So what is ethical management? In a nutshell, ethical management is a corporate management method whereby the company fulfills its full social and moral responsibility for all interested parties, such as customers, shareholders, employees, affiliates, rivals, local communities and the environment. This is achieved by adhering to the principles of ethical management throughout all processes.
The aforementioned definition has two important points to keep in mind: first, “full social and moral responsibility for all interested parties,” and secondly, “adhering to the principles of ethical management throughout all company processes.”
The principle of fulfilling moral responsibility for all interested parties implies taking moral responsibility not only before shareholders, but also before employees, affiliates, customers, local communities, and even rivals. In contrast, taking responsibility only for specific interested parties, such as shareholders and employees, violates ethical management principles.
Ethical management also means that the company consistently abides by ethical principles throughout all processes. Applying moral principles only to some processes counteracts the genuine meaning of ethical management. Some companies, for instance, apply ethical principles only to prevent corrupt practices of their executives and to fulfill social philanthropy. Other companies fail to fully realize ethical management with only law-abiding management. Law-abiding management dictates that companies merely comply with government laws when fulfilling their responsibility, while ethical management requires companies to comply with “ethical” rules that are not stipulated by government laws, such as social philanthropy. In other words, ethical management does not permit actions that contradict societal values, even if they are not violating the law.
Indiscreet pursuit of a company’s goals with no regard for social values also counteracts ethical management. Indiscreet management includes: falsely labeling the country of origin, the use of low-quality raw materials, fraudulent accounting, gender discrimination, labor exploitation, shabby construction, the leaking of customers’ personal information, industrial spying, false and exaggerated advertisements, unfair transactions, bribing, conspiracy, and environmental destruction among many others. Within the past several years we have seen numerous cases of corporate collapses due to unethical practices. We have come to realize now more than ever that ethical management is the only way for corporations to coexist with society and to prosper for a long time.
Ethical management suggests a new vision for the future role of corporations. Very soon, the social responsibility of corporations will shift to “social leadership.” And the expression “respectable company” shows that the transition has begun. As time goes by, the role of government will shrink, while the role of corporations, as the most influential entity in society, will only keep growing - leading the public to demand more social leadership from the corporate world. Dongbu Steel is determined to become a genuine social leader and a respectable company through ethical management.
