This week, the focus is on adopting humanist commitments as manufacturing leaders move from empathy to ethical development. Organizations must integrate a high level of ethical development if they intend to be a humanist manufacturing operation. An ethical manufacturing definition is "a holistic approach to manufacturing that focuses on good health for all involved." The organizational impact of doing anything less will have a detrimental effect on some stakeholders and, in extreme cases, all stakeholders.
"Non-violence leads to the highest ethics, which is the goal of all evolution. Until we stop harming all other living beings, we are still savaging." - Thomas A. Edison
We continue the "focus on good health for all involved" theme—the article with this quote further expanded considerations for ethical manufacturing. The objective is to embed a holistic approach that uses ethical principles in all facets of the company. Three considerations are:
1. Ethical production – The manufacturing setting should ensure the health and safety of all stakeholders impacted by both internal and external operations. An internal example is that workers should know that their employer is unwilling to trade their wellbeing for higher productivity. Externally, our plant operations should not lead to the Cuyahoga River catching on fire multiple times, as shared in an earlier post.
2. Ethical energy – There is a growing expectation that manufacturers integrate renewable energy sources to power their plant operations. An initial step is to improve energy efficiency. In all cases, the ethical approach is to significantly exceed the bare minimum requirements for managing the harmful emissions, energy, and waste impacts of inefficient electric usage.
3. Ethical products – A company must produce safe products. An amoral example where this did not occur will follow. The manufacturing operation should design products to high standards with no harmful contamination or effects on any stakeholders.
A few examples of the ethical standards that guide a humanist manufacturing operation that produces safe and without waste products. With this in mind, there will next be a review of the stages of ethical development.
Reidenbach & Robin developed a five-stage model of moral development in business. They propose that organizations move through each stage as they mature. For example, the company would have an unbalanced sole profit focus at the initial startup. Then, at full maturity, the firm would balance ethics and profits. We understand at this point in history that some companies will not progress, some that advance will regress during difficult times, and others will begin and stay at a high or low ethical level. However, understanding our company's status and planning to move to a higher ethical standard is an ideal objective. The five stages are:
1. Amoral – Profit is the ultimate objective and outweighs ethical considerations. A company may know that there is lead in their toys but are unwilling to lose profit margin due to eliminating it from their products.
2. Legalistic – An organization complies with the lowest legal and regulatory requirements. The manufacturing operation works toward minimum compliance with Occupational Health and Safety Administration (OSHA) regulations.
3. Responsive organizations – At this middle level of the ethical stages, organizations are still highly focused on profit but are beginning to give more robust consideration for ethically doing their work. An example is that an employee may be fired or reprimanded by their employer for doing something considered unethical, like taking expensive gifts from a upplier.
4. Emerging ethical organizations – The manufacturing operation has become more proactive in setting an ethical culture with a nearly equal balance between ethical and profitability considerations. As a result, ethical policies are emerging, and there is evidence of a similar proportion of ethics and profits in employees' decisions and actions.
5. Ethical organizations – The company has fully integrated proactive ethical consideration into all employee actions at the ultimate level of ethical maturity. Leadership demonstrates and sets a high expectation that members of the organization act at a higher moral status.
Their model states that the highest level is one where there is a balance of their concern for ethical and profitability considerations. I would argue that adding a sixth stage of moving from an equal emphasis on profits and company ethics to one of ethics as the primary focus. In the earlier example, the manufacturer of toys with lead should have immediately pulled the product from store shelves and recalled their balance in children's hands, knowing that it would negatively impact their profit margin.
Image Credit: Pixaby.com/rdaconnect
Industry apparel manufacturers have historically only audited and monitored first-tier suppliers. Patagonia went deeper and found in 2011 that there were multiple instances of worker exploitation, forced labor, and human trafficking at lower-level suppliers in their supply chain. As a founder and accredited member of the Fair Labor Association, it was unacceptable. While embarrassing to this "well-heeled outdoor adventure brand," they responded by decreasing their number of first-tier suppliers, strengthening their social responsibility office, and contracting with Verité to increase the number of audits at all levels of their supply chain. Where others in the industry look the other way, Patagonia has responded at a high ethical level to improve the social impact of their supply chain, despite a negative impact on their profit margin. An example of the earlier proposed the sixth stage of corporate ethical development. Furthermore, they responded to the need to "focus on good health for all involved."
As the world evolves, the expectations grow for businesses to comply with ethical standards. Therefore, intelligent leaders should continue to move their organizations upward to the higher stages of ethical development. Doing otherwise is a continuous roll of the dice that may occasionally lead to a 7 or 11. Still, eventually, "craps" will be an outcome that a company will be unable to survive.
An excellent first step would be to assess the organization to determine the current stage of ethical development. Then, regardless of where the company falls, begin to develop plans to continue moving up to the next stage.
I am grateful to authors like Max H. Bazerman, that continue to evolve our thinking on ethics. In his Harvard Business Review article A New Model for Ethical Leadership: Create more value for society he looks at the challenges of the positive impacts of autonomous vehicles. He presents the need to make more decisive ethical choices by engaging in actions that help us overcome barriers of which we are unaware.
Next week's blog will integrate humanist principles into leaders' roles, shifting to understanding the importance of the humanist commitment to global awareness.
To learn more about our work or read more blog posts, visit emmanuelstrategicsustainability.com.
Cover Image Credit: Pixaby.com/Tumisu
