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Requisitely holistic ethics planning as pre-condition for enterprise ethical behaviour
Jernej Belak Mojca Duh Matjaž Mulej Tjaša Štrukelj
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Jernej Belak Mojca Duh Matjaž Mulej Tjaša Štrukelj, (2010),"Requisitely holistic ethics planning as precondition for enterprise ethical behaviour", Kybernetes, Vol. 39 Iss 1 pp. 19 - 36
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Requisitely holistic ethics
planning as pre-condition for
enterprise ethical behaviour
Enterprise
ethical behaviour
Jernej Belak, Mojca Duh, Matjaž Mulej and Tjaša Štrukelj
19
Faculty of Economics and Business, University of Maribor, Maribor, Slovenia
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Abstract
Purpose – Ethical behaviour of enterprises can be attained only by planning of ethics. The purpose
of this paper is to show the need for the business ethics planning, to disclose the need for the
requisitely holistic planning of enterprise ethics, and to offer the concept of the requisitely holistic
planning of enterprise ethics.
Design/methodology/approach – The research cognitions on the importance of ethical core
values, enterprise culture, ethical climate and informal as well as formal measures of business ethics
are discussed and argued in application of the dialectical systems theory. The various research
insights are used and applied in concluding concept of requisitely holistic planning of enterprise ethics.
Findings – For successful implementation of the ethics program or plan, it is important that the
program is internalized by all enterprise’s stakeholders. The paper shows that credibility and ethical
behaviour of an enterprise can be achieved only through requisitely holistic planning of enterprise
ethics.
Practical implications – This paper gives us the insights in the state of the importance and
interconnection between ethical core values, culture and ethical climate as well as informal and formal
measures of business ethics in relation to enterprise ethics implementation. The present research paper
also has important practical implications since it shows the importance of the requisitely holistic
planning of enterprise ethics in a sense of sustainable development of enterprises as well as
enterprises’ long-term success.
Originality/value – The available literature does not provide for a similar research or concept of
requisitely holistic planning of enterprise ethics. The paper also models the interconnection between
core values, culture, climate and informal as well as formal measures of business ethics in order to
understand the importance of enterprise ethics.
Keywords Cybernetics, Business ethics, Organizational culture, Organizational planning,
Systems theory
Paper type Research paper
1. Introduction
Enterprise ethics is both a broad and specific topic. As such, it also concerns the wider
public, not solely enterprises and entrepreneurs, which is clearly demonstrated by
recent well-known occurrences of various enterprises’ fraud and manipulation of their
functioning. Such behaviour usually causes dissatisfaction of the parties involved,
scandals, and may even lead to the enterprise’s bankruptcy (for historical review of
business ethics research see Robertson (2008)). Unacceptable behaviour of influential
The previous version of the present paper was presented at the International Conference: IDIMT
2009: System and Humans – A Complex Relationship, 17th Interdisciplinary Information Talks,
9-11 September 2009, Jindrichuv Hradec in Czech Republic. The paper went through double blind
review. The present paper is the improved version.
Kybernetes
Vol. 39 No. 1, 2010
pp. 19-36
q Emerald Group Publishing Limited
0368-492X
DOI 10.1108/03684921011021255
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39,1
persons and organizations, especially enterprises, has obviously grown so big and
crucial, that, e.g. European Union (Commission of the European Communities, 2001)
has found it necessary to pass an official document of corporate social responsibility.
The latter is defined as a voluntary honest rather than abusing attitude and action of
enterprises toward their co-workers, business partners, broader society and natural
environment. Thus, it is about ethics and strategy.
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20
2. Ethical behaviour in enterprise functioning
Several discussions and researches support the importance of considering the ethical
behaviour in enterprise functioning. Some authors even argue the linkage between
ethics and world financial crisis in 2008 as a consequence of the neoliberal neglecting of
the requisitely holistic behaviour concerning innovation (Mulej et al., 2009a). The
above-mentioned crisis can be, therefore, considered as a reason for innovation of
planning and management within the strategy including (corporate) social
responsibility and requisite holism of human behaviour (Mulej et al., 2009b).
Therefore, the innovative planning, necessity and complexity of creative cooperation
aimed at innovation can be considered as a way out from the 2008- crisis (Mulej et al.,
2009c, d). Enterprises are part of our lives and economies in which they co-create the
circumstances of the economic, social-political, ecological, technical-technological,
legal, cultural, supply and sale markets’ and personal environments. This is the reason
why enterprises are increasingly obliged to incorporate ethical orientation in their
functioning. Business ethics is also taught at many faculties and universities, although
we cannot refer to the existence of universal business ethics (Kajzer, 2004).
Consequently, authors we closely studied (Steinmann and Löhr, 1991; Homann, 1994;
Ulrich, 1997; Kajzer, 2004) due to their focus on problems of business ethics, have
different opinions and comprehension of the fundamental instruments and levels
(micro, mezzo, macro) at which enterprises should be guided towards contemporary
ethical functioning and towards the awareness of it as one of the most important
factors of the long-term success of an enterprise. By ethical behaviour only the
enterprise can obtain the status of a credible and a trustworthy partner, which in a
long-run ensures the enterprise’s success. Credibility (Belak, 2002, 2003) is also that
very fundamental characteristic of an enterprise without which the enterprise cannot
introduce and realize its business ethics.
Since, we cannot refer to one model which would uniformly embrace the topic of
enterprise ethics, it is even more difficult for academics as well as practitioners to
clearly define whose responsibility enterprise ethics actually is, and to what extent.
This also raises relevant questions: must enterprise owners (shareholders) and top
management really consider the interests of other enterprise stakeholders (see also
Lamberti and Lettieri, 2009)? Can an enterprise be successful in the long run if its only
goal is profit? What is the role of society and the broader environment in enterprise
functioning and vice versa? What is covered before profit is calculated – are indirect
consequences, such as destruction of the natural preconditions of human survival
included and are they fully? If not, ethics of interdependence and requisite holism are
not considered and all of us are in serious danger.
In this contribution, we argue the importance of the impact of the enterprise key
stakeholders (that is owners and top management) in the business ethics planning and
implementation. The main argument we make is: when the key stakeholders of an
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enterprise support and enforce the modern ethics by core values they will importantly
influence the planning of such type of enterprise culture and climate that will support
and enable the planning and implementation of informal as well as formal
implementation measures concerning business ethics. Therefore, the modern
enterprise ethical behaviour demands conscious and positive attitude towards the
planning of enterprise core values, culture, ethics, norms and climate in a way that
stimulates the desired achievement of business ethics. Based on this argument the
concept of the requisitely holistic planning of constitutional elements as well as
measures for the implementation of enterprise ethics is proposed and presented here.
3. Economic framework for innovation of ethics today
By contemporary ethics we refer to ethics of interdependence of humans as mutually
different specialists including nobody’s right to abuse other humans and nature. We
see it as being in accord with the French revolution’s triple motto – “freedom, equality
and brotherhood”. The latter is repeated in the USA Constitution to which the current
economic practice opposes (Goerner et al., 2008; Brown, 2008; Korten, 2009; Taylor,
2008). So does the prevailing economic theory stressing gross domestic product GDP as
the basic measure of economic efficiency and effectiveness rather than human
wellbeing and happiness. Stieglitz (2009) reports about a new international effort to
design new criteria to be added to GDP, which measures only the market quantity.
This GDP used to be acceptable in the industrialization phase of humankind: until 1820
the economic growth rate used to be 3 per cent per 1,000 years, industrialization made
it grow to 5,500 per cent (55 times) in less than two centuries (Stiglitz, 2009). Over the
six decades following the Second World War, the world-wide population grew 25 times
and consumed seven times more of natural resources, while the Planet Earth was
unable to grow; this made it depleted increasingly and rapidly, which means that we
humans are ruining our preconditions of survival as the current civilization (Božičnik
et al., 2008; Ecimovic et al., 2002, 2007; Ecimovic and Mulej, 2008; Stern, 2006, 2007).
The interdependence of knowledge and VCEN (i.e. circular synergy of values,
culture, ethics and norms) as shown by Mulej (1974, 1979, 1992, 2000) and Potočan and
Mulej (2007) makes ethics crucial for survival and future of the current civilization of
humankind. In other words: if ethics of interdependence does not come to prevail,
children and grandchildren of the current adult humans may receive a dying
Planet Earth rather than a viable and livable one. One may even no longer speak of
the developed and developing countries, but exclusively of the self-ruining ones
(Taylor, 2008).
Thus, innovation of ethics from cherishing the short-term and one-sided selfishness
to ethics of interdependence has become a crucial economic and therefore also political
and managerial topic. Given the critically influential role of enterprises, innovation of
ethics should begin to take place and flourish in enterprises, first of all. Neither
governments nor individuals can attain much with an entrepreneurial support; in
addition, there are world-wide multinational enterprises, but no world-government to
dictate them (Harris, 2008; Martin, 2006).
4. Enterprise core values
In society, values help to define people’s “core” feeling and related thinking: what they
love, hate, or are just indifferent to (Hunt et al., 1989). In an enterprise, values serve to
Enterprise
ethical behaviour
21
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22
convey a sense of identity to its members, enhance the stability of its social system,
direct a manager’s attention to important issues, guide subsequent decisions by
managers, and facilitate commitment to something larger than self (Deal and Kennedy,
1982). Enterprises show that values of society influence enterprise values and the other
way around (Potočan et al., 2008).
Hood (2003) argues that ethical orientation of an enterprise is revealed through the
formal and explicit activities of business life on a daily basis. The basis of these
activities is outlined by enterprise’s accepted procedures and policies. A formal
statement of the enterprise’s ethical stance is a means through which the values and
ethical orientation of the enterprise are transmitted to employees. In author’s findings,
values are the point at which the individual intersects with society (Grunert and
Scherborn, 1990). Hood (2003) classifies values in terminal values (desirable end-states
of existence) and instrumental values (modes of behaviour or means of achieving the
desirable end-states). He divides terminal values further into social and personal values
on one hand, where on the other hand instrumental values further fall into
morality-based and competency-based values. Social values include items such as
freedom, equality and world at peace, while morality-based values include items such
as politeness, helpfulness, affection and forgiveness. Personal values include factors
such as self-respect, broadmindness, and courage, and competency-base values include
items such as logic and competence. Hood (2003) defends the opinion that enterprise
success can be controlled and focused by maintaining and examining the enterprise’s
ethical orientation through creating the underlying enterprise’s values. Further,
Hemingway and Maclagan (2004) prove that enterprises’ ethical behaviour depends on
formal adoption and implementation of enterprises’ ethical programmes, which can be
considered as the result of and associated with the changing values of individual
managers.
In the context of enterprise ethics, it is very important that organizations provide a
modern moral environment for employees. Various authors (Knights and O’Leary,
2006; Molyneaux, 2003; Morrison, 2001) developed the term ethical leadership:
development of a specific value or set of values is important for enterprise’s success
including integrity, prudence, courage, temperance and justice. Morris et al. (2002)
argues that core values of every organization need to reflect their ethical content.
Thommen (2003) proposed the categorization into three dimensions of an enterprise’s
credibility (responsible, communicative and innovative behaviour) considered as the
“highest” value. Marrewijk (2004) finds that for the enterprise’s success the enterprise’s
core values including order, success, community and synergy are relevant. These four
core value systems have further strong relation with enterprise culture and enterprise
climate. About ethical leadership and organizations read McCann and Holt (2009).
Garciá-Marzá (2005) argues that there are interests common to all stakeholders,
which in order to be satisfied demand a specific orientation in management decisions
and actions. Considering this, the author proposes basic or core values that represent
the corporate constitutional framework, responsible for establishing the basic rules for
subsequent definition of relationships and strategies among various groups (enterprise
stakeholders). In his opinion, if we eliminate any of these values, a dialogue will no
longer represent a process of reaching agreement but will become a mere strategy or
compromise, where the final outcome is decided by the more powerful side. So-called
ethical core values (Garciá-Marzá, 2005; Hunt et al., 1989) help to establish and
maintain the standards that delineate the “right” things to do from the things “worth
doing” and from other types of behaviour. The right ethical values influence
individual’s choices and lead to actions which every organization supports.
Some authors (Garciá-Marzá, 2005; Hunt et al., 1989; Brown, 1999) believe that when
the (modern) ethical values of an enterprise are widely shared among its members, the
enterprise’s success will be enhanced.
Enterprise
ethical behaviour
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23
5. Enterprise culture
Enterprise/corporate culture is a multifaceted construct. Various authors define it
differently. Goffman (in Brown, 1999) focused on the observed behavioural regularities
in people’s interactions, Homans (in Huczynski and Buchanan, 2007) discussed the
norms that evolve in working groups, Ouchi (2007) stressed the philosophy that
influences organizational policy and van Maaren (in Huczynski and Buchanan, 2007)
emphasized the rules for good understanding in an organization. More recently,
enterprise/corporate culture has been defined as encompassing the assumptions,
beliefs, goals, knowledge and values that are shared by organizational members
(Belak, 2003; Deal and Kennedy, 1982; Huczynski and Buchanan, 2007; Ouchi, 2007;
Schein, 1983, 1985, 1992; Schwartz and Davis, 1981).
Various types of enterprise/corporate cultures have been identified – related to the
dynamic nature of the industry concerned (Gordon and DiTomaso, 1992) and to the size
of the organization (Gray, 2003). Several classifications have been proposed, the most
often cited being those of Schwartz and Davis (1981), Deal and Kennedy (1982),
Hofstede (1990, 1998a, b, 2000), Schein (1983, 1985, 1992), Sathe (1984) and Cameron
and Quinn (1999). Hofstede (1983) proposed that enterprise culture could be classified
by comparing the degree of individualism versus collectivism, the apparent
power-distance metric, the tendency towards uncertainty avoidance, and the bias
between masculinity and femininity. Kets De Vries (in Huczynski and Buchanan, 2007),
on the other hand, opted to derive his classification from characteristics of the
prevailing mentality: a paranoid culture (a persecutory theme), an avoidance culture
(a pervasive sense of futility), a charismatic culture (everything evolves around
the leader), a bureaucratic culture (depersonalized and rigid), politicized culture
(leadership responsibility is abdicated).
In Thommen’s (2003) opinion, an enterprise should emphasize its culture as much as
to bring it into accordance with the enterprise’s vision and strategy. Thommen (2002)
differentiates between strong and weak enterprise cultures. An enterprise with a
strong culture is the one with a high level of values and high-norms anchoring, a high
level of agreement, as well as high-culture compatibility between enterprise and the
environment of its functioning.
6. Ethical climate
Ethical climate concepts remain popular as a means of understanding the
right-brain-based ethical atmosphere in enterprises. For the purpose of our
discussion, we will use ethical climates as identified by Victor and Cullen (1988). In
their opinion, an institutional normative system can be considered as an element of
culture, although enterprise culture is more comprehensive and includes the patterns of
behaviour, artefacts, ceremonies and special language. Observers of organizational
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24
ethical climate discuss only those organizational norms that concern practices and
procedures with ethical consequences in only a segment of their organizational culture.
Victor and Cullen (1988) describe the enterprise climate as perceptions that
“are psychologically meaningful moral descriptions that people can agree characterize
a system’s practices and procedures”. Further on, the authors argue that the prevailing
perceptions of typical organizational practices and procedures that have ethical
content constitute the ethical work climate. In their opinion, ethical climate is
conceptualized as a general and pervasive characteristic of an organization, affecting a
broad range of decisions. Ethical climate therefore “informs”/influences members of
the organization what one can do and what one ought to do regarding the treatment of
others. The authors believe that climate types represent perceived norms of an
organization or group with an ethical basis. The critical impact of leadership on ethical
climate and employee behaviour is argued in a research by Mulki et al. (2009). The
importance of enterprise ethical climate and the change of ethical climate over the
enterprise life cycle stage is argued in a research by Belak and Mulej (2009).
7. Informal and formal measures of business ethics implementation
Informal measures play an important role in the socialization process, in which “other
employees” or people, co-workers, etc. play a major role as “sources of, or references
for” ways of thinking, feeling, perceiving, and evaluating, and as an audience which
may be physically present or absent in any interaction, but towards which actors
orientate their conduct (Casell et al., 1997). Mechanisms of informal control may include
a social dimension through which superiors regulate the behaviour of subordinates, or
employees regulate the behaviour of their peers through daily interaction in
compliance with the enterprise’s norms or values. Adam and Moore (2004) argue that
informal measures such as the social norms of the enterprise may reflect the
enterprise’s values and rules of ethics. Enterprise members may be coerced by other
group members, peers or superiors, to conform to the social norms. If not, they risk
disapproval, or even rejection. In such a way, the social group exerts pressure on the
individual to conform to the norms – but only to a limit. Different relationships
(e.g. between co-workers, superior versus team, superiors and subordinates, etc.) may
develop in the frame of non-formal meetings such as coffee breaks, lunches, sport, etc.
We can see that informal social norms play a crucial role in forming the enterprise’s
social order (Adam and Moore, 2004).
On the other hand, managers have a strong impact on the behaviour of their
employees. This informal measure is labelled “the example set by the manager”, which
is part of the formation of manager-subordinate relationships. The example set by the
manager may be the tool advocated by the enterprise philosophy. “The role model” is
also one of the roles that managers are expected to perform, since they can set the
example for “proper and desirable behaviour” for their employee to imitate. Some of the
informal measures of enterprise ethics implementation are shown in Figure 1.
According to Adam and Moore (2004), the enterprise can employ diverse
mechanisms of control, ranging from documents that specify the ethical code of
conduct, and are used in the course of training; through the evaluation of employees’
performance; up to enforcement procedures. Some controls (e.g. those used in selection
and recruitment routines) appear early in the process of evaluating candidate’s actions
and attitudes. The three routines of formal measures (recruitment, selection and
Informal measures of
business ethics
implementation
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Formal measures of
business ethics
implementation
Enterprise
ethical behaviour
- Manager concern/role modelling
- Candid ethical communication
between managers and employees
- Ethics as a topic of employees
conversation
- Communication of stories about
ethical employees
- Institutional measures
- Human resource measures
- Structural measures
-
Vision
Core values statement
Mission statement
Code of ethics
Compliance manual
Business ethics standards
and indexes
- Membership in various
associations and networks
concerning ethics
25
- Job descriptions
- Comprehensive criteria for
selection of employees
- Ethics training and education
- Evaluation of employees
ethical behaviour
- Whistle blowing
- Anonymous ethics telephone
- Reward and penalty system
-
Ethics committee
Consulting service
Ombudsman
Ethics advocate
Ethics audit in enterprise
Influencing and co-creating
the legislation to the topic of
enterprise ethics
Source: Derived from Belak (2009, p. 39)
training) are very important in the process of employee socialization, which takes place
in the first year of their membership in the organization (Adam and Moore, 2004). The
importance of formal measures of business ethics implementation is supported also by
Sims and Keon (1999) who argue that such measures are important forms of
communicating enterprise’s expectations concerning employee decision making. This
high importance is ascribed to the formal measures of business ethics implementation
especially due to the researches on correlation between formal measures and
performance (Morris, 1997; Verschoor, 1998; Ye, 2000; Fang, 2006); they revealed that
enterprises with well developed formal measures of ethics implementation recorded
better performances.
The enterprises that stress ethics have better images and reputation and yield
higher long-term interests. The researches showed that employees’ ethical awareness
and decision-making intent influence the company performance, while in the absence
Figure 1.
Measures of business
ethics implementation
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26
of “official” ethics, individuals tend to promote their self-interests at the expense of
others in the enterprise when resources are unevenly distributed. Some of the formal
measures of business ethics implementation are also shown in Figure 1.
Figure 2 shows the constitutional elements and measures of the requisitely holistic
enterprise ethics implementation. In order to behave ethically, the enterprise must
“posses” ethical core values, culture and ethical climate defined as the enterprise ethics’
“constitutional elements”; the enterprise must dispose with informal and formal
measures of enterprise ethics implementation too. We argue that the achievement of
these “conditions” should not be regarded as a result of a mere incident but should
result from the requisitely holistic planning of core values, culture and ethical climate
as well as of informal and formal measures. The concept of the requisitely holistic
planning is discussed in the next chapter.
Enterprise environment
Enterprise
Enterprise
ethical climate
Enterprise
ethical core
values
Informal measures of
business ethics
implementation
Figure 2.
Constitutional elements
and measures of holistic
enterprise ethics
implementation
Enterprise
culture
Formal measures of
business ethics
implementation
Enterprise ethical behaviour
Source: Derived from Belak (2009, p. 38)
Enterprise ethics
constitutional
elements
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8. Planning of core values, culture, climate and informal as well as formal
measures of business ethics
Mulej and Kajzer (1998) introduced the distinction among fictitious, requisite and real,
i.e. total holism. Very few practices in nature, production, etc. are simple enough to be
well understood and mastered with a single viewpoint/profession/interest. Normal
events, natural, entrepreneurial, social and other processes need a synergetic network
of viewpoints to be so; if the latter include all crucial and only crucial viewpoints, one
attain the “dialectical system” and hence the requisite holism. It enables work without
crucial oversight and without avoidable effort. The real, i.e. total holism includes
totally all attributes, that can be perceived if totally all viewpoints, their relations and
resulting synergies are considered; this level of holism normally reaches beyond
human natural capacities. The latter fact is the basis for humans professional,
geographical, biological, etc. specialization that allows for deep enough individual
insight into a single part of the existing reality on one hand, and requires
interdisciplinary creative cooperation of mutually different specialists on the other
hand. Every planning must consider this natural law in order to not commit crucial
oversights and resulting failures all way to nature destruction and world wars.
Thommen (2003) pointed out that an enterprise’s ethical behaviour can be achieved
only by complete enterprise conversion. We argue that this conversion should take
place at all hierarchical levels of the enterprise’s management and governance process.
Based on the concepts of integral management (Belak, 2003; Bleicher, 2004) these levels
are the political or normative one, strategic and tactical/operative (or operational)
management level as shown in Figure 3.
The idea of an ethical enterprise strongly depends on enterprise’s key stakeholders
– owners and top management. It embraces the activities of ethics and credibility
initiation in an enterprise’s vision, enterprise’s policy (defined by Belak (2002, 2003) as
the mission, purposes and fundamental goals), strategy, and finally in the processes
and structures needed for the realization of this idea. The process of the development
and realization of ideas is based on Kajzer’s basic concept of transforming ideas into
realization (shown in Figure 4).
Planning, organizing, directing and controlling are defined as the basic functions of
governance and management process (Belak, 2002). They are of the great importance
in the whole process of the realization of the idea of an ethical enterprise. In this
contribution, we limit our discussion to the function of planning of the holistic
enterprise ethics. First, the idea of an ethical and credible enterprise should be
manifested by the enterprise owners in its policy that is based on the vision of an
ethical enterprise as shown in Figure 5. Its mission, purposes and fundamental goals
should be defined in accordance with its vision to be an ethical and credible enterprise.
According to Bleicher (1994), the vision of such an enterprise must be supported by the
enterprise’s responsible policy and philosophy. We should emphasize that the
enterprise’s policy strongly depend on the enterprise owners’ (and top managers’)
values and norms, which are expressed by enterprise culture (Rüegg-Stürm, 2002;
Belak and Duh, 2004). Stated policy strongly influence manager’s decisions on whether
to act ethically or unethically and affects the enterprise’s ethical climate (Schweper
et al., 1997).
At the strategic management level the process of planning the strategies and the
strategic allocation of resources take place for realizing the vision, mission and goals of
Enterprise
ethical behaviour
27
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Enterprise environment
Enterprise
Visionof ethical enterprise
Internal and external stakeholders' interests in ethical
enterprise
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Figure 3.
Framework of holistic
enterprise ethics
implementation
Political level
Top management
Strategic management
level
Middle and first
line management
Operational management
level (tactical and
operative)
Experts and other
co-workers
Fundamental (basic) – realization
process
Source: Derived from Belak (2002, p. 40)
Ideas
Figure 4.
From development to
realization of ideas
Owners
Enterprise ethics implementation
Governance and management process
28
Vision
and
policy
Source: Kajzer (1997, p. 144)
Strategies
Processes
and
structures
Realization
Enterprise
ethical behaviour
Requisitely holistic planning
of enterprise ethics
As an institution
As a process
Owners/shareholders
Planning of enterprise
vision, mission,
purposes and
fundamental goals
Business policy
planning methods
Strategic management
level
Top managers
Planning of strategies,
allocation of resources
and ethics program
Planning methods of
strategies
Operational
management level
(tactical and operative)
Middle and first-line
managers
Planning the
implementation of
ethics program
Planning methods at
the operational level
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Political/normative level
As an instrument
29
Enterprise ethical behaviour
Governance and
management process
Fundamental (basic) – realization process
becoming an ethical enterprise. The enterprise top management holds the main
responsibility for making decisions on strategies and strategic allocation of resources
(as shown in Figure 5). It is top management’s responsibility to find the most
appropriate strategy for realization of the vision, mission and goals to be an ethical
enterprise.
This leads us to the question of corporate governance and different value
perspectives (shareholder and stakeholder value perspectives). We could argue that
both perspectives are at some point correct. The enterprise’s long-term success
depends on the successful harmonization of the stakeholders’ interests (Orlikof and
Totten, 2004). If the enterprise’s vision and enterprise’s policy, influenced and created
by the owners, are not in the interest of all stakeholders, the latter will simply not
participate in the future business activities. Therefore, it is in the owners’ main interest
to consider the interests of all stakeholders, which would consequently result in the
enterprise’s ethical behaviour.
For successful implementation of strategies, it is of great importance to develop an
ethics program by defining the activities and the responsible performers as well as
needed resources of these activities for successful implementation of such program.
The purpose of such ethics program is to make strategies action oriented. The
responsibility of implementation of such ethics program lies also at the operational
management level (as shown in Figure 5).
In order to successfully realize the planning process at all hierarchical levels
adequate planning instruments should be developed among which especially planning
methods are of great importance (compare with Belak, 2002, 2003). Whether these
should be completely new methods or some of the existing methods could be adopted
(proposed by different authors, e.g. Bleicher (2004), David (2008), Hinterhuber (2004),
Kajzer et al. (2008) and Wheelen and Hunger (2009a, b)) should be theoretically as
well as empirically studied in the future. The institutional dimension within the
Figure 5.
The concept of the
requisitely holistic
planning of constitutional
elements and
implementation measures
of enterprise ethics
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K
39,1
proposed concept of holistic planning model describe the responsibilities of different
stakeholders within the enterprise (that is owners and managers) regarding decision
making in the planning process as well as experts and other co-workers that are in
accordance with enterprise owners and managers responsible for enterprise ethical
implementation and behaviour.
30
9. Conclusions
To achieve the optimal effectiveness level of business by ethical behaviour, the
initiated measures of business ethics should never be implemented as isolated tools,
but only in the frame of a full and complete ethics program (Thommen, 2003). The
initiated business ethics measures have to be correctly adjusted and coordinated, as
well as integrated, in a common business ethics concept, program or plan. An
enterprise’s top management can be considered as the “agent” responsible for
harmonization of stakeholders’ interests (as well as different cultures); therefore we
argue that formulation and implementation of an ethics program strongly depend on
top management. In our opinion, the top management can also be considered as the
executor of the enterprise’s culture (values and norms initiated by the enterprise
owners), which represents one of the most important elements in the context of an
enterprise’s ethical behaviour.
For successful implementation of the ethics program or plan, it is important that it is
internalized by all (especially internal) stakeholders within the enterprise (owners,
managers on all management levels, experts and all other co-workers). We have shown
that credibility and ethical behaviour of an enterprise can be achieved only through
requisitely holistic enterprise planning (as shown in Figures 2, 3 and 5). It should be
implemented from top to bottom, starting with the enterprise owners’ values that
influence enterprise’s vision and enterprise’s policy (Thommen, 2003) and to the
fundamental (basic) – realization process and in all of its own pore incorporated also in
enterprise environment. One of the important argumentation of the present paper is
also that the proposed concept of the requisitely holistic planning of constitutional
elements and implementation measures of enterprise ethics has a major impact to the
environment of an enterprise functioning and vice versa.
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About the authors
Jernej Belak, born on 7 December 1976, in Maribor, Slovenia, is an Assistant at the Department
for Strategic Management and Enterprise Policy at the Faculty of Economics and Business,
University of Maribor, Slovenia. He is also a Director of non-profit institution MER Evrocenter
for Management and Development. In his Master’s and Doctoral dissertations, he dealt with the
problems of business ethics and its implementation. Embracing this topic, he published several
articles and attended various scientific conferences. Jernej Belak is the corresponding author and
can be contacted at: [email protected]
Mojca Duh, born on 26 February 1966, is an Assistant Professor of Enterprise’s Policy,
Strategic Management and Business Planning at the Faculty of Economics and Business, the
University of Maribor. She is Head of the Department of Strategic Management and Business
Policy. Her main research interests include particularities of development and management of
family businesses; she published research findings on family Enterprises in numerous research
papers, articles and in the book entitled Family Enterprise: Development and Developmental
Management. She participated with research papers at several national and international
conferences; she is (co)author of scientific and professional articles, and several chapters in
books. She is a member of the research group Global Entrepreneurship Monitor Slovenia and
Slovenian Entrepreneurship Observatory.
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Matjaž Mulej was born on 20 January 1941, in Maribor, Slovenia. He is married and has two
adult children living healthy in Maribor, Slovenia. He was retired from the School of Business
and Economics, University of Maribor, Maribor, as a Professor Emeritus of Systems and
Innovation Theory. He has 1,100 publications in 40þ countries (see: IZUM – Cobiss, 08082). He
was a Visiting Professor abroad for 15 semesters. He was an author of the dialectical systems
theory (see: François, 2004, International Encyclopedia, etc.) and Innovative Business Paradigm
for catching-up countries. He was a Member of New York Academy of Sciences (1996), European
Academy of Sciences and Arts in Salzburg (2004), European Academy of Arts, Sciences and
Humanities in Paris (2004). He was a President of the International Federation for Systems
Research (with 35 member associations). He did his MA in Development Economics; Doctorates
in Systems Theory and in Management.
Tjaša Štrukelj, born on 16 May 1971 in Maribor, Slovenia; is a Senior Lecturer for Business
Policy, Strategic Management, Enterprise Culture and Ethics, and Business Planning at the
Faculty of Economics and Business, Department of Strategic Management and Business Policy,
University of Maribor, Maribor, Slovenia. Her postgraduate education includes titles Master of
Science (of University Maribor, Slovenia) and KMU – Diplom HSG (SME Intensive Study
Program of University St Gallen, Switzerland). She prepares doctoral thesis (dissertation) on
subject Innovation of Business Policy Planning and publishes in field of her research. She does
also advisory work in business praxis, is a member of editorial board of MER Journal for
Management and Development, Slovenia (1999-), a member of SME Intensive Study Program
Graduate Association of University St Gallen, Switzerland (1998-), a member of IMTA –
International Management Teachers Academy Alumni Association of IEDC – Bled School of
Management, Slovenia (of CEEMAN – Central and East European Management Development
Association) (2006-), and a member of IRDO – Institute for Development of Social Responsibility,
Maribor, Slovenia (2009-).
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