Running head: PHILOSOPHY

Case Study Analysis of Personal and Organizational Ethics and Values between For-Profit and Not-for-Profit Organizations Veronica Underwood Debrian Hughes September 24, 2012

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A moral philosophy, or in other words ethics is one of the most important and necessary parts of a well-being for-profit and not-for-profit organizational strategies which formulates the basis of an appropriate moral atmosphere within a business. Nowadays I may observe that not many companies are following the code of practice they made for their stuff, not many of them are really looking at the personal profiles of their employees for defining and analyzing their moral qualities and values before they enter a workplace. They do have the well-defined rules but they don't follow them the way it is meant to be. That is why many unpleasant situations happen in an employees team and in business itself. My purpose is to find out the exact reasons of moral failures and wrong behaviour in organizations and offer logical tentative solutions in terms of the analysis of differences and similarities in ethical perspectives between three entities which are personal, not-profit and for-profit.

PHILOSOPHY Introduction

A personal code of moral qualities and values is a set of characteristics that defines a person's behaviour in a real world, that is a theory becoming a practice. Depending on the situation a person is in, he is acting accordingly. My analysis comes out here on two ways: the first one is about a person behaviour out of business (a daily life, family and friends relations etc.), and the second one is about being in a workplace, being as a part of a bigger mechanism. Before I will start to analyze and discuss an ethical behaviour in business, at first it is important to look at and see our own self. I can see myself as an honest, open-minded, communicative and serious person who is ready to help. Sometimes it can't be seen from the side of the people who surround me, and at this point they may be right. I may seem strong but in fact I am not. When difficult situations take place, I am the one to help and give an advice to every single person who is in need. But I perform this quality of mine only when I see that my help is really needed. Otherwise I do not involve myself, especially when I see that a person can do it himself with no problem. I am sure that nothing is happening by accident. There is a reason for everything, thats why I am the one who is always analyzing the events, things and behaviour trying to find out what the reason is. At my workplace I try to come out with an understanding of people I am working with though sometimes someone's behaviour makes me irritated. Anyway I try not to critisize or react abnormally. In the future I am planning to open up my own place of business focused on marketing and support my family in loving and caring way.

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Talking about a morality in any kind of company, for-profit or not-for-profit, I have to state that every single of them has ethical problems and issues within but the truth is that they are not at the same level. One of the giants in the beauty business industry in the United States is Avon Corporation. It has several branches developed that do business in different areas and pursue different aims. Avon Foundation for women is a bright example of not-for-profit company. Its activity is focused on an improvement of women's lives all around the world, and I must admit they are doing a great job by making it. But is it that smooth inside the team that is running this business? When I say a team, I mean a group of people who are gathered together in one workplace and get one and the same goal that is achieving the best results in existed conditions for business and if to look further, for themselves (Cavico, 2008). But I need to add up one more important stroke to clear up the ethical situation before I state any issues. Every person working for a company is a unique universe with a unique understanding of the things, principles and here we go, a morality in his own way. (Gibson, 2011). This fact makes a great influence on relations inside a group and is the first key problem presented. So, there is a code of conduct which is a must to perform but in view of personal background, moral qualities, level of education and upbringing etc., it is not performed. As a result, an employee behaviour becomes unpredictable and causes unpleasant situations in a business process. People don't follow what they don't understand. Another issue is the conflict of interests when the written code of rules is not acceptable by employee team. The third one in a not-for-profit organization is a possible

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lack of a sponsor support in relation to different charity projects. For example, Avon performs Avon Breast Cancer Crusade, and a mission against domestic violence but the point is that there is a tough competition for donations. Not every potential sponsor would donate any finances into any charity project until it would be clear and understandable that his donations would go directly for this goal, in our case for helping women in a fight with breast cancer. Moreover, we can't forget about such concept as an ethical leadership. Not-forprofit organizations are oriented on a public benefit. So if there is no one on the board of your company to make public trust you, the chain public - your charity company will be broken. Going further, I want to present another branch of Avon Corporation which is running in a for-profit sector. This is Avon Products Inc. Its aim is not focused on a public benefit but on its own. Here I see a little bit different situation from an ethical point of view. The most common key problem for the companies like Avon Products Inc. lies in relations within co-workers. They do not perform the necessary level of a moral behaviour. This is a possibility of failure at any of the stages of a working process system. The second big problem that I found out is the earning interest and trust of customers. You can't perform a good selling if you can't talk, think and behave at the level that your customer accepts and understands (Rachels, 2009). Here is another thing coming out. There may be a conflict of your personal code of morality with the code of you company. It is one more issue that deserves attention and deep analysis.

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Hence, there is a wide range of issues and problems that are present both in a forprofit and not-for profit organizations. Background A not-for-profit organization as for example Avon Foundation was created in 1955 for performing a mission of improving lives of women and their families globally. Later on the company expanded its activity to a health research as a breast cancer and started up a new project dedicated to a care for women who get any kind of domestic violence. Nowadays Avon Foundation company has grown into a large foundation that is focused on the reasons that hurt women most. In 2011 year only, Avon philantropy throughout the world donated around $860 million dollars. The program which is named The speak-out against domestic violence provided around $28 million dollars for the domestic violence causes. The Avon Breast Cancer Crusade started in 1992 in the United Kingdom, is focused on care and research for finding a cure. It performs in more than 50 countries all around the world and in 2011, only in the USA alone, the Avon Breast Cancer Crusade awarded around $740 million dollars worldwide (Avon Foundation, 2012). Since 2001 Avon foundation and Avon Products all together started to answer fast to a national and international emergency and awarded for women that were hurt because of natural disasters more than $23 million dollars. Analyzing the activities of this not-for-profit organization, I have found out that it is really one of the largest donation companies in the world which works on such important questions as care and research for women but there are not enough sponsors to

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support it. The problem lies in a competition for donations. Then, I can't avoid the problem of public trust. How to behave when you are working for public and with public? It is not the same list of ethical rules and norms as it is for non-public goals behaviour. There may be situations when public don't listen to, and don't react on your company actions the way it is expected to because the leader of the company can't make an influence on it. Here is another issue, the issue of trust and respect. It is impossible to perform and cause the right public reaction if you lack some moral qualities that are necessary for a specific activity. Joel Fleishman, the Director of the Heyman Center on Ethnics said: The greatest threat to the not-for-profit sector is the betrayal of public trust, the disappointment of public confidence. We can't forget another important issue as a violation of the company code of conduct which causes conflicts in the team within. How to prevent unappropriate actions of an employee without making any worse to the business itself, especially when the conversation is about a business working with public and for public profit? According to his inner world, an employee may easily break any moral norm established in the company never thinking that it may be right towards his understanding but not right towards a company policy. For instant, he lies and makes other co-workers lie too. All these things happen when at first place the high level of ethics is failed to be shown (Putnam, 2002). Avon Product Inc. is a beauty company working since 1886 in the for-profit sector. It was found by a bookseller David H. McConnell. The Avon concept can be described this way: the company wants to give financial independence to every single woman in the world, so she can support herself, and to satisfy every client with Avon products.

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Avon products are sold directly to the customers in more than 143 countries by 6 million idependent representatives. Every customer can buy it through catalogs, or doing shopping in the malls. In 2010 this company reached the annual sales mark of nearly $11 million dollars worldwide (Avon. The company for women, 2012). Avon is the fifth largest company in a personal care industry, a well-known brand representing care and beauty products. But as I found out, focusing on the personal benefit, not public one as it is with not-for-profit companies, Avon got some important issues as well. For example, its products are oriented mostly on women but here the question comes out: how about men?. So it causes social issue according to the equality of genders. The second thing that I observed is an issue of responsibility. Every single member of this large organization got to work with understanding that she is a representative of the company, in fact its face which means however you act, you must act exactly as it is written in the company code of conduct. Any infraction of the code should be understood as a failure. How a representative sees his responsibility is the way how he is going to perform it. If he fails to sell a product, and he gets a complain from a customer, will he take the responsibility and make necessary steps to improve the situation according to the ethical norms or his own and his company, or he is going to reject it? This is the part of the issue. The same thing happens in a not-for-profit organization when an employee is not following the instructions given him by the leader of the company. Alternatives

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Now, knowing the exact ethical issues existed in a not-for-profit and for-profit organizations, I want to discuss the alternatives which may be possible for the situation described above. At first, we need to realize that it is important to meet ethical norms regardless of a workplace, or a company orientation (for-profit, or not-for-profit). That's why the point here is that a company code of practice to follow is a must of every single imployee. There is two ways to make it happen: the first one is to train an employee before he obtains a position in a company; the second one is to fire him in case he fails to follow instructions after two time warning. The second way is much more severe and strict but has even more sense, especially if talking about not-for-profit organizations which are working with public. Nobody needs a scandal because of misunderstanding, or a failure of any employee (George, 2009). None of these methods is taken to a real life in a clear form neither in a not-forprofit organizations nor in a for-profit one. Training takes time and resources which for the understandable reasons are not given, regardless of a good chance that this is the way that may improve ethical education of a work stuff. To fire an employee is not an option for any businessman these days because at first it is hard to find another one, then he should be trained for giving him a chance to realize what work is expected from him to do at this workplace, to get used to him, to get to know him so he can be trusted. Considering a social issues that are about gender equality, there is a pretty good alternative that lies in erasing this line. For example, Avon Products Inc. can easily make products not only for women but for men as well. That is exactly what the company starts to do.

PHILOSOPHY Proposed Solution

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Every business is opened for making a profit and being a success in the area of its activity. That is the main goal. After analyzing the most common issues that appear in both for-profit and not-for-profit organizations, I came up to a logical conclusion that there is a lot of situations based on ethical failures that are a potential threat for a company. To overcome and improve it, I was working on the appropriate solution for it. Looking at the issue of breaking a code of practice that is absolutely the same in both for- and not-for-profit organizations, I offer to choose from two alternatives the one that I have found more effective for the business and human relations. This is the way of a person training before and in the time of working for a company. It is a thoughtful and realistic solution that can be performed at any company and the one existed that will not hurt either business or employee. Such strategy is working good at for example Avon corporation. There is A Code of Business Conduct & Ethics in there. The Avon policies are explained and accepted by every single employee working for Avon, and as we look at the company's growth and success, it must be admitted that this solution is working, and working fine bringing high results. Of course, some confusions happen but its percentage is low enough to say otherwise. Martin Luther King, American leader of civil rights movement said: The time is always right to do what is right. So when the solution is found out, it is a strong need to release it into a real business world for making a positive difference. Recommendations Not-for-profit organization relations, ethical norms and rules of behaviour are a lot more delicate than for-profit. This difference is explained by the fact that a company

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focused on public profit has a little bit harder obstacle than the one focused on its own profit. Every single word means something. It is more difficult to operate to public than to a single person (Fieser, 2012). That's why the proposed solution described above has to be put into both types of organizations but in a different way. When I am saying a written code of conduct explained to an employee, for notfor-profit company it means explaining every single detail of it, a tough discussion about it, even modelling of some situations that may happen and finding an appropriate way of acting towards company policies because your employee's behaviour defines his focus and his success, that is in fact a company success as well. We need to remember that this is a public business, and it needs a special approach. For for-profit company it is enough to give a simple understanding of the document and explain unclear moments. The best strategy is not only a list of ethical rules that is a must to follow but a leader control and improvement of employee's moral qualities (Boatright, 2008). You can't just give them a paper and tell to follow it, you should make them understand it and make those rules collide with their own ethical education, or smooth it to an appropriate level, so there is not going to be any conflicts between. At the point if it is impossible to make it happen with any member of the team, he should be immediately replaced because his behaviour may cause conflicts within a team, failures and business slow down. Every person working for a company is its part. The objective of a company leader is to find, timprove and make him the best part of the business he is in in the position he is at. Training as a theory and practice is the key solution to the most common stated issue that I analyzed above (Beauchamp, 2008).

PHILOSOPHY Conclusion

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Nowadays a question of ethical and unethical behaviour in and out of business rises up more than ever before, especially in a business area. A human nature is created the way that everyone is looking for his own profit, and this is the moment when he starts to break ethical rules and lose his moral face to reach and get this profit. That's why there appeared a strong need to make a difference in an understanding of ethical basis among employees of companies including those which are focused on their own profit (for-profit business) and public profit (not-for-profit business) using the methods described above.

PHILOSOPHY References

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Putnam. M. S. (2002). Ethical values for business success. Global Ethics University. Available at: <http://www.globalethicsuniversity.com/articles/valuesforsuccess.htm> George R.T.De. (2009). Business ethics. 5th Edition. Prentice Hall. Gibson J. (2011). Organizations: Behavior, Structure, Processes. McGrawHill/Irwin. Cavico F.J. (2008). Business Ethics: The Moral Foundation for Effective Leadership, Management, and Entrepreneurship. Pearson Learning Solutions. Beauchamp T.L. (2008). Ethical Theory and Business. 8th Edition. Pearson. Fieser, J. & Moseley, A. (2012). Introduction to business ethics. San Diego, CA: Bridgepoint Education, Inc. Avon Foundation For Women. (2012). Retrieved. From

<http://www.avonfoundation.org/ > Avon. The company for women. (2012). Retrieved. From <http://www.avon.com/ > Boatright J.R. (2008). Ethics and the Conduct of Business. 6th edition. Prentice Hall. Rachels J. (2009). The Right Thing To Do: Basic Readings in Moral Philosophy. 5th edition. McGraw-Hill Humanities/Social Sciences/Languages.

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