For profit and non profit organization Essay
For profit and non profit organization
Both not for profit and for profit companies have many similarity and differences. A lot of companies start with the intent of making a profit. These companies also pay taxes and are called profit or for profit companies (Rodwell, & Teo, 2013). Other companies, while they can make a profit begin with the intent of helping others. These companies are not for profit or non-profit organizations. Nonprofit organizations are not allowed to make a profit, and do not pay taxes, but they might generate income. Any income generated by a nonprofit must be returned to the organization to accomplish the goals for which it was established (Anand, 2008). Regardless of its status, many companies like Goodwill Industries International and BP P.L.C. are faced with challenges that threaten the company ethically and morally. Part One: Goodwill Industries International (Not-for-Profit) Profile of Goodwill Industries: Goodwill Industries International is a nonprofit 501(c)(3) organization.
Donations and gifts are fully tax-deductible to the degree acceptable by law. Goodwill Industries International is a worldwide social services initiative that creates opportunities for people to attain financial constancy and build durable families and lively communities by offering job training, employment assignment services and other community-based programs for people who have incapacities, those who do not have the education or job experience, and others who face difficulties finding employment (Goodwill Industries International, 2014). Goodwill supports the operations of about 165 individual Goodwill chapters in the US and Canada. Founded in 1902, Goodwill is one of the world’s leading benefactors of such services, as well as one of the largest employers in the world of the disabled (Hoovers, 2014). Areas of Interest: While it is most recognized for its 2,800 thrift stores, Goodwill concentrates on offering rehabilitation, job preparation, placement, and employment services for people with disabilities and others. The company helps people to find and keep good jobs (Hoovers, 2014).
Goodwill offers programs for young people, senior citizens, veterans, and people with disabilities, criminal backgrounds and other specialized needs (Goodwill Industries International, 2014). Mission statement: Goodwill works to improve the self-worth and value of life of individuals and families by reinforcing communities, removing obstacles to opportunity, and helping people in need achieve their full potential through learning and the power of work. Goodwill strives to enhance the dignity and quality of life of individuals and families by helping people reach their full potential through education, skills training and the power of work (Goodwill Industries International, 2014). Summary of activities: (Based on 2013 Data) Last year, Goodwill assisted more than 9.8 million people prepare for careers in industries such as banking, IT and health care, and to get the backup services they needed to be successful (Hoovers, 2014).
Last year the company served 9.8 million through employment and training programs, 44 million through mission services, 261, 875 received a job with Goodwill’s assistance and its estimated that those people earned $4.4 billion (Goodwill Industries International, 2014). Funding Sources: Support for Goodwill programs is produced mainly from the sale of contribution of goods, both at the retail stores and through an online auction site, and from contract work and government grants (Goodwill Industries International, 2014). The total profits produced by Goodwill organizations was $5.17 billion of which 83% was spent on programs. There are 87 million donors. Retail stores generated $3.79 billion, industrial and service contract work produced $647 million, $90 million came from government grants and $27 million from corporate and foundation grants. Individual gifts, donations and fees for services generated $46 million and government support foe mission services produced $455 million (Goodwill Industries International, 2014).
History: Goodwill was founded in 1902 in Boston by Rev. Edgar J. Helms, a Methodist minister and early social visionary. Helms gathered old domestic goods and clothing in more affluent areas of the city, then taught and hired those who were underprivileged to fix and restore the goods (Goodwill Industries International, 2014). Goodwill Structure: Goodwill International’s CEO is Jim Gibbons. Cindy Cho Kim is the Director of International Development and currently there are two spokespeople Organization expert Lorie Marrero is the face of the Donate Movement. ABC reporter Evette Rios united with Goodwill’s cause in 2012 to help to plead to the Latin American market. Goodwill stores are self-governing organizations headed by a charitable board of directors (Goodwill Industries International, 2014). Goodwill has a connection of 165 independent, community-based Goodwill stores in the United States and Canada. Each local Goodwill must be accredited, request participation and meet specific standards created by Goodwill Industries International (GII) (Goodwill Industries International, 2014).
The GII Member Services center, is located in Rockville, MD. There are 2,900 total retail stores. Goodwill Industries of the Columbia, Inc. was initially recognized as a branch division of the Seattle Goodwill in 1961. Goodwill also has an online auction site at www.shopgoodwill.com (Goodwill Industries International, 2014). Values statement: The goods were then resold or were given to the people who fixed them. The system worked, and the Goodwill value of “a hand up, not a hand out” was established. (Goodwill Industries International, 2014). The value statement includes respect, integrity, stewardship, innovation and excellence (Goodwill Industries International, 2014). Problems: One problem that Goodwill Industries has is their view in the public eye. Many Goodwill stores are viewed as exploiters of disabled citizens. Some stores used a federal law under the Special Wage Certificate Program, to employ disabled workers at rates of 22, 38, and 41 cents per hour (Gibson, 2013).
The law allows nonprofits and companies to get a certificate that lets them to employ disabled workers “based on their abilities” at whatever salary they find suitable, with no minimum. This is compared to the $729,000 in salary and deferred compensation that the CEO, Jim Gibbson makes. The CEOs of Goodwill organizations across the U.S. mutually earned $30 million (Gibson, 2013). The problem exists because there are numerous disabled adults who still need to support themselves but cannot get hired by normal means. Management and upper administrators have the ability to ensure that all their employees work in a safe and equal working environment which proper accommodations for their disabilities. Goodwill’s response was that disabled workers would not be hired anywhere else and should be appreciative for any amount they make even if it is 22 cents. Goodwill is against eliminating the program because it would cause more harm than good (Gibson, 2013).
Support for Goodwill programs is produced mainly from the sale of contribution of goods, both at the retail stores and through an online auction site, and from contract work and government grants (Goodwill Industries International, 2014). Another problem that Goodwill faces is criticisms for ripping off customers. The prices of items are for a donated used article. Goodwill has been accused of taking the better donated items and selling the products on eBay or keeping them for themselves, or calling family members to come in and purchase the items.
They also sell the less desirable items in stores and price them at ridiculously expensive prices for used and donated items. According to Smith, selfishness is a fundamental driving force of human conduct (Fieser & Moseley, 2012). Companies such as Goodwill accumulate wealth through a system that presents good intentions but are driven by greed. The company has become very wealthy off of items that were completely free. Company Impact: One report indicates a decrease in donations (Begam, 2010). Donations for several local charities are at an all-time low this year. Goodwill says their donations are down 25% in their stores across the region (Begam, 2010). Many consumers are urged not to donate to Goodwill because of their treatment of disabled employees and pricing donated goods at high prices.
Part Two: BP P.L.C (For-Profit)
Although BP P.L.C. is a profit organization, it faces many challenges that also threaten the company ethically and morally. Profile of BP, P.L.C.: BP is one of the world’s leading international oil and gas companies. We provide customers with fuel for transportation, energy for heat and light, lubricants to keep engines moving, and the petrochemicals products used to make everyday items as diverse as paints, clothes and packaging (BP, 2014). Areas of Interest: BP’s area of interests includes finding and extracting oil and gas to producing fuels, lubricants and petrochemicals (BP, 2014). Mission Statement: Although not specifically labeled a “mission statement,” BP has a published statement of “What We Stand For”: “BP wants to be recognized as a great company – competitively successful and a force for progress. We have a fundamental belief that we can make a difference in the world. We help the world meet its growing need for heat, light and mobility. We strive to do that by producing energy that is affordable, secure and doesn’t damage the environment (BP, 2014).
Summary of Activities: In 2013 BP completed 17 exploration wells and made seven potentially commercial discoveries in 2013. It was the most successful year for exploration drilling in almost a decade. They started three major projects in 2013 and another three in January and February 2014. They completed the commissioning of all major units for the Whiting refinery upgrade, transforming it into one of our advantaged downstream assets in our portfolio (BP, 2014). Funding Sources: In 2013 BP had several areas of funding. Sales and other operating revenues totaled 379,136 million dollars. Earnings from joint ventures – after interest and tax totaled 447 million dollars. Earnings from associates – after interest and tax totaled 2,742 million dollars. Interest and other income totaled 777 million dollars.
Gains on sale of businesses and fixed assets totaled 13,115 million dollars. Total revenues and other income totaled 396,217 million dollars and BP shareholders totaled 23,451 million dollars (BP, 2014). BP’s History: BP’s history begin with innovations, starting in 1908 with oil found in a rugged part of Persia after a long and difficult search. Since then, discoveries large and small have fuelled the company’s progress. Back in England, William D’Arcy gambled his considerable fortune on oil, and was on the verge of losing everything. It seemed that the geologists and experts who had wagged their heads encouragingly at him since 1901 had all been wrong about the oil beneath the sands of Persia. By the early morning of 26 May 1908, the whole camp reeked of sulphur. At four o’clock the drill reached 1,180 feet and a fountain of oil spewed out into the dawn sky.
Within a year, the Anglo-Persian Oil Company, which would one day become BP, was in business (BP, 2014). BP’s Values: Our values of safety, respect, excellence, courage and one team align explicitly with BP’s code of conduct and translate into the responsible actions necessary for the work we do every day. Our values represent the qualities and actions we wish to see in BP, they guide the way we do business and the decisions we make (BP, 2014). Structure: BP’s businesses are organized to deliver the energy products and services people around the world need right now. It has 102,498 locations and its international headquarters in located in St James’s Square, London Its Upstream segment is responsible for activities in oil and natural gas exploration, field development and production.
Its Downstream segment focuses on fuels, lubricants and petrochemicals. BP is one of the world’s leading international oil and gas companies. They provide customers with fuel for transportation, energy for heat and light, lubricants to keep engines moving, and the petrochemicals products used to make everyday items as diverse as paints, clothes and packaging (BP, 2014). Problems: One problem that BP faces results from the oil spill in the Gulf of Mexico in 2010. The company faces many lawsuits. BP is front and center because of its high-profile role in the disaster, not to mention its deep pockets and its reputation as a global business power. Current estimates have BP setting aside about $32 billion to cover cleanup, legal claims, fines, and other costs related to the spill. So, clearly BP is planning on taking the brunt of the legal blame — and the biggest financial hit, for contributing to the worst oil spill in the nation’s history (Nolo, 2014).
Another problem the company faces is the mandated cleanup fines that the government is requiring the company to pay. According to Smith, selfishness is a fundamental driving force of human conduct (Fieser & Moseley, 2012). Companies such as BP accumulate wealth by using resources from the Earth. The company is subject to lawsuits and cleanup fines because of the numerous livelihoods that were damaged and the damage cause to the environment as a result of the oil spill the government requires the company to supply.
Recently, BP Oil and Gas filed a petition with US Supreme Court Justice Antonin Scalia seeking review of a lower court’s decision to have BP continue making payments to the affected parties related to the 2010 Gulf of Mexico oil spill and stop payments to claimants while litigation continues (Matthew, 2014). Impact to Company: Initially, BP had a negative public view and maintained its stock. However, by late June, BP was trading in the $27 range. Fewer analysts recommended buying BP and a few recommended that investors sell. Coincidentally, this was all about the same time as or shortly after BP agreed to put $20 billion into an escrow account to pay for spill-related damages and announced it would not pay stock dividends in 2010 (Lawyers.com, 2014). In addition as of 2013, BP spent $26 billion on response efforts.
Part Three: Personal Ethical Evaluation
Goodwill Industries International
Goodwill’s primary response was driven by selfish motives (Fieser & Moseley, 2012) and morally irresponsible. The company’s response that the people should be grateful and not complain about their wages brings a negative view upon the company. According to Fieser and Moseley (2012), the moral subjectivist thinks that right and wrong is decided by what, the subject of the situation, thinks or feels is right or wrong. However the average person working in the United States expects to receive minimum wage for working, because it is the norm or culturally relative (Fieser & Moseley, 2012). The culture of the United States would view Goodwill as taking advantage of already limited people. Ethical egoism implies that people act so as to maximize their self-interest (Fieser & Moseley, 2012). Goodwill felt that it was doing a greater good by hiring those who would not normally have gotten employment. Morally speaking, they were within the confines of the law to operate as such. Because Goodwill used the Special Wage Certificate Program, to employ disabled workers at rates cents per hour (Gibson, 2013) they were legally justified in their actions.
The law allows nonprofits and companies to get a certificate that lets them to employ disabled workers “based on their abilities” at whatever salary they find suitable, with no minimum. On the other side of this coin is that Goodwill receives grant money from the government for operating as a nonprofit organization and actually helping people in the community. Even though the attempt was noble, they could have done more to improve the situation. Though they hired a demographic of people that would normally remain unemployable, they could have offered a salary that demonstrates a level of equality, fairness or self-worth. In many cases these people were working for less than eight dollars a day. They spent more money in expenses getting to work than they actually made at work. Some of the people complained about that very issue also, that they did not make enough money to cover rent. This is compared to the $729,000 in salary and deferred compensation that the CEO, Jim Gibbson makes. The CEOs of Goodwill organizations across the U.S. mutually earned $30 million (Gibson, 2013).
The company received 90 million dollars government grants and $27 million from corporate and foundation grants in 2013. Goodwill offered a potential solution to a difficult situation. In doing so, the company created a problem for themselves. It could have been prevented had they offered an acceptable wage compensation to the disable employees. One way Goodwill can address the issue with the treatment of its employees is to consider the triple bottom line, which implies that successful companies must pursue three distinct values: people, the planet, and profit (Fieser & Moseley, 2012). There should be social benefit to workers and the community, environmental benefit with the implementation of sustainable ecological practices, and economic benefit only after all hidden environmental costs have been factored in. In doing so, if Goodwill hires employees, then they should pay them minimum wage and accommodate their job assignments according to their ability regardless of their level of ability.
They should also offer opportunity for raises and promotion. This ensures that everyone gets equal pay and fair treatment. One solution for the issue of greed is to put into place quality assurance representatives and to create a price list for different categories of items. This ensures that all items are priced the same across the country. The price list should have a price range, which includes the lowest and highest prices that items can be priced within their category. For example, a lamp can be priced from $3.00 to $5.00 depending on quality. This solution is possible but would require extreme communication across the nation. It would also require store representatives to ensure that these policies were followed and to ensure that all donations are inventoried properly.
BP’s primary response was utilitarian driven (Williams, 1973) and morally responsible (Fieser & Moseley, 2012). The company was motivated by the idea to make things right. The company’s response to set finances aside for the cleanup efforts and to assist those affected by the oil spill was their way of taking responsibility for the harm that their operations and property caused on the environment and lives in the Gulf area. The oil spill was a direct result of the company drilling in the Gulf. The thousands of gallons of oil that flooded the area affected animal life and eventually the livelihood of fishermen. BP plc was faced with managing the crisis and examining the causes of its organizational failure. At the core of the issue is a failed organizational culture. The problem could have been prevented had BP ensured that all safety measures for drilling were being used. As time passed, BP became more driven by ethical egoism.
They began to act so as to maximize their self-interest. They no longer wanted to pay the families who were affected and wanted courts to reevaluate the situation to determine if they were still obligated to pay these families for the oil spill that killed and poisoned wildlife, animals and fish (Matthew, 2014). Even though the company’s initial response was admirable, they came back with an actions that demonstrated that they are truly a profit company and wanted to stop all obligation to pay those who were affected by the oil spill.
The company agreed to put $20 billion into an escrow account to pay for spill-related. They eventually paid $26 billion in issued related to the oil spill (Gibson, 2013). BP could have do more to help the situation analyzed the damage caused by the oil spill to determine lasting effects on fishermen’s livelihoods. The company can set aside more money to assist in future cleanup efforts, provide funding to local environmental services for testing and cleanup efforts. BP can also settle all reasonable lawsuits. This will help its public image and provide closure for families who lost their livelihood.
The company can set aside money for environmental service agencies to test toxicity levels, population and regeneration of different animal species and any future cleanup efforts. These solutions are possible because eventually BP will have to pay more in legal fees, lawsuits or fines. These solutions offer them the chance to get ahead of the problem and be proactive
Part Four: Critique of Company’s Actions
Goodwill Industries International
Goodwill’s actions and motivation seem to reflect self-interest and at times down right greed. The company’s response that the people should be grateful and not complain about their wages brings a negative view upon the company. According to Fieser and Moseley (2012), the moral subjectivist thinks that right and wrong is decided by what, the subject of the situation, thinks or feels is right or wrong. Even though Goodwill’s administration would have viewed the hiring of disabled people at such a low wage as acceptable, many would not. The average person working in the United States expects to receive minimum wage for working, because it is the norm or culturally relative (Fieser & Moseley, 2012). The culture of the United States would view Goodwill as taking advantage of already limited people. Ethical egoism implies that people act so as to maximize their self-interest (Fieser & Moseley, 2012).
Goodwill felt that it was doing a greater good by hiring those who would not normally have gotten employment. Morally speaking, they were within the confines of the law to operate as such. Because Goodwill used the Special Wage Certificate Program, to employ disabled workers at rates cents per hour (Gibson, 2013) they were legally justified in their actions. The law allows nonprofits and companies to get a certificate that lets them to employ disabled workers “based on their abilities” at whatever salary they find suitable, with no minimum. The company’s response should have been response was utilitarian driven (Williams, 1973).
This approach would have allowed the company to view the disabled as people worthy of the respect of being treated and paid equally. Just because they “can” legally pay these employees less does not mean that it is the correct thing to do. Right and wrong could have been determined by a cost-benefit analysis. Because the company receives so many millions to help fund programs like employing disable people, they would not have lost anything financially to pay the people at least minimum wage. There could have been several benefits, such as a more positive public view, sustained donations from the public and a developing a program that actually helps the community.
BP’s primary response was utilitarian driven (Williams, 1973) and morally responsible (Fieser & Moseley, 2012). The company was motivated by the idea to make things right. The company’s response to set finances aside for the cleanup efforts and to assist those affected by the oil spill was their way of taking responsibility for the harm that their operations and property caused on the environment and lives in the Gulf area. As time passed, BP became more driven by ethical egoism. They began to act so as to maximize their self-interest. They no longer wanted to pay the families who were affected and wanted courts to reevaluate the situation to determine if they were still obligated to pay these families for the oil spill that killed and poisoned wildlife, animals and fish (Matthew, 2014).
(1) Moral Subjectivism
In its common form, Moral Subjectivism amounts to the denial of moral principles of any significant kind, and the possibility of moral criticism and argumentation. In essence, ‘right’ and ‘wrong’ lose their meaning because so long as someone thinks or feels that some action is ‘right’, there are no grounds for criticism.Ý If you are a moral subjectivist, you cannot object to anyone’s behaviour (assuming people are in fact acting in accordance with what they think or feel is right).Ý This shows the key flaw in moral subjectivism — probably nearly everyone thinks that it is legitimate to object, on moral grounds, to at least some peoples’ actions.Ý That is, it is possible to disagree about moral issues.
(2) Cultural Relativism
Right and wrong is determined by the particular set of principles or rules the relevant culture just happens to hold at the time. Cultural Relativism is closely linked to Moral Subjectivism.Ý It implies that we cannot criticize the actions of those in cultures other than our own.Ý And again, it amounts to the denial of universal moral principles.Ý Also, it implies that a culture cannot be mistaken about what is right and wrong (which seems not to be true), and so it denies the possibility of moral advancement (which also seems not to be true).
(3) Ethical Egoism
Right and wrong is determined by what is in your self-interest.Ý Or, it is immoral to act contrary to your self-interest. Ethical Egoism is usually based upon Psychological Egoism — that we, by nature, act selfishly.Ý Ethical egoism does not imply hedonism or that we ought to aim for at least some ‘higher’ goods (e.g., wisdom, political success), but rather that we will (ideally) act so as to maximize our self interest.Ý This may require that we forgo some immediate pleasures for the sake of achieving some long term goals.Ý Also, ethical egoism does not exclude helping others.Ý However, egoists will help others only if this will further their own interests.
An ethical egoist will claim that the altruist helps others only because they want to (perhaps because they derive pleasure out of helping others) or because they think there will be some personal advantage in doing so.Ý That is, they deny the possibility of genuine altruism (because they think we are all by nature selfish).Ý This leads us to the key implausibility of Ethical Egoism — that the person who helps others at the expense of their self-interest is actually acting immorally.Ý Many think that the ethical egoist has misunderstood the concept of morality — i.e., morality is the system of practical reasoning through which we are guided to constrain our self-interest, not further it.Ý Also, thatÝ genuine altruism is indeed possible, and relatively commonly exhibited.
Utilitarianism is a very simple view that matches common sense – right and wrong can be determined by a cost-benefit analysis. We must consider all the good and bad consequences when deciding if an action is right. Utilitarians disagree about what counts as “good” or “bad.” Some think that fulfilling desires is good and thwarting desires is bad, classic utilitarians think that happiness is good and suffering is bad, and pluralists believe that there are multiple “intrinsic goods” that are worth promoting. An action will then be said to be “right” as long as it satisfactorily causes good consequences compared to alternative actions, and it will be “wrong” if it doesn’t.
Utilitarianism doesn’t discriminate or encourage egoism. It is wrong to harm others to benefit yourself because everyone counts.
What counts as “satisfactory” will not be agreed upon by all philosophers. Originally some philosophers suggested that only the “best” action we could possibly perform is “right,” but this is an extreme, impractical, and oppressive view. Why? Whenever you are taking a shower or spending time with friends it would probably be better to be doing something else, such as helping the needy, but it is absurd to say that you are always doing wrong whenever you are taking a shower or spending time with friends. Additionally, it isn’t clear that there is a “best” course of action always available to us. There might be an unlimited number of actions we can perform and at least one of them could be better than what we choose to do.
Corporate sustainability includes many normal business practices. The oil spill in the Gulf of Mexico provides a classic example of how failure to be sustainable can lead to an overall organizational failure of mandate, and a failure to serve stakeholders. BP plc was faced with managing the crisis and examining the causes of its organizational failure. At the core of the issue is a failed organizational culture. This paper examines what events and organizational values have led to the crisis and what changes to organizational culture would be required, to avoid a repeat event and begin to create a sustainable organization.
Arnold, D. H., & McKay, R. (2013). Sustainable Enterprises: Crisis Management and Culture Transformation for BP. Business and Management Research, 2(3), p16. Chicago
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