Business Ethics – Essay Example
There are three good ways to measure ethical performance in an organizational setting. The purpose of each of these measures is to “determine the wholeness and soundness of the many aspects of a business that enhance ethics and profits without increasing risks” (Ferrell, Fraedrich, Ferrell 239). Outside of the Sarbanes-Oxley Act, which focuses “on questionable accounting and the metrics that destroy shareholder value,” (Ferrell, Fraedrich, Ferrell 238) these methods are Six Sigma, the Balanced Scorecard, and the Triple Bottom Line.
Six Sigma – This system involves defective product creation. Its goal is to “deliver world-class performance, reliability, and value to the end customer.” These goals are accomplished by a system of managing variations from the mean or target product creation ideal (Ferrell, Fraedrich, Ferrell 239).
The Balanced Scorecard – This system uses the companys “vision and strategies” to measure its activities. It is largely a management system, and balances ethical and financial success using performance metrics. By doing so, it allows management to focus on things other than just profit (Ferrell, Fraedrich, Ferrell 239).
The Triple Bottom Line – This system measures three different things, which is why it is called triple. Instead of just profit, it measures economic, environmental, and social goals of the corporation. It details ways of describing and improving success in these three areas. Some think that it is necessary to use this system if you want to have an ethical organization (Ferrell, Fraedrich, Ferrell 239).
Ferrell O.C., Fraedrich J., Ferrell J. (2009). Business Ethics: Ethical Decision Making and Cases. (7th ed.) Mason, OH : South-Western Cengage Learning.