MBA 635: Ethics, Corporate Culture and Social Responsibility – FINANCIAL LITERACY

 

Assessment Details:

• Words: 1500
• Topic: Ethics, Corporate Culture & Corporate Social Responsibility
• Subject: Business
• Number of Words: 6 pages
• Referencing Style: APA

 

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Rubric  Milestone 3

 

Introduction

            Noremak Inc., an organization offering financial education to high school students in the USA will cover up all the students irrespective of their caste, gender, and racial discrimination. The organization will maintain honesty and integrity in the provision of services. This study will highlight the ethical and regulatory issues affecting the entrepreneurial or the intrapreneurial idea, Moreover, it will also highlight the alignment of the corporate strategy and the sustainability of the financial education organization.

Trends

Business Environment: As Noremak Inc.  prepares itself to meet the demands of its customers and satisfy its staff, there has to be an analysis of the business environment has to be done. The core factors that the company will focus on will be its leadership, operations, information, and communication.

            As the leader of the company, I would have to ensure that I lead by example to create an ethically sound environment. According to (Systems, 2020), leaders can influence the policy, culture, and behavior of an organization. This means that my leadership will go beyond doing good in and outside the company, but ensure that the attitudes, behaviors, chain of commands, compensation, reporting, and space itself are transparent and mirrors the values that are established by the company. In other words, it will not be a printed document stuck on a wall, but it will be ingrained in how we do business.

            The other component that will be analyzed is that of operations. We will ensure that the system that is implemented will prevent unethical behaviors, reduce risks, and the processes are efficient and work how they should so that the employees are encouraged to maximize their roles and feel accountable for what they do. This will help to create some form of structure, discipline and increase the functionalities or relationships of working together as a unit.  This will ensure that our policies, procedures, and way of doing business are ethical and sound.  While we may not get everything right the first time, we must use the experiences and learn from them so that we strengthen our operations.

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            The other factor as mentioned earlier will be the information and communication piece. Information shared to internal and external customers has to be concise and truthful. We will ensure that what we share is not just because it sounds good or because it looks good on paper, but what is communicated is a reflection of what the company is doing. This will be inclusive of our financial statements and even our adverts, corporate communications, and our stakeholders.

            The political, economic, socio-cultural, and technological, take a look at how these factors affect the business (Walsh, J. 2019). We will explore each in details about Noremak Inc.:

The political component looks at how the government intervenes in the economy. It’s surprising to know that this plays a big component in the development of such a curriculum.  In Rhode Island, there is legislation in place, which will pass soon, which will require high schools to offer personal finance classes by the year 2021 (Pensions & Investments, 2019). As we can see, the success or failure of teaching this life-long skill has the powers of public policy.  In addition, In the realm of politics, since our presidents are voted for every 4 years, then depending on the strategic objectives of that candidate then it could positively or negatively impact the company. It all boils down to where they want to mobilize their resources and the areas they want to work on during their term.

            The macro-environment factors under this heading include factors such as inflation rate, savings rate, interest rate, etc. The importance of financial literacy can’t be overemphasized. Against this backdrop, the level of financial literacy in the USA is low, which hurts the economical development of the country (Smyczek, Slawomir & JuJustyna Matysiewic, 2015). This is just reiterating that the economy is dependent on the financial well-being of our citizens. So, if the economy is doing bad, then intervention would be needed at the root, which is to mold students how to navigate this complex financial world and not be a burden to the economy.

            It is especially important to consider society’s culture, shared beliefs, education, and attitude in rolling out financial education. In this case, financial literacy competency and skills have a lot to do with the family/home. A typical example is that parents are key influencers and role models when it comes to how the household manages its finances. The parents’ belief system is also passed on to the children. If the students’ parents guide them from impulsive spending or allow them to stick to what is on the grocery list then from here they are inhibiting a certain behavior, not to overspend and place an emphasis on need vs. want and the value of money (Bauer, E. 2018). We owe it to ourselves to develop a healthy attitude towards money and pass it onto the next generation so that they are not overwhelmed when it comes to making financial decisions.

            Technology plays a key part in all that we do today. To this end, teaching students in a format that they are gravitated to incorporates technology. Infusing technology will help students to learn and understand many of the areas centered around finances (Junco, A. 2019). They will then welcome the approach that is taken and be able to be in their comfort level learning. This is a fun and exciting way to reach out to our students and leave a critical skill pathway.

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Impact: The above-mentioned factors can impact the company negatively or positively. To ensure that we are not hit by surprise due to any of the variables, Noremak Inc. will ensure that we keep our eyes and ears open to changes in the wider environment and also ensure that the company gives its employees a comfortable, open and be one that honors everyone irrespective of where they fall on the organizational chart. We will also ensure that we communicate clearly and promptly with our team members as well. Routine check-in will take place and internal audits of the system that would have been in place. We will also ensure that we have a great rapport with our customers.

Another component is that we have to ensure that we are up to date with the technological advances so that we can keep our company and customers digitally savvy with the trends. Turning a blind eye to what is happening in and outside of the company, may contribute to low morale, outdated systems, losing customers’ interest, making the opportunity to a competitor to easily enter the market, environment breed unethical acts and mistrust. In summary, I agree with (Gitman et al., 2018), which highlights that to remain competitive, businesses must identify and respond to trends in the various sectors of the business environment.

Ethics

Issues: The ethical issues that are likely to affect the operation of Noremak Inc. include the political issues in the US. It has been found that the political issues are high in the education system of the US due to the existence of third parties. This has led to the formation of conversation parties among the students which will affect the intention of the students to enhance their financial knowledge (Engström & McKelvie, 2017). On the other hand, another vital ethical issue includes the caste issues affecting the operation of Noremak Inc. As it is found that the deserving students in the US do not receive a chance to get enrolled in the education organization, it is likely to demotivate the students affecting their standard of living. This lack of education will make it difficult for the students of the US to improve their financial knowledge thereby creating fewer employment opportunities for themselves.

            Another vital ethical issue affecting the operation of Noremak Inc. includes gender and social inequality. With the improvement in the level of technology, there exists a higher rate of crime and violence in the US thereby developing social inequality among the students. It will be difficult for the financial organization to impart higher financial education to those students as they will fail to utilize the knowledge for the growth and the development of the economy. Moreover, in the operation of Noremak Inc., the local citizens of the US will only be preferred at the initial stage for imparting financial education thereby creating inequality among the aspirants (Lucey, 2018).

This is likely to affect the operation of its business as the students of other caste are sure of not getting a chance in enhancing their financial knowledge. Further, another vital ethical issue affecting the business of Noremak Inc. includes the differences made between the low and the higher-income households. As the financial courses delivered by Noremak Inc. are costly, it will be difficult for the parents of the lower-income household to avail the courses for their children. Moreover, the company does not have strong resources or knowledgeable staff for educating the students or imparting them the correct knowledge.

It can be unethical for an educational organization like Noremak Inc. to impart such education where there does not exist optimum utilization of the resources along with the service and the price transparency (Yang et al., 2018). As Noremak Inc. is a startup company, there should be an adequate level of investments made in those sectors only which will assist in the effective growth and development of the business organization with relevant cost.

Corporate Strategy:As the students who do are not the citizen of USA approaches Noremak Inc. for gaining financial education and thus gets rejected, this will develop a pessimistic approach thereby affecting the corporate strategy of the company. Such a situation will also create distraction among the minds of the employees working with Noremak Inc. and thus it affects the morale and the productivity of the employees (Goyal & Kumar, 2021). The staff of the sales division of Noremak Inc. will not be successful in generating greater revenue as they will fail to fulfill their promises made to the students and their parents. All these aspects will affect the corporate strategy of the Noremak Inc. to a great extent.

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Brand Development: The financial education packages that will be delivered by Noremak Inc. are costly and thus poses a burden for the lower and middle-class students. This perceived price affects the brand development of Noremak Inc. thereby affecting brand loyalty to a great extent. On the other hand, there will also be a false reputation on the minds of the students and the parents related to the financial products of Noremak Inc. and thus it will affect the development of the brand to a much larger extent.

Since we will strive to build solid relationships and increase visibility in the communities, then this will help the image of the brand and its development. Furthermore, being actively engaged in the communities will also help to create awareness as well. Nowadays, technology is integrated in almost everything, and so to reach our students, we will utilize the social platforms, coupled with a customer feedback loop to find out what works and what we can improve.

Decision Making: As it has been found that the staff who are associated with Noremak Inc. do not possess adequate knowledge in imparting knowledge to the high school students of the US, the parents and the students will face difficulty in taking the correct decision on whether to enroll themselves in the course (Lusardi, 2019). On the other hand, due to the existence of varied types of political issues, the stakeholders of Noremak Inc. will face difficulty in taking valid decisions for the effective growth and development of the organization.

The company will ensure that we deploy the following models-pragmatist, idealist and altruist when it comes to making decision so that careful analysis of the situation is at hand, rules of the society are adhered to and acting to promote welfare for the wider community. Situations will rise, whereby a set type should only be used, and so since we will promote diversity and creativity, it will be important to bring everything together so that everyone, including the company benefits to fulfill the mission of the company.

Another point that must be highlighted is that decisions will not only come from leadership, but it will be a collaboration of bringing ideas of all employees and weighing them accordingly. This way, the culture of bringing one’s full self to work will be endorsed and the possibility of conducting unethical decisions will be minimal.

Alignment: The corporate strategy of Noremak Inc. will be framed in such a way that the students of any class and creed can get enrolled in the financial education course of Noremak Inc. based on their merit. This can be regarded as a welcoming approach and thus it can be said that the students of all economic classes, races, and gender will try to look at the optimistic features of the course (Beck & Garris, 2019). Further, the employees of the sales division will also be trained in such a way that they should develop the trust of the students and the carers by providing them the correct and valid information only.

            The brand development of Noremak Inc. will be made in such a way that the students can choose their educational packages based on their affordability. As the company can grow considering the quality and the affordable education, the brand development of the Noremak Inc. will be made in a positive way and through valid promises. To check the authenticity of the classes delivered by Noremak Inc., the students can also opt for demo classes based on their requirements.

            The staff who are working with Noremak Inc. must possess in-depth knowledge of the course content and they must not misguide the students. It is the responsibility of the higher authority of the organization to check that the students are not made any false promises so that it becomes difficult for them to take the correct decision in purchasing the financial course of Noremak Inc.

Sustainability: The course concepts that are delivered by Noremak Inc. can be made sustainable if they are digital i.e. password protected. The students of the US can reuse the course content beyond their scheduled course time on payment of an additional fee. On the other hand, the education imparted by Noremak Inc. must be applied based thereby developing behavioral changes among the students. Sustainability can be achieved if this app-based financial literacy can bring changes in the life of the students through imparting them education and helping the company to grow through the word-of-mouth strategy (Rudeloff, 2019).

On the other hand, the brand development of Noremak Inc. can be made sustainable if there is the provision to pay the course fees in installments thereby reducing the burden upon the students and their parents. Moreover, the company can make changes in society only if it employs educated staff for imparting the correct financial education through easy and quick methods. All these aspects will assist in the growth of Noremak Inc. within the stipulated time frame and a specified budget.

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Since the community will have a role to play to contribute to the further edification and impartation of financial knowledge to the students, one way to maintain sustainability is to partner with both not-for-profits and corporate organizations to create a life-long relationship which could increase the brand’s image and impact within the community. In doing so, the students can pass on their knowledge to the younger students at kindergarten level or even youth clubs within the community. This recycle of knowledge will ensure that most people are impacted positively and will be able to better understand and navigate through the complex financial environment us.

Conclusion

            Thus, it can be said that business ethics play an effective role in the sustainable growth of the business. It is the responsibility of the higher authority of Noremak Inc. to adopt developed and improved steps so that the brand development, corporate image, and the decision-making process of the company can be tackled adequately.

References

Bauer, Elizabeth. “What is “Financial Literacy,’ And Why Does It Matter?.” Forbes, www.forbes.com/sites/ebauer/2018/08/13/what-is-financial-literacy-and-why-does-it-matter/#7292382d7710, 2018. Accessed 28 July 2020.

Beck, J. J., & Garris, R. O. (2019). Managing personal finance literacy in the United States: A case study. Education Sciences, 9(2), 129.

Engström, P., & McKelvie, A. (2017). Financial literacy, role models, and micro-enterprise performance in the informal economy. International Small Business Journal, 35(7), 855-875.

Gitman, L. J., McDaniel, C., Shah, A., Reece, M., Koffel, L., Talsma, B., & Hyatt, J. C. (2018, September 18). Trends in the Business Environment and Competition. Introduction to Business. https://opentextbc.ca/businessopenstax/chapter/trends-in-the-business-environment-and-competition/.

Goyal, K., & Kumar, S. (2021). Financial literacy: A systematic review and bibliometric analysis. International Journal of Consumer Studies, 45(1), 80-105.

Junco, Alfred. “How can technology promote financial literacy among youths?.” thriveglobal.com/stories/how-can-technology-promote-financial-literacy-among-youths/, 2019. Accessed 28 July 2020

Lucey, T. (2018). A critically compassionate approach to financial literacy: A pursuit of moral spirit. Education Sciences, 8(4), 152.

Lusardi, A. (2019). Financial literacy and the need for financial education: evidence and implications. Swiss Journal of Economics and Statistics, 155(1), 1-8.

“Rhode Island adds financial literacy education in schools.” Pensions & Investments, eds-a-ebscohost-com.ezproxy.snhu.edu/eds/detail/detail?vid=1&sid=b42d5d0a-6ce8-4188-aa8ae049a3104773%40sessionmgr4008&bdata=JnNpdGU9ZWRzLWxpdmUmc2NvcGU9c2l0ZQ%3d%3d#AN=137433877&db=bsu, 2019. Accessed 28 July 2020.

Rudeloff, M. (2019). The influence of informal learning opportunities on adolescents’ financial literacy. Empirical Research in Vocational Education and Training, 11(1), 1-17.

Smyczek, Sławomir, and Justyna Matysiewicz. “Consumers’ Financial Literacy as Tool for Preventing Future Economic Crisis.” Review of Business, vol. 36, no. 1, Summer 2015, pp.19–33.EBSCOhost, search.ebscohost.com/login.aspx?direct=true&db=bsu&AN=110407669&site=eds-live&scope=site.

Systems, E. (2020, November 11). Ethical Systems.    https://www.ethicalsystems.org/leadership/.

Walsh, John, PhD. “PEST Analysis.” Salem Press Encyclopedia, 2019. EBSCOhost, search.ebscohost.com/login.aspx?direct=true&db=ers&AN=89677606&site=eds-live&scope=site.

Yang, S., Ishtiaq, M., & Anwar, M. (2018). Enterprise risk management practices and firm performance, the mediating role of competitive advantage and the moderating role of financial literacy. Journal of Risk and Financial Management, 11(3), 35.

 

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