Maintaining Integrity: A Challenge for Businesses in the 21st Century
Maintaining integrity is one of the greatest challenges that businesses are facing in the 21st century. Most companies are experiencing an ethical dilemma related to maintaining corporate integrity. In business, integrity involves strict adherence to moral/ethic codes or a value system. Although nearly all organizations have established a code of ethics and code of practice, the prevalence of corporate misconduct is still notably high. Integrity is essential for the success of a business. Furthermore, studies have shown that higher levels of integrity are attributed to corporate success[1]. Similarly, lack of business integrity has severe consequences such as erosion of trust and bad reputation that negatively affect business performance. Irrespective of severe consequences correlated with lack of integrity, business still experiences challenges in establishing an organizational culture of integrity.
The Importance of Integrity in Business Practices
Normally, business organizations are required to maintain integrity in all their business practices. The management and the employees should ensure that all operations adhere to the established codes of ethics and codes of practice[2]. As a result of increased competition caused by globalization and business internationalization, organizations are continuously striving to develop numerous ways that would enable them to develop a competitive advantage over its competitors. In some instances, some business engages in unethical practices or misconducts in order to establish a competitive edge. The occurrence of corporate misconduct is notably high and occurs in different forms such as corruption, counterfeiting, dishonesty, fraud, discrimination, and extortionate pricing. Turyakira highlighted that “There is increasing pressure on business organizations to behave ethically, in addition to running their operations in the most economical, efficient and effective manner possible to increase performance”[3]. Therefore, business organizations are experiencing challenges related to maintaining integrity and observing the code of ethics while at the same time pursuing activities that would enable them to be more competitive compared to their major competitors.
Honesty and Trust: Critical Components of Integrity
Honesty and trust are critical components of integrity[4]; however, businesses in the 21st century are experiencing challenges in maintaining honesty about their business, services, or products. Corporate organizations experience a dilemma on whether to provide an honest review about their products or services. In some instances, they may lie to customers that their respective products are of superior quality than that of a rival company so as to sell their products. Some organizations also do not offer honest information about their products’ performance: they lie to their clients that their products by satisfying their expectations. According to Clark and Fujimoto, “external business integrity refers to the consistency between a product’s performance and customers’ expectations[5].” Therefore, lying about product performance is an evident case of a lack of business integrity.
The Challenge of Employees' Integrity
In addition to the challenge of maintaining corporate integrity, businesses are also faced with issues related to employees’ integrity. “The integrity of employees is as much a pressing issue today as it was a century ago or will likely be in the next century,” said William Hunsaker[6]. Businesses are experiencing significant challenge in acquiring workers with a high degree of integrity. Lack of integrity among workers also affects the overall level of corporate integrity[7]. In some cases, employees engage in conduct that is contrary to the organization’s code of practice and ethics. For instance, employees who lack integrity may engage in unethical behaviors’ such as theft, corruption, and dishonesty. Such misconducts can lead to financial loss, reputational loss or reduction in productivity or product’s or service’s quality standards[8]. As a result, organizations are striving to establish measures to ensure that their employees observe high levels of integrity. Nonetheless, a lack of integrity among workers is still a significant issue in the corporate world.
The Consequences of Lack of Ethics
Lack of business and employees ethics has severe consequences. Firstly, the lack of integrity leads to the erosion of trust among customers and other stakeholders. “Trust is a prerequisite for building business relationships,” said Sołoducho-Pelc[9]. Thus, without trust, an organization will not be able to establish a fruitful relationship with the clients that would enable it to establish a brand and a competitive advantage. Moreover, the lack of integrity causes an organization to suffer a bad reputation. Consumers love to be associated with an organization with a good reputation[10]. Furthermore, the lack of corporate integrity is attributed to the financial loss either by the loss of market share or non-compliance litigations such as fines for producing counterfeit goods or engaging in corruption. Therefore, it is important for businesses to develop measures that can enable them to overcome the challenge of maintaining integrity.
Conclusion
Based on the analysis, it is clear that maintaining integrity is one the greatest challenges that businesses are facing in the 21st century. Business organizations are experiencing difficulties in upholding integrity and ethical practices in all their daily activities. The intense market competition compels some organizations into engaging in ethical misconducts so as to develop a competitive advantage. For instance, they may produce/supply counterfeit goods or products that do not satisfy consumers’ expectations. Moreover, businesses experience challenge in acquiring and maintaining employees with high levels of integrity. It is also evident that the lack of business integrity has severe consequences such as erosion of trust, reputational loss, and negative financial impacts. Therefore, it is essential for businesses to develop measures that can enable them to overcome the challenge of maintaining integrity.
Bibliography
Arjoon, Surendra. "Virtues, Compliance, and Integrity: A Corporate Governance Perspective." In Handbook of Virtue Ethics in Business and Management, pp. 995-1002. Springer Netherlands, 2017.
Clark, Kim B., and Takahiro Fujimoto. "The power of product integrity." Harvard business review 68, no. 6 (2009): 107-118.
Erhard, Werner, Michael C. Jensen, and Steve Zaffron. "Integrity: A Positive Model that Incorporates the Normative Phenomena of Morality, Ethics, and Legality--Abridged (English Language Version)." (2016).
Hockerts, Kai. "A cognitive perspective on the business case for corporate sustainability." Business Strategy and the Environment 24, no. 2 (2015): 102-122.
Hunsaker, William. "The Integrity of Leaders: Still an Issue for our Day."
Jin, Xiu, Sang-Woo Hahm, and H. W. Park. "The Effect of Employee's Cognition of Leader's A bility, Justice, and Integrity on Organizational Citizenship Behavior: Focusing on the Mediating Effect of Trust in Leader." International Journal of Business Policy and Strate gy Management 3 (2016): 33-40.
Monga, Manjit, and Marc Orlitzky. "The multiple facets of integrity in business and management." In Integrity in business and management, pp. 19-28. Routledge, 2017.
Sołoducho-Pelc, Letycja. "The importance of trust within the organisation for the implementation of the strategic management process." International Journal of Contemporary Management 2017, no. Numer 16 (4) (2018).
Somera, Keya, and M. Kenneth Holt. "Integrity in business: An evaluation of integrity across German and American culture." International Journal of Business and Social Science 6, no. 2 (2015).
Turyakira, Peter K. "Ethical practices of small and medium-sized enterprises in developing countries: Literature analysis." South African Journal of Economic and Management Sciences 21, no. 1 (2018): 1-7.
[1] Arjoon, Surendra. "Virtues, Compliance, and Integrity: A Corporate Governance Perspective." In Handbook of Virtue Ethics in Business and Management, pp. 995-1002. Springer Netherlands, 2017.
[2] Somera, Keya, and M. Kenneth Holt. "Integrity in business: An evaluation of integrity across German and American culture." International Journal of Business and Social Science 6, no. 2 (2015).
[3] Turyakira, Peter K. "Ethical practices of small and medium-sized enterprises in developing countries: Literature analysis." South African Journal of Economic and Management Sciences 21, no. 1 (2018): 1-7.
[4] Monga, Manjit, and Marc Orlitzky. "The multiple facets of integrity in business and management." In Integrity in business and management, pp. 19-28. Routledge, 2017.
[5] Clark, Kim B., and Takahiro Fujimoto. "The power of product integrity." Harvard business review 68, no. 6 (2009): 107-118.
[6] Hunsaker, William. "The Integrity of Leaders: Still an Issue for our Day."
[7]Jin, Xiu, Sang-Woo Hahm, and H. W. Park. "The Effect of Employee's Cognition of Leader's A bility, Justice, and Integrity on Organizational Citizenship Behavior: Focusing on the Mediating Effect of Trust in Leader." International Journal of Business Policy and Strate gy Management 3 (2016): 33-40.
[8] Erhard, Werner, Michael C. Jensen, and Steve Zaffron. "Integrity: A Positive Model that Incorporates the Normative Phenomena of Morality, Ethics, and Legality--Abridged (English Language Version)." (2016).
[9] Sołoducho-Pelc, Letycja. "The importance of trust within the organisation for the implementation of the strategic management process." International Journal of Contemporary Management 2017, no. Numer 16 (4) (2018).
[10] Hockerts, Kai. "A cognitive perspective on the business case for corporate sustainability." Business Strategy and the Environment 24, no. 2 (2015): 102-122.
