ETHICS & BUSINESS

OPERATIONS

Tehzeeb Sakina Amir

Business Ethics session 6

Operations management
Operations management is one of the three major
functions of any organization along with marketing
and finance.
The operations function is comprised of a significant
percentage of all employees and physical assets in
most organizations (Thomas, 2005).
Operations management determines what should go
into an operating system such as equipment, labor,
tools, facilities, materials, energy, and information
and how these inputs can be used best to obtain and
satisfy the requirements of the market place.

Operations Management
The design, operation, and improvement
of the production system that creates
the firm's primary products and services
Chase, Jacobs & Aquilano (2006) state
"operations management is about
getting the day-to-day work done
quickly, efficiently, without errors, and at
low cost".

Operations Managers
Operations managers facilitate the
necessary change to an organization
by setting the strategic direction,
deciding what technologies to use,
and where facilities should be
located. Operations managers are
experts ensuring the daily work is
being done quickly, efficiently,
without errors and at a low cost
(Chase, Jacobs, and Aquilano, 2006).

Activities of OM
1.
2.
3.
4.
5.
6.
7.
8.

Managing purchases
Inventory control
Storage
Logistics
Scheduling
Evaluation
Quality
Effectiveness and efficiency of internal
processes

Significance of OM
Foreign competition
Shorter product and service lifecycles
Better-educated and qualityconscious consumers
New technology

Strategies - OM
Organizations implement strategies to
better manage their operations, by:

Focusing on improving quality

Managing capacity
Driving down costs
Improving efficiency
Reducing waste
Motivating employees to perform at a higher
standard

These strategies all correlate to one primary

objective - making more money.
AND Whenever money is involved, the ethics and
integrity of the people involved will be tested.

 Ethical concerns in operations:

Earnings, Transparency and
Management
Workplace Safety and
Environmental Issues
Plant Closure & Downsizing
Purchasing: conflicts and bribery

Operations management
Dilemmas
Waste dumping
On a midnight shift, a botched solution of sodium cyanide, a
reactant in an organic synthesis, is temporarily stored in
drums for reprocessing. Two weeks later, the day shift
foreman cannot find the drums. Roy, the plant manager,
finds out that the batch had been illegally dumped into the
sanitary sewer. He severely disciplines the night shift
foreman. Upon making discrete inquiries, he finds out that
no apparent harm has resulted from the dumping. (Martin
and Schinzinger, pg 32)
Should Roy inform government authorities, as is required by
law in this kind of situation?

Being Ethical in Operations Management

Efficiency.
Transparency.
Honesty.
Integrity.
Commitment.
Accountability.
Loyalty.

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Being Ethical in Operations Management

EFFICIENCY
Employees need to be sure of what is expected of them. [Familiarize
themselves with and abide by all statutory and other (lawful) instructions
applicable to their duties.
Full cooperation with one another to advance the public interest.
Execute all official instructions.

TRANSPARENCY
In carrying out official duties, make fair decisions and clear with their co
workers and carrying out the orders.

HONESTY
Honest in carrying out their duties and processes.

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Being Ethical in Operations Management

INTEGRITY
No improper use or disclosure of official information.
Refrain from favoritism and abuse of authority.
Rescue him/herself from decision-making processes that are likely to
result in or be construed as improper personal gain and this should be
properly declared
Not to request, negotiate for or accept any interests, gifts or employment
in violation of the framework.
COMMITMENT
Should show courtesy in the execution of duties (politeness, helpfulness
and reasonably accessible).
Treat members as customers who deserve quality services.
Take initiative in doing the work.
Show dedication.
No engagement in any transaction or action that is in conflict with or
infringes on the execution of his her official duties

Being Ethical in Operations Management

ACCOUNTABILITY
Strives to achieve the objectives of the institution in a cost effective and
efficient manner.
Be honest and accountable in dealing with funds.
Be punctual in the execution of duties (strive to meet deadlines).
Be professional.
LOYALTY
Employees are expected to execute government policies in a dedicated,
skillful and faithful manner.

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Exhibit 4.1: Areas of Ethical and Social

Responsibility Concerns for the Multinational
Company

Exhibit 4.1: Areas of Ethical and Social

Responsibility Concerns for the Multinational
Company