational stability which involves improving economic, environment and social resource. Issues like this arise because companies fail to see the importance of the community they seat on. Regardless of the pure intentions that Shell may have, in the hearts of those displaced people and animals, Shell is no good.
Also seen from the several dimensions of ethics, Shell accepting responsibilities may have led to some promises which is still yet to be seen, they could not or did not honestly match actions to their words. From several individual perspectives, this will be seen as an unfair act of the company which has far reaching effects. Perhaps if there was someone Shell was accountable to, It wouldn't have lingered on for this long and the company would have really mapped out strategies to match actions to words, whilst prepared for the cost.