Principles of Business

The Impact of Ethics on the Success of an Organization; Volkswagen’s Car Emission Scandal.

The conservation of a sustainable environment is a serious concern to many nations in the world. Several environmental protection agencies have a primary concern on issues such as globalization as well as emissions. The Environmental Protection Agency (EPA) ensures there is control in emissions, mainly from vehicles exhausts. The standards put up by various agencies have set high standards for industries manufacturing fuel-efficient diesel vehicles. Volkswagen Company was caught up in the scandal regarding emissions. The company was rigging the tests of emissions to look like its diesel cars were not polluting the environment (Mansouri, 2016). Many vehicles sold by the firm were found with defeat softwares and devices, which transformed the performance of cars as per the required emission laws. As a result, Volkswagen’s conduct had an impact on stakeholders in several ways. They had tarnished reputations, others were involved in environmental issues, the stock market had changed, and many lost their jobs. Organizations must meet ethical standards to safeguard the image of their firms.

The Effect of Sustainability to the Success of the Starbucks, U.K.

Starbucks Company built its image through the provision of enjoyable and relaxing experiences. The firm has maintained its goals and works at implementing them effectively and consistently. The firm has maintained a sustainable business by collaborating with its employees. Starbucks offers its workers’ health insurance and stock options. The firm has gone to the extent of setting up multi-million dollar research on marketing. The firm’s sustainability strategies not only apply in the U.K but also around the globe. Starbucks has conducted various sophisticated client surveys as well as gathering great feedback to understand the nature of its market. Starbucks has managed to create a renowned worldwide brand, which is accepted by clients all over the globe. The organization has focused on offering standard quality experiences rather than pricing its services cheaply. The current market prefers to pay more for value-added services. Studies reveal that customers are willing to pay more for better experiences other than poor quality services. The success of a firm is based on the ability to create a sustainable customer loyal base. Starbucks is also known for its ethical, social responsibilities (Ballou, Heitger and Landes, 2006). The actions taken to conserve the environment include water conservation, green construction, and recycling. These activities sustained over a long period have helped to improve the reputation of the firm.

The Impact of Integrity to the Success of a firm: Starbuck’s Tax Avoidance Case Study

Starbucks was reported to have been avoiding tax in the U.K. The firm faced integrity issues, and its reputation was hampered. The company’s number of customers significantly dropped during the following year. The firm registered a low turnover and had to put in place various measures to overcome the incident. A report published in Reuters revealed that Starbucks U.K. had only paid 8.6 million pounds since it started operating in the country in 1998. The firm had been profitable, but it still avoided the payment of the corporate tax. Transcriptions recovered by the investigators determined that the firm had been saying to its investors that the firm was making profits. Hence, the leaders were lying about the profitability of the firm. The integrity of this organization was tested during this time. The management’s contradicting statements tarnished the image of the company (Austin and Wilson, 2017).


Factors Affecting Organizational Behavior

The study of organizational behavior helps to understand how people become part of a firm’s operational systems and plans. One of the benefits of life is the achievement of professional and personal goals. These objectives are related to the conduct of an individual at work. Learning how to manage one’s efficiency at work is a vital skill that workers need to capture.  There are some forces, which affect the behavior of individuals within an organization. These factors include conflicts, perception, demographic features, skills and abilities, and changes at the executive level (Kotter, 1978).

Every organization has its level of conflicts. These disagreements show the presence of good exchange of creativity and ideas. The decisive battles help workers to have the urge of improving themselves. The misunderstandings push the workers of an organization to do research that may end up boosting the firm. However, unhealthy conflicts can result in absenteeism, reduced productivity, as well as dissatisfaction at the workplace. These behaviors lead to inadequate service provision to customers. Small firms may have fewer abilities and experiences to handle the discomforts among their employees. Large companies, on the other hand, have ways to manage the work-related stress as well as reducing the employee turnover.

The perception of workers in the workplace environment influences organizational behavior. The ability to interpret the background is an influential factor that needs the concern of the management. The reason is that employees can positively or negatively label their working environment. The positive minded individuals need to be employed for they will boost the success of the firm. Startup firms may have minimal skills to evaluate employees with proper cognitive interpretations. Large firms can assess and improve the mental setups of its employees through training and various opportunities.

Personal skills and abilities influence the behavior of workers within an organization. The capacity to perform a duty is called ability while a skill is a capability to acting in ways that lead to better performances. Skills and abilities are critical in the formation of individual behaviors. These behaviors affect the general conduct of employees in the organization. The productivity and efficiency of operations are as a result of skills and abilities. Large firms can nurture their workers to improve their skills and abilities. These enterprises do this by training their employees, offering vacation opportunities and other costly projects that promote individual behavior. However, Startup firms are unable to change these characteristics because the expenses for improving skills and abilities could be overwhelming in the beginning.

The features of demography include sex, age, race, nationality, education, and the socio-economic background. Most firms prefer workers from proper socio-economic backgrounds. These employees are young and well educated. They are deemed to perform better than other employees. The big organizations can afford to pay for young and talented professionals. Startup businesses may have a hard time finding these dynamic employees because of the expenses involved. These employees may also want established firms to improve their professions.

Changes in top management affect the behavior within the organization. Employees may be used to the old managers. The changes bring in new ideas and the employees have to cope with the transformations (Kotter, 1978). Dismissals, transfers, promotions, and retirements may bring positive or negative behavior in the firm. Star up firms do not mostly face these issues because the firms are at the beginning of their operations. Large firms deal with behavioral changes resulting from managerial adjustments.


List of References

Austin, C.R. and Wilson, R.J., 2017. An examination of reputational costs and tax avoidance: Evidence from firms with valuable consumer brands. The Journal of the American Taxation Association39(1), pp.67-93.

Ballou, B., Heitger, D. and Landes, C., 2006. The rise of corporate sustainability reporting: A rapidly growing assurance opportunity. Journal of Accountancy202(6), pp.65-74.

Kotter, J.P., 1978. Power, success, and organizational effectiveness. Organizational Dynamics6(3), pp.27-40.

Mansouri, N. 2016. A Case Study of Volkswagen Unethical Practice in Diesel Emission Test. International Journal of Science and Engineering Applications. Pp.211-216.