Ethics And The Business Professional – Term Paper

AIG Insurance

List an ethically decoupled organization and an ethically transformed organization. Explain your choices. Comment on the choices of your classmates.

 AIG insurance is one of the ethically decoupled organizations considering its financial scandals of 2008. AIG insurance is an ethically decoupled organization because it only settled for the superficial ethical measures without any major ethical strategy that can help it comply with the legal requirements. Even though it has its formal codes and policies, AIG insurance had no ethical officers to reinforce its moral codes. Its ethical codes have been disconnected or decoupled from its policies and company’s decisions (Phillips, 2005).

It is also an ethically decoupled organization because use ethics as a means to an end. They only practice ethics because they believe that by being ethical, their company’s positive public image would lead to profits. Additionally, AIG insurance ensures that its practices are ethical and legal. AIG insurance takes a proactive approach to ethical practices because unethical practices might lead to AIG insurance’s downfall.

AIG insurance’s main guiding principles include rules, penalties, and rewards. The employees are only ethical because they fear that penalties associated with unethical behaviors. The employees obey the company’s rules as they strive to ensure that they do not break any of the rules. The company is highly sensitive to any potential moral issues to the extent that any employee whose behavior is likely to compromise the company;s positive image is sacked immediately (Phillips, 2005).

The company is known for its general lack of awareness of the ethical issues and its ethical duties to the community, the employees, and itself. The company has never taken an opportunity to formulate an ethical policy but mainly relies on rules and penalties to guide its employee. Finally, AIG insurance is ethically decoupled because it does not discuss moral behaviors, or enforce the use of moral vocabulary. The employee;s behaviors are only evaluated regarding the rules and penalties. Any conduct that is not prohibited by AIG insurance rules is right by the business rules. Ethically decoupled organizations such as this are mainly profit driven and have the potential to trample employee rights, breach their personal space, and employ unethical group’s processes so long as AIG insurance’s profit goals are met.

Ethically Transformed Organization: General Electric

General Electric is one of the leading American conglomerate companies with offices worldwide. General Electric is an ethically transformed organization because it does not respond to react to unethical behaviors but approaches ethical issues proactively (Johnson, 2015). General Electric does not only meet the basic legal requirements but strives to exceed the legal requirements always to stay safe (Phillips, 2005).

General Electric has an established framework for dealing with ethical and moral dilemmas instead of solving moral dilemmas when they occur; General Electric works on preventing the moral dilemmas from occurring (Johnson, 2015).

General Electric’s employees follow the shared values, corporate culture and focus on meeting their ethical responsibilities. General Electric cultures involve punishing misbehavers within General Electric because it has established high moral standards for the employees. Finally, the employees have work teams that are driven by team chemistry, ethical values, well-defined ethical processes, and standards (Johnson, 2015). All employees are taught on how to make moral choices when faced with an ethical dilemma. The main ethics driver is the CEO who discusses ethical issues with middle-level managers and makes ethics a priority within General Electric 

References

Johnson, C. (2015). Organizational Ethics: A Practical Approach (3rd ed.). New Yor: SAGE Publications.

Phillips, R. (2005). Stakeholder theory and organizational ethics (1st ed.). San Francisco: Berren- Koehler Publishers Inc.