Operations management involves controlling and designing the production process, as well as redesigning operations for producing goods or services. Ethics are crucial in this field as they address fundamental human needs and enhance credibility. Specifically, ethics in operations management refer to the environmental, social, and communal responsibilities of business professionals. To make ethical decisions, managers in this field must think creatively. Companies of various sizes have implemented codes of conduct and systems to address ethical concerns and facilitate better decision-making processes.
When it comes to decision-making, operations management plays a crucial role. This is because operations management involves the coordination of resources within a well-defined system. These resources are combined and transformed in a way that creates value. Operations managers utilize their knowledge and available materials and capabilities to effectively handle materials and achieve the desired quantity and
...quality of products. However, ethics are also important in operations management. Unfortunately, not all managers are responsible individuals and some engage in drug or alcohol consumption at work. This behavior often leads to poor judgment, negatively impacting the entire production process, including the employees involved in handling the production.
When making decisions, operations managers are responsible for handling various ethical matters. These decisions are influenced by important factors such as the magnitude of consequence, social agreement, effect probability, time interval, concentration of effect, and proximity. For instance, Paul Baum, the founder of RTI (Rumarson Technology Inc), has made computer recycling a central mission for the company. RTI acquires, refurbishes, and distributes computer equipment through inventory buyout programs or trade-ins. Essentially, the company purchases used computers and restores them before selling them as "nused" PCs with a 25-40% warranty.
RTI helps
the environment by donating and recycling computers that are not purchased. They prioritize ethical practices and customer care because computers contain more toxins than oil spills. However, when a company acts unethically in operations management, it can have devastating consequences. An instance of this is when Sanyo Electric Corporation, in collaboration with Lenovo, shipped over 200,000 faulty laptop batteries. Customers reported issues such as overheating, sparking, and even a laptop catching fire.
After this incident, Sanyo had to recall the batteries, incurring substantial financial losses. However, monetary value should not overshadow all other aspects of business. Sanyo also faced a decline in reputation and a significant drop in stocks. If the manufacturers had promptly acknowledged their mistake, none of these consequences would have occurred. The entire company had to bear the consequences due to unethical behavior within the operations management department.
Many companies today adhere to environmentally-friendly strategies in order to minimize negative outcomes and help the environment. This approach is the perfect proof of good ethics in operations management. For a business to be included in the sustainable branch – and feel that it’s making a difference – it must be transparent from all points of view. Believe it or not, a sustainable set of business practices has a great impact on the relationship of an organization with its employees, investors and customers.
References
- Kaplan, K. The cutting edge: computing/technology/innovation.1995. latimes.com
- Code of Ethics and Standards of Professional Conduct. cfainstitute.org
- Rudnika. EA. Ethics in operations management course. 2005. nih.org
- Dellinger AJ. Toshiba recalls 200,000 laptop batteries. 2016. dailydot.com
- Bradley J. Challenges that face operations managers. chron.com
- What is operations management? mitsloan.edu
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