Every business organization performs as a composite unit. This assertion means that a business will depend on its other smaller units to promote its bigger unit. In this light, this study believes that the relationship between business governance plan and functional department participation plan is a symbiotic relationship. By analogy, just as how the entire body depends on its smaller organs to function effectively so does the business governance plan rely on the functional department participation plan.
In most cases, a business governance plan underpins the ethical prospects of an organization which are largely emphasized in the vision statement. So, whenever an attempt is made to evaluate the significance of business governance plan in connection to functional department participation plan in an organization, the aim is mainly to look into the ethical components thereof. This study seeks to carry out such an attempt with respect to automotive industry. In particular, it will explore various functions as found in the following departments:
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- (a) human resources
- (b) legal
- (c) finance
- (d) marketing and advertising board of directors.
The study will also identify the political ramifications found in each department. Defining a Functional Department Participation Plan (FDPP) This study believes that automotive industries need to develop effective, realistic and achievable business governance plans that they can use to check and balance the entire operations of the business. Therefore, it would be disastrous to have automotive companies whose departmental functions contradict its ethical foundations. In general, whether in marketing or in legal or in finance or in human resources all these departments must function to promote the ethical vision of the industry.
Since these functional departments consist of individuals who are capable of making personal decisions based on an ethical code of conduct then there is no reason why they should not work towards the specifications of the business governance plan. Vehicle manufacturers and suppliers should be able to identify a systematic functional department participation plan that will assist all its departments to function as a composite whole. As can be seen so far, the functional department participation plan comes out very strongly as a channel towards realization of the business governance plan.
It provides a leeway in all departments so that they might act in accordance to the main objective of the organization’s ethical conduct. Even before delving into further research on the definition of FDPP this study can give its own stance on the same. FDPP is a mechanism used by an organization to achieve a common goal within a multifaceted environment. Or better still, FDPP is a strategy aimed at re-channeling all the departmental functions towards the full realization of the business governance plan.
The functional department participation plan design identifies the functional departments that ought to participate in a business governance plan as well as detailing their roles and the contributions of those roles (Microsoft Corporation, 2005). It is also worth noting that the functional department plan design is an apply-all principle (Microsoft Corporation, 2005). A feasible corporate governance framework that fosters transparency and efficiency is that which consistently operates within legal requirements and outlines responsibilities of various supervisory and managerial levels in automotive industries (Microsoft Corporation, 2005).
Identifying the Functional Departments within the Automotive Industry This study wishes to reiterate that the functional departments point to an organization’s business governance plan. The departments analyzed in this plan encompass human resources, legal, finance, marketing and advertising and board of directors. As mentioned earlier, a business governance plan provides an ethical framework to guide the leaders of a corporation (Watkins, 2004). Consider the following arguments: “Human resources department manages organizational policy and operation issues including the personnel activities” (Cloves, 2010).
But it must be the case that this role culminates in the business governance plan. Therefore, this study can conclude that the human resources department provides an ethical framework to guide the leaders of a corporation. The same case applies to the legal department; for instance, legal function performs whistle blowing and ensures that the industry’s internal and external conducts comply with relevant legal requirements (Huang & Su, 2009). Therefore, the legal department, in its whistle blowing must ensure that it provides an ethical framework to guide the leaders of the industry.
The finance and marketing and advertising departments are not an exemption to this end. Finance department, for instance, directs, plans and governs the organization’s financial issues management ; the marketing and advertising department serves as the brand winner for the organization by conducting market research, development of advertising concepts and selling of products (Smith, 2004). Therefore, in their functions they must provide an ethical framework for the leaders. The function of the board of directors is the most fundamental function in an organization.
It serves as the benchmark for all other departmental functions. It plays the most vital role in fostering good corporate governance (Davies, 2008). Therefore, it monitors the functions of other corporate departments to ensure that they comply with the set ethical standards (Monaghan, 2005). All said and done, the following section will deepen more on the roles of these departments and the significance of those roles to the business governance plan and with a bias to automotive industry. Identifying the Department’s roles and the Significance of those Roles to the Plan
What constitutes an effective governance plan? The code of ethics for an organization reflects five values namely: (a) safety (b) care (c) integrity (d) fun and enthusiasm (d) passion (JetBlue, 2005). If the departmental functions in automotive industry establish a value-based platform on the five values then it will inculcate principles of cost-cutting, innovation, inter-subjectivity, honesty and transparency and fun in the fabric of their plan. According to Baum (2004) transparency entails truthfulness, honesty and openness on business dealings.
Moreover, organizations should focus more on being right not just winning (Higgins, 2005). This also applies to automotive industry. There is a growing rate of globalization in the automotive industry today. The development of technology and communications makes the function of human resources even more flexible and vital. Automotive industries are now striving to establish dynamic networks to replace bureaucratic and hierarchical structures to cope with the changing environment. Additionally, the human resource department strives to minimize possible unethical conduct that can jeopardize the industry’s governance plan.
In order to achieve this end, the human resources department can consider decentralizing the industry’s structures so as to promote effective decision-making and accountability vertically and horizontally with staff members. Evidently, most human resources department have shifted their roles from operational personnel to that of strategic human resource management in order to promote competency and adequate training among employees (Baron, 2010). Competency in automotive industry is a big concern today. Remember that, unskilled workers will never deliver quality products to the consumers.
It is an unethical for automotive industries to have unskilled mechanics or low quality machinery and vehicles that would frustrate the expectations of their clients. This is exactly one of the commitments of human resources department. In fact, low quality products affect the marketing and advertising department which cannot afford to lose loyalty of its clients. Human resources department assist to define major transactions for the industry. In the vertical sense, they assist line managers acquire appropriate knowledge for required tasks (Cloves, 2010).
By managing the industry’s policy, operations, and personnel activities the human resources department creates an effective ethical climate. By designing adequate training programs the human resources department supports the actions of the leaders in practicing good corporate governance (Hudson & Bourne, 2001). The legal department monitors the industry’s social responsibility to ensure that it complies with the laws and regulations. It should also constantly evaluate the managerial integrity and efficiency as well (Huang & Su, 2009).
This study believes that if automotive industries act in contravention to the law then they are unethical in their dealings. Through whistle blowing the legal department helps to reduce and eradicate opportunities of industry’s wrongdoing (Huang & Su, 2009). Automotive industries should emphasize less on goal attainment and emphasize more on legitimate procedures and regulations. Otherwise, industry wrongdoings adversely impacts on its governance plan by jeopardizing the reputation of the organization and brand image (Johnson, 2009).
Whenever, the reputation and brand image has been spoiled what suffers most is the marketing and advertising department. This is because it affects its quest to win more and more clients. The legal department studies the laws and advises the leaders on how to prevent wrongdoings. It uncovers any possibility of illegal and unethical behavior in the automotive industry (Huang & Su, 2009). The finance department under its departmental subdivisions, for instance, internal audit department and external audit department, guarantees transparency and accountability.
This study believes that a business governance plan aims at cost management, profitability and revenue growth. Automotive industries should have competent financial departments with highly skilled team of finance and accounting officers capable of preparing accountable financial reports (Eaton, 2005). Internal audit department, for instance, help the management improves its controls, processes and risk management. Moreover, to enhance a sound business governance plan, the internal audit department, the committee of auditors including the external auditors must work as a team to ensure quality work and mutual respect (Eaton, 2005).
Automotive industries cannot provide quality reports if they lack accountable financial function. Marketing and advertising department will place an automotive industry above others. It creates competitive advantage that places the industry’s product in such a manner that consumers will want to buy it (Smith, 2004). It also creates an effective customer feedback model which monitors the satisfaction of the clients. Essentially, marketing and advertising department ensures that the industry delivers only quality products.
It is incumbent upon the board of directors to create a statement of values that serve as a platform for the organization’s action guidelines (Davies, 2008). It is also important to note that if automotive industries fail to implement an effective statement of values, its employees will act to serve their selfish interests instead of stakeholders’ interests (Davies, 2008). Irrational decisions executed by dishonest and negligent board of directors, for instance, unprecedented executive compensation, can upset the employees and destroy the industry’s ethical environment (Maggioni, et al.n. d. ). This study believes that the best way to maintain an effective governance plan in automotive industry is by creating trust and transparency between the employees and the board of directors. Moreover, the governance plan requires the board to keep a balance between the shareholder’s rights with the management. The board of directors contributes to the governance plan by not only steering the industry in the right direction but also ensuring that everything operates within feasible directions (Davies, 2008).
Identifying each Department’s Political ramifications This section will illustrate some of the political consequences found in each department mentioned above. For instance, it will examine the political outcomes in the human resources department or legal department and so on and so forth. This study believes that if automotive industries fail to meet the objectives of their business governance plan, they not only put the success of the business at jeopardy but also they affect their political outcome.
So, it can be argued and justifiably so that the better the business governance plan the more positive the political ramifications will be; and on the other hand, the poorer the business governance plan the more negative the political ramifications will be. The human resources department ensures that employees enjoy the right to information and consultation. Most governments safeguard this requirement under the employment law. Therefore, given that automotive industries are expanding rapidly there needs to be a better mechanism that safeguards the employees’ rights, for instance, through trade unions.
The legal department implements every bit of instruction directed by the government. The marketing and advertising department is a key factor in the expansion of automotive industries. Penetration of new market opportunities should be a means to improve poorer regions as well. Moreover, this department must ensure that only quality products get to the consumers. Normally, quality products are those that meet the standards laid out by the government. The finance department should help to achieve low-cost reductions to enable middle-income earners acquire automotive products without strain.
Most governments implement stiff tax policies on automotive related products such as fuel and machinery. To balance this, the finance department can help in cutting production costs which will then lower the prices of the already finished products. The finance department must come up with a strategy to exploit the possibility for cost-reductions especially in developing countries. Overall, the board of directors ensures that everything contributes to the political well being. The government requires that industries fulfill their social responsibility (Waller & Lanis, 2009) and more so, protect the rights of the shareholders.
Conclusion This study has established that functional departmental organizational plan culminates in the business organizational plan. Once this has been achieved a business can be rest assured that its departmental functions fulfill intended ethical standards. The human resources department should eradicate unethical conduct among employees. Additionally, it identifies training programs geared towards improving their skills so that they might provide more quality services. The legal department safeguards an automotive industry against wrongdoings. The finance department promotes transparency and accountability.
The marketing department ensures that only quality products get in the way of the consumers. The board of directors has an overall role to ensure that all other departments function with the given standard. They provide a statement of values that become the guide for the entire industry’s course of action. Also, this study has indicated that the more effective a departmental functions is the more positive will be its political ramifications and the vice versa.
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