Answer to Question #294717 in Management for aloha

Question

To get permits and licenses renewed on time, Company Y availed the services of fixers to do transactions in some government offices for the speedy renewal of permits and licenses. Extra money is paid then. What business ethics issue is presented? What can be done?

Answer 1

Transparency and Integrity.

By seeking the services of the fixers company Y failed to demonstrate integrity and transparency which is essential in business. Transparency in business is the basis for trust between a firm and its stakeholders i.e., customers, partners, and employees. Being transparent means being honest and true when communicating with stakeholders regarding the affairs of business. Transparency in business can be many different forms depending on the nature of the communication and which stakeholders are involved, but the core objective is always the same: to establish trust and goodwill by building and preserving the firm’s reputation for openness and honesty in its business dealings.

Some examples of transparency in business can include:

• Transparency with Investors and Shareholders – Investors think about transparency in terms of how readily they can access financial information about a company, including its price levels and audited financial reports. Investors must be able to trust that your organization produces financial reports that are informative, accurate, and independently audited.
• Transparency with Customers – Customers want to see transparency from the businesses where they choose to spend their money. To achieve transparency with its customers, businesses should respond to customer inquiries and feedback in an honest and timely fashion, and increase the accessibility of information about their products and services. Transparency also means admitting to mistakes instead of trying to cover them up, and working to make things right with customers. When executed well, transparency with customers results in elevated brand loyalty, increased sales, and stronger employee satisfaction.
• Transparency in the Supply Chain – Transparency between an organization and its vendors and suppliers is essential for ensuring a productive ongoing relationship. An organization may cease doing business with a supplier who fails to honestly communicate about the sources of its materials or labor. Supply chains are increasingly being scrutinized by governments, consumers, and NGOs who are concerned about ethical sourcing of labor and materials.
• Transparency with Employees – Transparency with employees is centered around honest, two-way communications between employees of the business and their managers. This can include transparent discussions about business goals and objectives, challenges, employee performance, and other work-related issues.

Benefits of transparency

The primary benefit of transparency in business is that it produces trust and goodwill while safeguarding the firm’s reputation among investors, partners, employees, customers, and other stakeholders. Other benefits of transparency in business include:

• Increasing employee morale
• Boosting employee engagement and retention
• Demonstrating stability and encouraging investment
• Leveraging honest feedback to improve processes and drive results
• Demonstrating integrity and ethical behavior

 

Reference.

Byars, S., & Stanberry, K. (2018). Business Ethics. OpenStax.

Rowe, C., Slutzky, R., & Hoesli, B. (1997). Transparency. Birkhäuser Verlag.