Ethics and Social Responsibility although different in definition, are equally important to an organization in developing a viable strategic plan. The plan is vitally important to the success of the organization; the key variable in developing a strategy with potential success is the consideration of how the strategic plan affects stakeholders. This brief ethics and social responsibility essay highlights ethics and social responsibilities role in developing the strategic plan, offers an example of an organization behaving unethically, and shares measures to prevent these types of situations.
Management in every organization bears the responsibility to safeguard the possible influence that strategic decisions have on its stakeholders. The list of stakeholders goes well beyond employees of the company. Stakeholders include the customers, suppliers, the community, and every entity that gains affect from the actions of the organization. Organizations that demonstrate social responsibility, establish equal treatment among its stakeholders, and from a broader viewpoint, management carefully considers the environment and social effect of calculated accomplishments (Abdullah, 2013).
To assist management in making better decisions, it is imperative that transparency and divulgence of truthful information to the shareholders is normal practice to facilitate open and constructive dialogue and arguments. This form of exposed discussion propels the organization forward, and helps detect possible threats, and develop alternate solutions. Additional benefits of transparency include improvements to the company image and credibility with shareholder external to the organization, which demonstrates the organizations commitment to social responsibility. Constructive team meetings offer the chance for the management group to bring up concerns and collaborate on new ideas born from independent thoughts, shared with absence of fear of reprisal. This forum of open dialogue and mutual respect sharpens the team’s decision-making ability, improves the bond between the team members, and fortifies the strategic planning process (Abdullah, 2013). Management is responsible to ensure a fair-minded and straightforward expression of the conceivable risks and effects to stakeholders and society as a whole, and garner thorough consideration during the strategic planning process.
Martha Stewarts Insider trading
Martha Stewart is president, chairperson, and chief executive officer (CEO) of Martha Stewart Living Omnimedia (MSO) listed on the New York stock Exchange (NYSE). She acted unethically in 2001 in performance of her duties as head of her company, when she sold 3,928 shares of ImClone stock. Selling stock is a common occurrence in the United States, the dilemma that plagued Martha was her insider knowledge of a Food and Drug Administration (FDA) disapproval of her company’s anti-cancer drug Erbitux (Pollack, 2002). By selling off stock ahead of the FDA announcement, Martha profited $45,000 more than, if she had sold it later. Although Martha Stewart denied possessing insider knowledge but professed that the stock sale occurred because of a stop loss policy she enacted to protect against the stock price dropping below $60 per share.
Martha Stewart later was indicted on obstruction