Regulations, moral values along with business ethics, form the basis of governance in the corporate world. Ethical standards should decide situations that are not expressly governed by regulation or law. Ethics is defined as standards used by companies to conduct their business operations. Standards are what define a company (Corey et al, 2011). Ethics should not be used as a sale item to the highest bidder. It would be easy for a company to ignore ethics in a bid to increase its sales and profits. It will only take such a company to deviate from its standards and tarnish its name. It is vital for a company, therefore, to adhere to standards.
Standards should be the drive of any business decision. If customers realize, that a company is unable to make right decisions, the impression the company leaves to the customers may be unfavorable and changing this image may be an overwhelming task. To alleviate the burden of establishing and maintaining standards in corporations, different techniques have been set up to measure the structural and behavioral organizational ethics. Six Sigma and Balanced Scorecard are some of the models used by companies to enhance business performance and ethics. Six Sigma Model If standards are set aside for short-term gain, they suffer in the end.
Ethical standards must therefore be absolute. The right decisions made by a company may not always be the most lucrative. Having ethical standards though, has given most business corporations the tools to make and follow the right decisions. Six Sigma is a set of strategies used by companies for quality improvement. In many organizations, Six Sigma simply means a quality measure that strives for perfection (Eckes, 2004). It is a data-driven approach and process for doing away with defects. This is done through driving towards six standard deviations between the nearest specification limit and the mean.
To realize Six Sigma, the process must produce less than 3. 4 defects in a million opportunities. The opportunity of Six Sigma is the total number of chances for a defect. The Six Sigma defect is anything out of the customer specifications. The process can be calculated using a calculator designed for that purpose (Kumar, 2006). A company such as NCR Corporation has adopted the Six Sigma model. NCR, a leader in information technology services worldwide provides support and management services for ATMs for banks, data warehouses for industries and point-of-sale terminals for retailers.
NCR has used Six Sigma to collect the customers’ needs in a manner that is quantifiable. This is to ensure there is a clearly defined problem that can be solved for customer satisfaction. This requires collection of data used to analyze the current process which data has helped the company to identify the root cause of the problems. Identifying the problems has helped to come up with an improvement method and a solution. The NCR team took advantage of tools such as solution evaluation matrices, brainstorming techniques and risk assessment tools to come up with appropriate solutions.
After this, NCR has developed a control process by documenting how new methods will be executed and by whom. NCR has used training and developed an ongoing monitoring process against the original target. Balanced Scorecard Model Like Six Sigma, Balanced Scorecard is a management system and strategic planning process used to bring in line business actions to the vision statement of an organization. It attempts to interpret sometimes-vague hopes of an organization’s vision and mission statement into managing the business practically in a better way at every level (Kaplan, 1996).
It is used by organizations to improve communication both internal and external while monitoring the performance of the organization against its goals. Through automation tools and design methods, Balanced Scorecard keeps record of activities of the employees and monitors results that occur from these activities. This new strategic management approach provides a clear guideline as to what business organizations should measure in order to bring to balance the financial perspective (Niven, 2002).
When fully set out, the process converts strategic planning from a theoretical exercise into the nerve center of the organization. Philips Electronics has applied the Balanced Scorecard system to promote continuous improvement. The Company created the scorecard with the understanding that what drives the performance presently, will determine future results. The organization uses the scorecard to equip the employees with understanding of the management’s strategic goals and future vision.
Philips created critical success factors to bring into line pointers that measures operations, markets and aboratories with success of the business. Conclusion Different organizations adopt different strategies to achieve their goals. Both Six Sigma and Balanced Scorecard are models similar in some ways. They both require that the organizations depend on contribution from customers and other stakeholders. They both rely on metrics and accurate data to communicate the organizational objectives and progress. Six Sigma’s output indicators or pointers can be used as measure in the Balanced Scorecard. This can help employees using the two models to focus on the same goals.