Business Ethics Essay

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Business Ethics Essay
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  • University/College:
    University of Arkansas System

  • Type of paper: Thesis/Dissertation Chapter

  • Words: 1189

  • Pages: 5

Business Ethics

Aim

The aim of this unit is to introduce learners to the concept of business ethics and to examine its relevance when considering business objectives and responsibilities.

Unit abstract

Most businesses today are concerned about the impact of their activities on the business environment. Ethical concerns and greater consumer awareness have resulted in many businesses promoting their social values to ensure competitive advantage. Business ethics embraces corporate social responsibility and ethics relating to accounting practices, marketing, human resource management, and production.

In this unit learners will examine the theoretical roots to the background and growth of business ethics. They will look at the different types of ethical issues a business needs to consider and how the development of ethical values impacts on business behaviour. It is important for learners to appreciate how taking an ethical stance affects businesses both internally and externally, including the effects on stakeholders. Learners will explore the social implications of business ethics for a wide range of business activities that affect the organisation itself and the external environment. This will include the ethical stance behind topical issues such as whistle blowing, employment practices, advertising to children, environmental awareness and using new technologies such as genetic modification of food.

Learners will also examine how an individual’s ethical stance impacts on the moral relationship between employer and employee, as well as considering the contractual responsibilities of both parties. This unit will give learners the opportunity to research how a business responds to ethical concerns and assess the extent to which its activities affect its behaviour, whilst ensuring business objectives are met.

Learning outcomes

On successful completion of this unit a learner will:

Understand different ethical perspectives in business

Understand business objectives from an ethical perspective

Understand ethics in workplace relationships

Be able to assess a current ethical issue in a business.

Unit content

Understand different ethical perspectives in business

Ethical perspectives: deontological and teleological ethical theory; developments from these early approaches e.g. utilitarianism and other consequential approaches; early contributions of Kant and Mill; absolute and relative ethics; Institute of Business Ethics

Operational activities: definitions of business ethics; ethical activities; values of businesses; professional ethics

Ethical issues: corporate governance; corporate social responsibility; environment; sustainability; human rights; corruption; trading fairly; legal and regulatory compliance; business practices; working conditions; individual ethical responsibilities

Understand business objectives from an ethical perspective

Objectives: corporate governance; corporate social responsibility; environment; sustainability; human rights; corruption; trading fairly; legal and regulatory compliance; business practices; communicating ethical code

Stakeholders: stakeholders (owners, employees, customers, suppliers, competitors, citizens); conflicts of interest between stakeholder groups e.g. shareholders versus environmentalists

Implications: adapting business behaviour; responding to ethical pressures; implementing ethical practices; influence of stakeholders and pressure groups; impact on competitiveness; reputation; public image; ethical trade; value-added; complying with relevant legislation and codes of practice e.g. UK law, EU law; UN Declaration on Human Rights; UN Global Compact; economic activity e.g. location

Understand ethics in workplace relationships

Working relationships: contractual responsibilities; moral obligations in employer/employee relationships; whistleblowing; the psychological contract; good practice in equal opportunities employment; organisational integrity; working conditions; individual ethical responsibilities; individual ethical behaviour

Be able to assess a current ethical issue in a business

Issues: corporate social responsibility; globalisation; cultural imperialism; ecology; environment; fair trade; corruption; animal testing; child labour; carbon footprint; sources of timber; outsourcing; personal attitudes; whistle blowing; contribution of business to the community; ethics in sales and marketing e.g. spamming, shills, product placement, green washing; ethics in intellectual property e.g. software piracy, counterfeiting, peer-to-peer file sharing

Implications: global e.g. environment; corporate e.g. legal and regulatory compliance, policies and practices; individual (employee, consumer)

Learning outcomes and assessment criteria

Learning outcomes
Assessment criteria for pass

On successful completion of
The learner can:

this unit a learner will:

1
Understand different
1.1
explain the background and development of ethical perspectives in theoretical ethical approaches business
1.2
compare and contrast absolute and relative ethics

1.3
explain the ethical issues which can affect the operational activities of a business

LO2
Understand business
2.1
explain how business objectives are affected objectives from an by ethical considerations ethical perspective
2.2
evaluate the implications for a business and its stakeholders to operate ethically

LO3
Understand ethics in
3.1
assess the role of the company acting as moral workplace relationships agent

3.2
analyse the development of mechanisms for achieving employee involvement and empowerment

LO4
Be able to assess a
4.1
research a current ethical issue affecting a current ethical issue in selected business a business
4.2
report on how the business could improve the ethics of their operations whilst meeting objectives and ensuring good employer/employee relationships

4.3
design a suitable ethical code.

Guidance

Links

There are links between this unit and the management units within this specification.

The unit also links with the National Occupational Standards in Management and Leadership.

Essential requirements

For this unit learners must select an organisation and research its approach to ethical issues. They will require access to websites, newspaper articles and journals in order to conduct their research. Topical case studies will be needed to facilitate group work and discussions.

Employer engagement and vocational contexts

Centres should develop links with organisations such as local businesses, pressure groups and charities that can provide guest speakers to talk on various aspects of business ethics. The centre as an organisation can be a valuable resource both for guest speakers and as a vehicle for topical case studies related to ethical issues. Learners may be able to access information from their part-time jobs related to the organisation’s ethical policies.

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Business Ethics Essay
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  • University/College:
    University of California

  • Type of paper: Thesis/Dissertation Chapter

  • Words: 1203

  • Pages: 5

Business Ethics

This paper will focus on Benji Watson, a graduate from the Liberty University MBA program and his recruitment by a corporation that sells various vitamins, health foods and health supplements; New Gen Health Sciences. The case study that was presented provides us certain information that Benji has either gotten from his recruiter or from his own personal research. After a weekend of being at the company introduction event, Benji is presented with a dilemma as to whether to accept the lucrative offer New Gen has presented him. Throughout this paper I will take a closer look as to whether I believe Benji should or should not accept his contract offer from New Gen. Integrity

One of the most important factors when looking into joining a corporation is to take a look from the top and see how the CEO runs his corporation. Benji has already had several red flags raised as to the business practices that the CEO of New Gen employs throughout his corporation. Mary C. Daly (2003) describes how a Harvard Business School case study quoted an Enron official who gave a description of Jeffrey Skilling’s decision-making process as follows: “It was all about creating an atmosphere of deliberately breaking the rules” (p. 269-270). She goes on to say that in a similar situation, Salomon Brothers encouraged extreme risk taking in the pursuit of profits that sometimes were not within the ethics or morals of the individual (p. 270). A severe lack of integrity within these corporations ultimately led to their demise.

Unfortunately, it seems as if the CEO of New Gen is headed down this same path in his pursuit of profits. The CEO of New Gen claims to be a person who cares about people and making their lives better, yet he displays a total lack of integrity when he referred to the company’s customers as “fat, lazy, lethargic Americans.” Benji needs to ask himself, is this the type of boss I want to work for? To make matters worse and to once again bring the CEO’s integrity into question, he harshly asked another potential employee whose infant child was crying to leave the room as to not bother the others who were in the room. I would caution Benji to take into consideration these actions when he makes his decision.

Julia Sferlazzo (2012) describes two types of business ethics theories and the debate that focuses on whose interest’s managers should consider when they are making decisions (p. 772). The two theories, shareholder and stakeholder theories respectively, both take a different approach in how they go about implementing their business ethics. The shareholders theory basically involves when the only duty of the manager is to pursue profit and that the only obligations they have are to act within the confines of the law. This theory was favored in the early 1900’s but over the past several decades this theory has fallen out of favor in terms of government regulation due to the corruption and corporate greed. In the stakeholders theory, a balance is placed on what is in the best interest of the shareholder, employees, the community, and as society. This theory of professional ethics is accepted the most amongst academics (Sferlazzo, 2012, p.772-773).

Based on the theories I have outlined above, I believe that New Gen more closely falls in line with the shareholder theory, and one that could lead down the path of corruption. Although New Gen is not ethically doing anything illegal, they are falsely marketing their company as a leader in ethics when in reality they are only in pursuit of the maximum amount of profit. “For the love of money is the root of all evil; which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows. But though, O man of God, flee these things; and follow after righteousness, godliness, faith, love, patience, meekness” (Timothy 6:10-11, NIV). Strategic Ethics vs. Real Ethics

In Dobson’s (n.d.) critique, he states several times that although a business’ actions may appear moral, it is clear that the motivation can sometimes only be material. This question is are these companies only saying they are running an ethical business as motivation to attract investors or are they taking action on what they are saying by their real ethics they are imploring. When Benji was conversing with his recruiter about New Gen’s industry leading ethics code, the recruiter basically told him that it was a strategy that the company had to say in order to ensure government regulations were met and they could entice investors. This should be a red flag for Benji that this company may be employing a strategic ethic instead of real ethics in order to attract new investors rather than doing the right thing. These dishonest business practices along with not being able to adhere to real ethics and using them only to their strategic advantage will eventually catch up to this company and its financials will struggle if these practices continue.

“Beware of false prophets who come to you in sheep’s clothing but inwardly are ravaging wolves” (Matthew 7:15, NIV). Benji would be wise to heed the advice that Jesus gave to Matthew when advising him on how to enter the kingdom of heaven. Spiritually, Benji has to make a conscience effort to continue to research and investigate on whether this is a wise decision for him to accept a job from a potential dishonest corporation. Is New Gen a corporation that values its consumers and employers both ethically and spiritually or are they a corporation that only uses their “industry leading ethics code” as a strategic ploy to attract their investors? These are the questions Benji must consider when deciding on accepting this contract offer.

The Decision
From both a spiritual and an ethical perspective there is no way that I would advise Benji to accept this job offer. Although this job appears lucrative from the outside looking in, upon further research Benji should realize that this company’s foundation is based upon furthering the profit for the CEO and not taking into consideration of the stakeholders. Furthermore, New Gen is a company that is dishonest and shows a total disregard to the integrity that a reputable business would display. In no way would I advise Benji to accept this job offer.

References
Daly, Mary C. (2003). INTEGRITY IN THE PRACTICE OF LAW: TEACHING INTEGRITY IN THE PROFESSIONAL RESPONSIBILITY CURRICULUM: A MODEST PROPOSAL FOR CHANGE. Fordham Law Review, 72, 261-277. Dobson, John (n.d.). Virtue Ethics as a Foundation for Business Ethics: A “MacIntyre-Based Critique” Retrieved May
15, 2013, from http://www.stthomas.edu/cathstudies/cst/conferences/antwerp/papers/dobson.pdf Sferlazzo, Julia (2012). Learning Legal Ethics From MBAs: How a Comparison of Legal and Business Ethics Could Promote Ethical Professional Behavior. Georgetown Journal of Legal Ethics, 25, 769-786.

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Business Ethics Essay

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Business Ethics Essay
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  • University/College:
    University of Arkansas System

  • Type of paper: Thesis/Dissertation Chapter

  • Words: 2122

  • Pages: 8

Business Ethics

Business ethics is an important aspect of any organization, and all successful organizations adhere to business ethics. Business ethics ensure that organizations adhere to moral and ethical principles as they undertake their day to day operations. Business ethics ensure that organizations and employees conduct business while following ethical principles. It also enables organizations solve challenges they experience while following moral principles.

Corporate social responsibility is a component of business ethics and it involves a commitment by organizations to follow ethical principles while at the same time contributing to social and economic development to both their stakeholders as well as the neighboring communities (Goree 43-47). Corporate responsibility entails following regulations and rules which govern specific industries and fields as well as empowering local communities through economic assistance. Business ethics has been linked to long term success by businesses which have operated over time.

It is important to analyze the various ethical issues which may affect organizations in order to understand how to cope with ethical challenges. In order to do this effectively, an organization which has a corporate or ethical responsibility to a specific market or region should be studied and various issues which affect it analyzed. This will enable us to make recommendations on how businesses should deal with ethical challenges which face them and the importance of taking up ethical responsibilities. This paper will focus on Enron Corporation, a firm which faced one of the largest fraud scandals ever witnessed in history.

The role of ethical and corporate responsibilities by companies on stakeholders will be analyzed with regard to this company and appropriate recommendations made at the end of the paper. History of Enron Enron Corporation was founded in 1985 after two natural gas companies, Internorth and Houston gas merged. It gradually grew and began selling electricity to the America market. After deregulation of the natural gas market, Enron was able to sell gas at a higher price, which translated to higher profits. Although local governments and producers complained about the high prices, Enron and its competitors was able to prevent regulation hrough lobbying (Collins 25-31).

In the early 1990s, Enron was the biggest natural gas merchant in North America and it had earnings of over $120 million before tax as at 1992. Enron later embraced the diversification strategy and it engaged in operating pulp, gas pipelines, paper plants, electricity plants, broadband assets and water plants, and this led to a huge increase in both market share and profits made. This also led to an increase in share price with Enron’s share price increasing by more than 300% between 1990 and 1998.

However, the company began facing financial difficulties soon after and these were linked to several fraudulent schemes. The financial statements of Enron were non-transparent and could not reveal its finances and operations to analysts and shareholders. In addition, its business model was very complex and this forced accountants to alter the company’s balance sheet to reflect a positive performance. This falsification of documents continued for many years until it became strongly rooted to the company. The overstatement of income and understatement of liabilities eventually led to the collapse of the company due to bankruptcy in 2001.

Ethical responsibility of Enron to stakeholders As a large corporation, Enron had a responsibility to all its stakeholders who included shareholders, government, suppliers, creditors, debtors and the local community. Enron is a large company which has an impact to these stakeholders and it has an ethical responsibility to undertake its operations while following a code of ethics. Companies have a responsibility to shareholders since they have invested in the company to realize wealth. The government also relies on companies for collection of tax, while creditors expect their payments after delivery of services or goods.

In addition, firms have a social responsibility to local communities and they usually implement corporate social responsibility programs which are geared towards empowering these communities (Dharan & William 101-103). Before the firm collapsed, it used to donate millions of dollars annually for several causes it believed in and some of these included cancer research and environmental conservation. As a large corporate firm, Enron Corporation also had a corporate social responsibility towards environmental conservation.

Large corporations such as Enron have this ethical responsibility since they greatly affect the communities and environments where they operate. Enron has a responsibility to conserve the environment since it is an energy producer and its products have an effect on the environment. The firm therefore strived to develop products which had less adverse effects to the environment. In addition, Enron invested in technology which reduced environmental pollution during the manufacturing stage of production. This made the firm accumulate goodwill from consumers over the years, leading to massive growth and profitability.

However, by indulging in corporate fraud and eventually going bankrupt, this corporation failed in this ethical responsibility. Enron’s management tolerated unethical practices such as corporate fraud and this led to the loss of goodwill by consumers and the eventual collapse of the firm. Its collapse affected all stakeholders including the local community. Employees lost jobs, shareholders lost wealth, the government lost its tax revenue and the local community was forced to close many projects which were being funded by Enron Corporation.

It is therefore important to analyze the Enron fraud scandal, understand why it occurred and give recommendations on how similar cases can be avoided in future. Enron fraud scandal As mentioned above, Enron collapsed in 2001 due to a series of fraudulent acts which involved financial misrepresentation and fraud. The accounting department used several accounting policies and procedures which were intentionally meant to hide the real financial position of the company.

This trend continued over several years and it began raising suspicion after the company hid its balance sheet from the public yet it was a public corporation. Soon after the CEO resigned and admitted that part of his reason for his resignation is the poor performance of Enron. After a few months, the public lost confidence in the firm and its share prices fell drastically. This led to a gradual process which eventually made Enron collapse. After Enron collapsed, shareholders lost over $70 billion in assets. Over 20,000 employees also lost their jobs as a result of the collapse of Enron.

In addition, creditors lost hundreds of millions of dollars in debt and most were unable to recover it, since sale of its assets was inadequate to cover the debts (McLean &Peter 45-49). In addition, several charities which were being funded by Enron as well as several environmental protection groups which received millions of dollars annually through corporate responsibility programs also lost funding. Causes of Enron’s collapse Management culture The management culture present at Enron was one of the factors which caused its collapse since this culture encouraged fraud and greed amongst the management.

Instead of the management creating wealth through ethical conduct, it intentionally allowed fraud and misrepresentation in financial accounts as a means of maintaining the share value. The CEO and senior managers knew of the company’s losses but instead of revealing this to stakeholders, they chose to use misrepresentation. When the top management condones misrepresentation and fraud, other employees view this as tolerable within the organization and they too are likely to engage in such unethical acts. Accounting problems There were a series of problems in the accounting department which caused the collapse of Enron.

Enron adapted several accounting systems and policies which were irregular and which misrepresented the company’s financial position (Racine 89-93). Enron had an ethical responsibility to stakeholders to give an accurate picture of the firm’s financial position. The firm’s accountants intentionally hid losses which the firms was making and they made Enron appear to be a profitable firm. The firm also hid its financial accounts from the public even though public corporations are required to make their financial statements available to the public.

Poor leadership Leadership plays an integral role in achieving long term profitability of firms as well as the realization of a firm’s core objectives. There are various leadership styles which organizations implement and one of the most effective is the participative leadership style. This is a leadership style in which employees participate in decision making and it has proved to increase employee motivation. When applying a certain leadership style, leaders should lead by example if they are to motivate employees to follow what the organization stands for.

Leaders should possess integrity if they are to motivate employees to be ethical. In the Enron scandal, leaders were part of the stakeholders participating in the corporate fraud, and this made employees lose faith in their ability as leaders. It also encouraged employees to further perpetuate fraud since it became “acceptable” after leaders began engaging in it (Salter 55-58). Analysis of causes Analysis of causes of the collapse of Enron with regard to ethical responsibility should be undertaken in order to understand how corporate fraud should be prevented in future.

As earlier discussed, Enron had a responsibility towards its stakeholders, including the local community. Enron Corporation was expected to create wealth for shareholders, pay salaries to employees, honor payments to creditors, pay tax to the government and support the local community. It failed in all these responsibilities after it collapsed due to mismanagement. Ethics ensures that organizations run their affairs with integrity and with a willingness to empower the general public through creation of wealth (Cruver 66-73).

However, for any organization to have integrity, its leadership should demonstrate ethical conduct. The top management should implement and follow the code of ethics if other employees are to do so. Enron management was aware of the unethical practices which were practiced by the accounting department, but it did not take any steps to discourage the vice. This made the organization fail in its responsibility to uphold ethics when carrying out its operations. It also encouraged subordinate employees to propagate fraud, which eventually led to the collapse of the firm.

The public lost faith in the company’s ability to achieve profitability in the long run after the corporate fraud scandal was highlighted by the media. This shows that all companies have to follow ethical rules of conduct if they are to maintain public confidence and achieve profitability in the long run. Conclusion and recommendation Corporations have an ethical responsibility to their various stakeholders, including the local community. It is important for them to uphold integrity when running their affairs in order for them to achieve their objectives to these stakeholders.

Corporate ethics and social responsibility are two important aspects which corporations and organizations in general should observe if they are to achieve long term profitability. Enron collapsed due to neglect of these two core principles. It collapsed after the management allowed fraud and misrepresentation by the accounting department. In order for organizations to discourage acts of fraud and misrepresentation, the first step should be to ensure that they hire employees with integrity.

When recruiting employees, they should carefully analyze their histories and resumes to understand the principles a person stands for. This will reduce the probability of employees committing unethical acts such as corporate fraud. The second step should be to ensure that the organizational culture strives to achieve the goals and objectives of an organization. The organizational culture should represent principles the organization stands for and these should include integrity and honesty. In addition, the practices in such organizations should be guided by a code of conduct.

Once these structures are in place, enforcement should be done by example and the top leadership should follow similar ethical conduct expected of employees. Enron collapsed due to reluctance by the management to observe ethical conduct while carrying out their activities and this encouraged many employees to follow suit and commit fraud. Finally, random audits should be carried out by both corporate managers as well as third parties in order to identify any unethical practices early enough and prevent the collapse of companies. If the Enron scandal was identified early, actions may have been taken to prevent its collapse.

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Business ethics Essay

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Business ethics Essay
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  • University/College:
    University of California

  • Type of paper: Thesis/Dissertation Chapter

  • Words: 429

  • Pages: 2

Business ethics

The lecture of Father Roa last February 16 is an introduction to Business Ethics subject. The discussion included businessman’s myth about business ethics, the relationship of ethics and business, moral reasoning in business, the theory of profit motive, and business ethics definition. These given me deeper understanding of the subject “Business Ethics and Social Responsibility”. Some of businessman’s myth about business ethics includes: Ethics is a personal affair and not a public debatable matter; Ethics and business do not mix; This in business is relative; Good business means good ethics; and Business is war.

These myths will remain a myth. The relationship of ethics and business which cannot be separated from one another. Ethics is an unwritten law, written in the heart of men. Business is an integral part of the human society with activities must also be examine from the moral perspective. In business, what is legal may not be necessary be moral. Today, the trend is to train managers to maximize profits and to quantify the operation of business. With moral reasoning in business, ethical issues and problems affecting the organization must be solved by the manager. Always judge the action based on an ethical principle.

A good moral standard will be necessary have a good for me and for everyone, must be objective and not subjective, and when violated bring about feelings of guilt, share and remorse of conscience. The assumption of profit-motive is that it is an ethical issue in business and operates within the framework of freedom and structure of the business itself. There are two sides of profit-motive, good and bad. The good side is that profit-motive motivates people to do something meaningful, promotes ingenuity and cleverness in running a business, makes people productive and generates potential capital for business.

If here is a good side, bad side also exist that includes promoting rivalry among competition, focus on only making money, and promote self interest. There are ethical considerations of profit-motive in business. The earning profit is a good and valid activity in business however, making excessive profit totally wrong. The teachings of the Catholic Church do not totally condemn profit as part of the business activity. In the end, business ethics was defined as study of what is right and wrong human behavior and conduct in business. This is a study of perception of people about morality, moral norms, moral rules and institution in business.

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Business Ethics Essay

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Business Ethics Essay
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  • University/College:
    University of California

  • Type of paper: Thesis/Dissertation Chapter

  • Words: 316

  • Pages: 1

Business Ethics

Fred, a 17-year employee with Sam’s Sauna, was fired for poor job performance and poor attendance, after accruing five disciplinary penalties within a 12-month period under the company’s progressive disciplinary policy. A week later, Fred told his former supervisor that he had a substance abuse problem.

Although there was no employee assistance program in place and the company had not been aware of Fred’s condition, their personnel director assisted Fred in obtaining treatment by allowing him to continue receiving insurance benefits and approved his unemployment insurance claim. Fred subsequently requested reinstatement, maintaining that he had been rehabilitated since his discharge and was fully capable of being a productive employee. He pointed to a letter written by his treatment counselor, which said that his prognosis for leading a “clean, sober lifestyle” was a big incentive for him.

Fred pleaded for another chance, arguing that his past problems resulted from drug addiction and that Sam’s Saunas should have recognized and provided treatment for the problem. Sam’s Saunas countered that Fred should have notified his supervisor of his drug problem, and that everything possible had been done to help him receive treatment. Moreover, the company stressed that the employee had been fired for poor performance and absenteeism. Use of the progressive discipline policy had been necessary because the employee had committed a string of offenses over the course of a year, including careless workmanship, distracting others, wasting time, and disregarding safety rules.

Questions:

1) Should Fred be reinstated? 2) Was the company fair to Fred in helping him receive treatment? 3) Did the personnel director behave ethically toward Fred? 4) Did he act ethically for his company? 5) Would it be fair to other employees to reinstate Fred?

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  • University/College:
    University of Chicago

  • Type of paper: Thesis/Dissertation Chapter

  • Words: 810

  • Pages: 3

Business Ethics

What is ethics? What are some common ethical types? Why do business people need it? Can ethics be taught to people? Ethics is a study of morality, stems from the ancient Greek “ethos” meaning custom or habit. It is a study of theories concerning what is good and evil in human conduct. There is no particular set of laws defining what is ethical and what is not, because there is no right or wrong answer. The second sense of ethics speak of “codes of ethics”, which are a set of rules serve as guidance to people, often in fields of professions such as business or medical.

Ethical contrasts with unethical, which goes against the codes of ethics. There are several ethical theories in Western philosophy. Many of them look at the fruits of one’s action – categorized under Consequentialism, while other theories uphold one’s right and duty, which is Deontology. Consequentialism pertains to cost and benefits. It deals with the results and consequences of performing or not performing an action. For example: If war brings more good (money, oil, labor) than bad (casualties) then it is ethical. Some consequentialist theories are utilitarianism and ethical egoism.

Utilitarianism, according to Bentham and Mill, the right action is which creates the greatest good for the greatest number. People should ask what action would promote the greatest amount of happiness for people who are affected. For example: a utilitarian would say euthanasia is ethical if that would bring satisfaction to the suffering patient and financial relief to the family. Ethical egoism, according to Ayn Rand, says we should do what is purely in our best interest, as opposed to altruism. It promotes one’s well-being above others.

Meanwhile deontology pertains to rights, duties or obligations. It concerns the morality of the action that is being performed (or not performed) rather than the results deriving from said action. In Kantian deontology, he promotes the Golden rules (don’t steal, don’t lie, don’t commit suicide) which are absolute rules that one must follow no matter what. Therefore it would be unethical to steal food even if it is for a dying person. In Lockean deontology, John Lock believes each individual is entitled to natural rights, such as right to live, right to freedom, right o pursue happiness, ect.

Another theory is virtual ethics, which is similar to Confucianism, in that a person’s virtues are habits and characteristics that one exhibits. Business people need ethics because it helps prevent malpractices and corruptions. Business practitioners should refer to business codes of conduct as a guide to maintain good business practices that help safeguarding customer confidence, rights and satisfactions; protecting employees and shareholders’ interests and legal rights; and upholding healthy competitions among businesses.

According to Socrates, ethics are what people ought to do and it can be taught. Psychologists also argue that a person’s ability to deal with moral issues is not formed since birth but develop gradually. I personally think a person’s moral can be shaped and that ethics should be taught, because without it we are left with a generation full of confused individuals whom are unable to comprehend and decide what right and what is wrong. That said, ethics should not be forced on people but should only serve as a guide and advisor.

Because there is no uniform set of rules for ethics, it is subjective to the psycho-demographic and geographic of the teachers. A new learner should be given space to assess and confirm what he believes is right and wrong for himself. 2/ What is an argument? What makes it valid/invalid, sound/unsound, good/ bad, “true”? An argument is a collection of statements or propositions, including premises and conclusions, in an attempt to persuade another that the conclusion is true. The premises are intended to provide support and evidence in favor to the speaker’s stance, and in some cases they don’t success.

There can be an indefinite number of premises, while there needs to be at least one conclusion. Conclusions are statements about the point the argument is trying to make. An argument needs to base on logic, in order to avoid logical fallacies (such as slippery slope argument) which make an argument bad, invalid or unsound. An argument is valid, or colloquially speaking, is good if the premises give logical and true reasons to prove that the conclusion is true. It is impossible for the premises to be true and the conclusion false, or if the conclusion follows from the premises in a logical way.

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  • University/College:
    University of Chicago

  • Type of paper: Thesis/Dissertation Chapter

  • Words: 1015

  • Pages: 4

Business ethics

In the past there have been several cases in the business environment related to the practices of accountants and auditors who have violated the trust and confidence of public. A number of researches have been conducted to find the potential factors resulting in unethical, biased or inappropriate decision making and judgments by the professionals. The aim of this paper is to review two academic articles and conclude on the reliability of the claims and assertions made by the authors.

The research paper of Pflugrath, Martinov-Bennie &ump; Chen (2007) aims to analyze the impact of organizational codes of ethics on the accountants’ and auditors’ judgments and professional decisions making skills. The research is conducted on a sample of 112 professional accountants and auditing students and resulted in indicating that the codes of ethics positively influence the judgments of professional accountants but does not affect the students’ judgments.

On the other hand, the paper by Shafer, Morrid &ump; Ketchand (2001) is based on the research of the professional auditors and the impact of their personal values on their ethical judgments and behavioral intentions. The study concluded that personal values do not affect the ethical considerations and judgments of professional auditors. However, the knowledge and the understanding of moral intensity have an impact on the judgments abilities of the professional accountants.

Pfflugrath, Martinov-Bennie &ump; Chen (2007) conducted the study basing their discussion on the new International Standard on Quality Controls 1’s (ISQC1) requirements for all organizations and accounting firms to implement policies and regulations which support the ethical and technical independence of the professional accountants. “The presence of a code of ethics appears to have a significant influence on the quality audit judgments of professional accountants’’ (Pfflugrath, Martinov-Bennie &ump; Chen, 2007).

In terms of aggressive client preferences, the code of ethics may help in better judgment by the professional auditors and accountants. In contrast Shafer, Morrid &ump; Ketchand (2001) suggest that in case of client’s pressure on aggressive financial reporting, “auditors’ ethical behavior influenced by economic or utilitarian considerations”. Shafer et. al. , (2001) suggest that strong organizational norms should result in the standardization of behaviors. In this regard, the results of Pflugrath et. al.

(2007) may be judged as fairly consistent that organizational codes of ethics may help in ethical decision making of employees and professionals in auditing and accounting fields. Unitary codes of ethics may help in standardization for the accounting and auditing professionals and may result in similar findings for the similar scenarios or situations that prevail in different companies or businesses. Pflugrath et. al. (2007) gives arguments which are more persuasive and compatible with the existing literature.

The research methodology of both the papers provides reasonable assurance of the validity of their judgments, however, Shafer et. al. , (2001) has weakness of the homogeneity of the values of the sample which is the major portion of the participants used for the research. The results, hence, may not reliable for the diversified population of today’s business environment where people with different personal values and social norms are working together. For such a diversified population in the business environment we may rely on the results of Pflugrath et.

al’ study which indicates the code of ethics may end up affecting the professional judgment positively. Moreover, the respondents in Shafer et. al’s study had not graduated. Also, most of the respondents have almost 20 years experience in public accounting. People with similar personal values, as stated by the Shafer’s study may choose similar fields. Hence, the results produced are biased and rely upon the majority of people with similar values. Both journals provide a wide number of studies to support their arguments.

The supporting details of every argument belong to reliable sources and articles. The arguments in Shafer et. al’s survey, however, provide the insight of impacts of personal values in different fields. The conclusion is not as straightforward as in the research of Pflugrath et. al. The study of Shafer et. al. (2001) leaves enough space for the reader to judge if the personal values or organizational norm affect ethical judgments and decision makings of accountants and auditors.

Whereas, Pflugrath et. al.provide much evident information on the agreement and in support of auditors and accountants. Moreover, unlike Shafer et. al. ’s study, Pflugrath et. al included much research and literature in support of their conclusion rather than providing the contrary information.

Concisely, the journals under review provide a depth analysis of the two factors that may affect ethical judgment and decision making of accountant and auditors. The first factor is the presence or absence of codes of ethics and the second is the impact of personal values and norms in ethical decisions makings of professionals.

The dilemma of lack of ethical decision making which has abandoned the public confidence and trust is dependent on the codes of ethics which are being set and exercised within the business environment and the perceptions of moral intensity which affect the judgments of the auditors. There are other determinants, as discussed by the articles, like clients pressure and personal interest which may affect the quality of judgments and decision making in the fields of accounting and auditing but it is not right to ignore the 2 factors being discussed.

Ethical judgment, hence, depends on the exercise of codes of ethics which provide autonomy to the auditors and accountants to work in the best interest of the business and not at the discretion of the client’s orders. Moreover, such codes of ethics, if exercised appropriate may affect the values of auditors and accountants leading to the better and more independent of the financial data of the business under review.

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  • University/College:
    University of Chicago

  • Type of paper: Thesis/Dissertation Chapter

  • Words: 5197

  • Pages: 21

Business ethics

Business Ethics (BE) has been called an oxymoron. By an oxymoron, we mean the bringing together of two apparently contradictory concepts. The statement also suggests that there are not, or cannot be, ethics in business. However, there appears to be good reason to suggest that business ethics as a phenomenon, and as a subject, is not an oxymoron. Whilst there will be disagreements about what exactly constitutes “ethical” business activity, it is possible to introduce a fairly uncontroversial definition of the subject itself:

The subject of business ethics are: “Business Ethics is the study of business situations, activities, and decisions where issues of right and wrong are addressed”. It is worth stressing that by “right” and “wrong” we mean morally right and wrong. E. g. commercially, strategically or financially right or wrong. Moreover, by “business ethics” we do not mean only commercial business, but also government organizations, pressure groups, non-for-profit businesses, charities and other organizations. Business ethics and the law.

There is considerable overlap between ethics and the law. The law might be said to be a definition of the minimum acceptable standards of behavior. BE is primarily concerned with those issues not covered by the law, or where there is no definite consensus on whether something is right or wrong. In one sense, BE can be said to begin where the law ends. BE is about the grey areas of business, or where values are in conflict. Studying BE should help you make better decisions, but this is not the same as making right decisions.

Defining morality, ethics, and ethical theory * Morality is concerned with the norms, values and beliefs embedded in social processes which define right and wrong for an individual or a community. * Ethics is concerned with the study of morality and the application of reason to elucidate specific rules and principles that determine right and wrong for a given situation. * These rules and principles are called ethical theories. Ethics rationalizes morality.. To produce ethical theory.. Applicable to any situation! Why is Business ethics important? 1.)

The power and influence of business in society is greater than ever before * BE helps us understand why this is happening, what its implications might be, and how we can address the situation 2. ) Business has the potential to provide a major contribution to our societies * BE helps us understand whether this contribution could be positive or negative 3. ) Business malpractices have the potential to inflict harm on individuals, communities and environment * BE helps us understand more of the consequences of and causes of these malpractices 4. ) Increasing demands from stakeholders.

* BE provides the means to understand these challenges more clearly, in order that firms can meet these expectations more effectively 5. ) Few business people have formal BE education or training * BE can help us to identify, analyze and provide solutions to ethical dilemmas in work life 6. ) Business ethics can stimulate responsible thinking and conduct Globalization: A key context for Business ethics? “Globalization is a process which diminishes the necessity of a common and shared territorial basis for social, economic, and political activities, processes and relations” (definition).

Globalization is a very controversial topic in the public debate, and the camps seem to be divided into supporters and critics, there is also some doubt whether globalization is really even happening at all. Globalization as defined in terms of the deterritorializaion of economic activities is particularly relevant for BE, in three main areas: culture, law and accountability. Cultural issues As a result of globalization, corporations are often finding themselves confronted with new, diverse and often contradictory ethical demands.

Moral values that are taken for granted in the home market may get questioned as soon as corporations enter foreign markets. E. g. Europens tend to regard child labour as strictly unethical, while some Asian countries might have a more moderate approach. On one hand globalization makes regional differences less important since it brings regions together and encourages a more uniform global culture. On the other hand, globalization reveals culture differences and confronts people with them. Legal issues As soon as a company leaves its home territory and moves part of its production chain to, e.g. a third world country, the legal framework becomes very different.

This aspect is closely linked to the relationship discussed previously, about the relationship between ethics and the law. Accountability issues One could argue that multinational corporations (MNCs) are economically as powerful as many governments. The gross domestic product (GDP) of Greece was about the same as revenue of Wal-Mart. The more economic activities get deterritorilized, the less government can control them, and the less they are open to democratic control by the affected people.

Consequently, the call for direct (democratic) accountability of (MNCs) has become louder recent years. In other words, globalization leads to a growing demand for corporate accountability. International variety in approaches to Business Ethics Various authors have claimed that there are certain fundamental differences in the way in which business ethics is practiced in different parts of the world. In the table below are all of this is summarized according to six key words. Regional differences from a business ethics perspective: Europe North-America Asia Who is responsible for ethical conduct in business?

| Social control by the collective| The individual| Top management| Who is the key actor in BE? | Government, trade unions, corp. associations| The corporation| Government, corporations| What are key guidelines for ethical behavior? | Negotiated legal framework of business| Corporate codes of ethics| Managerial discretion| What are the key issues in BE? | Social issues in organizing the framework of business| Immorality in single decision situations| Corporate governance and accountability| What is the dominant stakeholder management approach?

| Multiple stakeholder approach| Focus on shareholder value| Implicit multiple stakeholder approach| Sustainability: a key goal for business ethics? The concept of sustainability is generally regarded as having emerged from the environmental perspective. More recently, though, the concept of sustainability has been broadened to include not only environmental considerations, but also economic and social considerations. “Sustainability refers to the long-term maintenance of systems according to environmental, economic and social considerations”.

Sustainability as a phenomenon also represents a specific goal to be achieved. The framing of sustainability as a goal for business is encapsulated most completely in the notion of a “triple bottom line”. Triple Bottom Line Triple bottom line (TBL), is coined by John Elkington, the director of the SustainAbility strategy consultancy. His view of TBL is that it represent the idea that business does not only have one single goal (namely adding economic value), but that it has an extended goal to add environmental and social value too.

TBL includes: Environmental perspectives, Economic perspectives and Social perspectives. Environmental perspectives The basic principles of sustainability in the environmental perspective concern the effective management of physical resources so that they are conserved for the future. All bio systems are regarding as having finite resources and finite capacity, and hence sustainable human activity must operate at a level that that does not threatened the health of those systems.

It also needs to address a number of critical business problems, such as the impacts of industrialization on biodiversity or the continued use of non-renewable resources. Economic perspectives A narrow concept of economic sustainability focuses on the economic performance of the corporation itself; the responsibility of management is to develop, produce and market those products that secure the long-term economic performance of the corporation. This includes a focus on those strategies which lead to long-term rise in share price, revenues and market share, rather than short-term explosions of profits.

A broader concept of economic sustainability would include the company’s attitude towards and impact upon the economic framework in which it is embedded. Paying bribes or building cartels, for instance, could be regarded as economically unsustainable because these activities undermine the long-term function of markets. Social perspectives The key issue in the social perspective on sustainability is that of social justice.

-A recent UN Report on the World Social Situation, highlighted the widening gap between skilled and unskilled workers, chasm between formal and informal economies, and the growing disparities in health, education and opportunities for social and political participation. -The report also state that 80% of the world’s gross domestic products belonging to 1 billion people living in the developed world, and 20% is shared by the 5 billion people living in developing countries.

Therefore, a more just and equitable world, whether between rich consumers in the West and poor workers in developing countries, between the urban rich or rural poor, or between men and women, remains the central concern in the social perspective.

How exactly business should respond to such a challenge remains open question, but the goals at least have received some clarification with the publishing of the UN’s Millennium Developing Goals: 1. ) Eradicate extreme poverty and hunger 2. ) Achieve universal primary education 3. ) Promote gender equality and empower women 4. ) Reduce child morality 5. ) Improve maternal health 6. ) Combat HIV/AIDS, malaria, and other diseases 7. ) Ensure environmental sustainability 8. ) Develop a global partnership for development.

Although the goals are essentially the responsibility of governments to achieve, but some of them have very direct implications for business. Implications of TBL for business ethics TBL is less about establishing accounting techniques and performance metrics for achievements in the 3 dimensions, and more about revolutionizing the way that companies think about and act in business. Chapter 2 Framing Business Ethics: Corporate Responsibility, Stakeholders, & Citizenship Business Ethics definition: “the study of business situation, activities, and decisions where issues of right and wrong are addressed” 1.

What is a corporation? Definition: “legal status and the ownership of assets” 1-1) Key feature of corporation: 1- corporations are independent from who work in them, manage them, and invest them. Corporations regarded as “perpetual succession” i. e. they can survive the death of any individual investors, employees, or customer 2- “the corporation itself” usually owns those assets. i. e shareholder cannot take computer home because it is corporate owns. Similarly, employees, customer deal with contract with corporate not stakeholder. 3- The implication of situation are significant for understanding their responsibilities: a.

They regarded as “artificial persons in the eye of the law” which means they have rights and responsibilities like individual citizen. b. They “owned” by shareholders, but exist independently of them. This means shareholders are not responsible for the debts or damage caused by the corporation. c. Managers and directors have a “fiduciary” responsibility to protect the investment of shareholders. 1-2) Can corporation be morally responsible for its actions? In addition to legal independency from member (as discussed above), they also have agency independent of their members. There are 2 main argument in supporting this point.

* The first argument looks at the fact that apart from individuals taking decisions within companies, every organization has a corporate internal decision structure that directs corporate decisions in line with pre-determined goals. * The second argument supporting the moral dimensions of corporate responsibilities is the fact that companies not only have an organized corporate internal decision structure, but furthermore manifest a set of beliefs and values that set out what is generally regarded as right or wrong in the corporation-namely, the organizational structure. 2. Corporate Social Responsibility (CSR).

2-1) Why do corporations have social responsibilities? Business arguments for CSR: The corporation take on social responsibilities insofar as doing so promotes its own self-interest which book called it enlightened self-interest. Examples: * By CSR, having a better brand reputation * More satisfied customers * Employees might attracted to work and even more committed * Shows corporate independence from government * Regarded as long term investment by improved and stable competitive context Friedman says that, they are not CSR at all, but merely profit maximization “under the cloak of social responsibility” Moral arguments for CSR:

* Corporations causes social problems (such as pollution), so the have responsibility to solve them and prevent future social problems * They should use their power and resources responsibly in society * They should consider the interests and goals of its stakeholders (consumers, suppliers, local communities) and shareholders 2-2) What is the nature of CSR? CSR definition: “CSR includes the economic, legal, ethical and philanthropic expectations placed on organizations by society at a given point in time” * economic responsibility: Shareholders demand a reasonable return on their investments Employees want safe and friendly paid jobs.

Customers demand good quality products and fair price So this item required of all corporations by society. * Legal responsibilities: Obey the law Required by society * Ethical responsibilities: Corporations do what is right, just, and fair even when they are not complelled to do so by the legal framework. Expected by the society * Philanthropic responsibilities: The love of the fellow human This including things such as charitable donations, the building of recreation facilities for employees and their families, support for local schools, or sponsoring for art and sports events.

According to carroll this is merely desired of corporations without being expected or required. So this is less important than the three other categories Problems with the model: -what should happen when 2 or more responcibilites are in conflict, like in crises the company fire the employee and with eythical responsibilities it should provide secure job – model is based on US context. We will discuss as follow: 2-3) CSR in an international context * economic responsibility: US focused on profitability of companies. As we see in chapter 6 Europe and Asia are somewhat different.

* legal responsibility: in Europe enforcing the accepted rules of the game, whereas America rule be regarded as an interference * ethical responsibility: different regions of the world differ significantly as to local ethical values and preferences. Europeans tend to exhibit far graeter mistrust I modern corporations than north America. * philanthropic responsibility: US has long-standing tradition of successful companies or rich capabilities such as Bill Gates donating large sums to funding arts, education.. in Europe due to high income and tax , an expectation directed towards government

2-4) CSR and strategy-corporate social responsiveness Definition: “the capacity of a corporation to respond to social pressures” Based on Carroll model” * Reaction: the corporation denies any responsibility for social issues * Defence: the corporation admits responsibility, but fight it, doing the very least that seems to be required * Accommodation: the corporation admits responsibility and does what is demended of it by relevant groups * Pro-action: the corporation seeks to go beyond industry norms and anticipates future expectations by doing more than is expected 2-5) Outcomes of CSR: corporate social performance (CSP) * Social policies:

Definition “company’s values, beliefs, and goals with regard to its social environment. ” * Social programmes: Definition “specific social programmes of activities, measures and instruments implemented to achieve social policies ” for example using ISO 14000 as an instrument for auditing of environmental performance. * Social impacts: “concrete changes the corporation has achieved through the programmes implemented in any period” Difficult to achieve because much data on social impact is soft Example: employee welfare policies can be evaluated by employee satisfaction questionnaire.

3. Stakeholder theory of the firm The most popular and influential theory to emerge from business ethics Definition “a stakeholder of a corporation is an individual or a group which either: is harmed by, or benefits from, the corporation; or whose rights can be violated, or have to be respected, by the corporation” You can see page 63 for different types of stakeholder: -traditional management model -stakeholder model -network model 3-1).

Why stakeholders matter – legal perspective: there not only legally binding contracts to suppliers, employees or customer, but also an increasing network of laws and regulations enforced by society, which make it simply a matter of fact that different stakeholders have certain rights and claims on the corporation. -economic perspective: in the light of new institutional economics, there are further objections to the traditional stakeholder view. 3-2) A new role for management -respect the rights of stakeholders -stakeholder democracy: give stakeholder an opportunity to influence and control corporate decisions.

– Corporate governance: codifies and regulates the various rights of the stakeholder groups 3-3) different forms of stakeholder theory * Normative stakeholder theory: This theory attempts to provide reason why corporations should take into account stakeholders interest. * Descriptive stakeholder theory: This theory attempts to ascertain whether (and how) corporations accually do take into account stakeholders interest. * Instrumental stakeholder theory: This theory attempts to answer the question of whether it is beneficial for the corporation to take into account stakeholders interest 4.

Corporate accountability-the firm as a political actor “Corporate accountability refers to whether a corporation is answerable in some way for the consequences of its actions. ” Due to following two reasons, since the late 1980s, we have witnessed a growing tendency toward the “privatization” of many political functions and processes formerly assigned to governments * Governmental failure Reasons: sometimes tackling issues would result in severe changes in the lifestyle of modern society and in a decrease of public welfare sometimes these risk are beyond the control of a single government.

* Increasing power and influence of corporations The liberalization and deregulation of markets and industries during the rule of centre right governments in many countries since the 1980s has given more influence, liberty and choice to private actors The same period resulted in a huge privatization of major public services and formerly public-owned companies Most industrialized countries are to varying degrees struggling with unemployment.

Globalization facilities relocation and potentially makes companies able to engage governments in a “race to the bottom” , i.e. it has been argued that corporations have continually relocated to “low-cost” regions where they are faced with lower levels of regulation of pay and working conditions, environmental protection, and corporate taxation. Since many of the new risks emergent in industrial society are complex and far-reaching, they would require very intricate laws, which in turn would be very difficult to implement and monitor. Hence, corporations have increasingly been set the task of regulating themselves.

4-1) the problem of democratic accountability The questions is “who controls corporations and to whom are corporations accountable” The corporations are accountable to * Their shareholders * Obey and comply with the laws of the countries in which they do business * To society because they shape and influence so much of public and private life in modern societies * To stakeholders and corporate accountability, performance and social activities should be made more visible to its stake which we called it transparency.

Definition “transparency is the degree to which corporate decisions, policies, activities, and impacts are acknowledged and made visible to relevant stakeholders” Corporate accountability and transparency are being presented as necessities not only from a normative point of view, but also with regard to the practical aspects of effectively doing business and maintaining public legitimacy. 5. Corporate citizenship Toward the middle of the 1990s the term “corporate citizenship” (CC) emerged as new way of addressing the social role of the corporation 5-1) defining corporate citizenship: three perspectives

* A limited view of CC: This equates CC with corporate philanthropy. This used to identify the philanthropic role and responsibilities the firm voluntarily undertakes in the local community. * An equivalent view of CC: This equates CC with CSR. CC consists in a somewhat updated label for CSR without attempting to define any new role or responsibilities for the corporation. * An extended view of CC This acknowledges the extended political role of the corporation in society Consists of 3 different aspects of entitlements:

* Social rights: these provide the individual with the freedom to participate in society, such as the right to education, healthcare,… these are sometimes called “positive” rights since they are entitlements towards third parties. * Civil rights: these provide freedom from abuses and interference by third parties; among the most important are the rights to own property, to engage in free markets,.. these are sometimes called “negative” rights since they protect the individual against the interference of stronger power.

* Political rights: * these include the right to vote or the right to hold office and generally speaking, enable the individuals to participate in the process of governance beyond the sphere of his or her own privacy. * The key actor for governing these rights for citizens is the government. In the administration of civil, social, and political rights the extended view of CC suggests the following definition: “Corporate citizenship describe the corporate function for governing citizenship rights for individuals” See figure page 79.

5-2) assessing corporate citizenship as a framework for business ethics * The extended view of CC helps us to see better the political role of the corporation and clarifies the demand for corporate accountability that is such a prominent feature of contemporary business ethics thinking * CC helps us to better understand some of the challenges presented by the new contex of globalization * These rights of citizenship, which include rights to equality, participation and a safe and clean environment, also have strong links to the new goal for business ethics of sustainability.

* Finally, although the notion of CSR has been widely adopted all over the world, the extended view of CC provide us with a more critical perspective on the social role of business that is more in keeping with non-US ways of thinking about business ethics CC as used by practitioners and academics alike is presently still a rather messy concept. Summary chapter 3 – Evaluating Business Ethics Introduction * In a business context there is often need for decisions to be based on a systematic, rational, and widely understandable argument so that they can be adequately defended, justified and explained to relevant stakeholders.

This is the point where normative ethical theories come into play * Ethical theories are the rules and principles that determine right and wrong for a given situation The role of ethical theory * Richard De George (1999) suggest two extreme positions * Ethical absolutism: there are eternal, universally applicable moral principles. Right and wrong are objective qualities that can be rationally determined. * Ethical relativism: morality is context dependent and subjective. Different cultures have different ethics, and both sets of beliefs can be equally right.

* The authors position * Pluralism: accept different moral convictions and backgrounds, while at the same time suggesting that consensus on basic principles and rules in a certain social context can, and should, be reached * Rest on two basic things that John Kaler (1999) suggest we already know about morality before we even try to introduce ethical theory into it * Morality is a social phenomenon. We have to establish the rules and arrangements of our living together as social beings.

* Morality is primarily about harm and benefit. Right and wrong are largely about avoiding harm and providing benefits. Normative ethical theories: North-American and European origins and differences * U. Svs. Europe * Individual moralityvs. Institutional morality * More applicable to individual behavior vs. the main influence in developing and applying theory is design of institutions in the economic system * Accepting capitalismvs. Questioning capitalism * Ethical problems occur within the capitalist system vs.

questioning the ethical justification of capitalism * Applying moral normsvs. Justifying moral norms * Focus on the application of morality to business situations vs. justification and ethical legitimation of norms for addressing ethical dilemmas in business situations. Western modernist ethical theories * Figure 3. 1. p 97 and figure 3. 2 p. 98 * Consequentialist ethics: * based on the intended outcomes, the aims, or the goals of a certain action. * Teleological (greek word for “goal”).

* Theories: Egoism and utilitatianism * Non-consequentialist ethics: * An action is right/wrong because the underlying principles are morally right/wrong. * Deontological (greek word for “duty”) * Theories: ethics of duties and ethics of rights and justice * Rights-based theories tend to start by assigning a right to one party and then advocating a corresponding duty on another party to protect that right, while ethics of duties begin with assigning the duty to act in a certain way. Egoism (Plato, Adam Smith (1723-1790))

* An action is morally right if the decision-maker freely decides in order to pursue either their (short-term) desires or their (long-term) interests * Underlying concept of man: as man has only limited insights to the consequences of his actions, the only suitable strategy to achieve a good life is to pursue his own desires or interests * In the economic system: if people sell faulty products, the customers may suffer in the short term, but in the longer run, the producer’s trade will suffer as customers turn to other products.

Hence, the producer will avoid producing shoddy goods for their own self-interest * “egoist practices for utilitarian results” * Egoist vs. selfish: whereas the egoist can be moved by pity for others in seeking to remove his own distress caused by their plight, the selfish person is insensitive to the other. * Criticism of egoism based on desire: it renders patently different approaches to life as being equvivalent * Ex: the life of the student who just gets drunk in a bar is as admirable as the student who works hard for a first class degree, if both followed their desire.

* Therefore, egoism based on the pursuit of interests is the ultimate rendering of this concept (the pursuit of one’s longer term well-being). * Enlightened egoism: corporations might invest in the social environment, because an improved level of social services is in the interest of workforce retention and satisfaction * This theory works fine if there is a mechanism in society that makes sure that no individual egoist pursues his/her own interests at other egoists’ expense.

Utilitarianism (Jeremy Bentham (1748-1832), John Stuart Mill (1806-1873)) * An action is morally right if it results in the greatest amount of good for the greatest amount of people affected by the action * “The greatest happiness principle”: focuses solely on the consequences of an action, weighs the good results against the bad results, and finally encourages the action that results in the greatest amount of good for all the people involved.

* Comes close to what we know as cost-benefit analysis (e.g. figure 3. 3 p. 103) * Main problems * Subjectivity: consequences might depend heavily on the perspective of the person performing the analysis * Problems with quantification: e. g. health and safety issues is difficult to quantify and calculate * Distribution of utility: minorities are overlooked.

* The problem of subjectivity lead to a refinement of the theory, differentiating between * Act utilitarianism: Looks to single actions and bases the moral judgment on the amount of pleasure and the amount of pain this single action causes * Rule utilitarianism: looks at classes of actions and asks whether the underlying principles of an act produce more pleasure than pain for society in the long run. * Relieves us from examining right or wrong in every situation, and offers the possibility of establishing certain principles that we then can apply to all such situations.

Ethics of duties (Immanuel Kant (1724-1804)) * Morality is a question of certain eternal, abstract, and unchangeable principles – a set of a priori moral laws – that humans should apply to all ethical problems. * “Categorical imperative”: theoretical framework to apply to every moral issue regardless of who is involved, who profits, and who is harmed by the principles once they have been applied in specific situations. Consists of three parts * Maxim 1: Act only according to that maxim by which you can at the same time will that it should become a universal law.

* Aspect of consistency. An act can only be right if everyone could follow the same underlying principle * Maxim 2: Act so that you treat humanity, whether in your own person or in that of another, always as an end and never as a means only * Humans deserve respect as autonomous, rational actors, and this human dignity should never be ignored * Maxim 3: Act only so that the will through its maxims could regard itself at the same time as universally lawgiving * The principles for our actions should be acceptable for every human being.

Tries to overcome specifically the risk of subjectivity. * Close to “the golden rule”: Treat others as you want to be treated yourself. ” * Core difference between religious and Kantian approach is that while religion “recognizes God as the ultimate source of value,” Kant saw humans as rational actors who could decide these principles for themselves. * Evan and Freeman (1993) argue that the ethical basis for the stakeholder concept has been substantially derived from Kantian thinking, and suggest that firms have a fundamental duty to allow stakeholders some degree of influence on

the corporation. * Problems with ethics of duties: * Undervaluing outcomes: too little consideration of the outcomes * Complexity: specific formulations such as Kant’s categorical imperative can be quite difficult to apply * Optimism: the view of man as rational actor who acts consequently according to self-imposed duties seems more of an ideal than a reality with regard to business actors.

Ethics of rights and justice (John Locke (1632-1714)) * Natural rights are certain basic, important, unalienable entitlements that should be respected and protected in every single action * Rights are related to duties * The rights of one person can result in a corresponding duty on other persons to respect, protect, or facilitate these rights.

* This link makes it similar to Kant’s approach, but the main difference is that it does not rely on a rather complex process of determining the duties by applying the categorical imperative * Natural rights, or human rights as they are referred to mostly today, are based on a certain consensus of all human beings about the nature of human dignity * Powerful approach which has substantially shaped the constitutions of many modern states. * Limitation: notions of rights are quite strongly located in a Western view of morality.

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Business ethics Essay

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Business ethics Essay
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  • University/College:
    University of Chicago

  • Type of paper: Thesis/Dissertation Chapter

  • Words: 3440

  • Pages: 14

Business ethics

?Values are individual in nature. ?Values are comprised of personal concepts of responsibility, entitlement and respect. ?Values are shaped by personal experience, may change over the span of a lifetime and may be influenced by lessons learned. ?Values may vary according to an individual’s cultural, ethnic and/or faith-based background. MORALS ?Morals are guiding principles that every citizen should hold. ?Morals are foundational concepts defined on both an individual and societal level. ?At the most basic level, morals are the knowledge of the difference between right and wrong.

PERSONAL ETHICS

?Simply put, all individuals are morally autonomous beings with the power and right to choose their values, but it does not follow that all choices and all value systems have an equal claim to be called ethical. ?Actions and beliefs inconsistent with the Six Pillars of Character – trustworthiness, respect, responsibility, fairness, caring and citizenship – are simply not ethical. MORALITY AND ETHICS ?Concerns the goodness of voluntary human conduct that affects the self or other living things ?Morality (Latin mores) usually refers to any aspect of human action ?Ethics (Greek ethos) commonly refers only to professional behavior.

?Ethics consist of the application of fundamental moral principles and reflect our dedication to fair treatment of each other, and of society as a whole. ?

An individual’s own values can result in acceptance or rejection of society’s ethical standards because even thoughtfully developed ethical rules can conflict with individual values. UNIT II – ENGINEERING ETHICS ENGINEERING ETHICS is: • the study of moral issues and decisions confronting individuals and organizations involved in engineering and • the study of related questions about moral ideals, character, policies and relationships of people and organizations involved in technological activity.

• TRAINING IN PREVENTIVE ETHICS • Stimulating the moral imagination • Recognizing ethical issues • Developing analytical skills • Eliciting a sense of responsibility • Tolerating disagreement and ambiguity IMPEDIMENTS TO RESPONSIBILITY • Self-interest. • Fear. • Self-deception. • Ignorance. • Egocentric tendencies. • Microscopic vision. • Groupthink. CLEARLY WRONG ENGINEERING PRACTICES • Lying • Deliberate deception • Withholding information • Failing to adequately promote the dissemination of information • Failure to seek out the truth.

• Revealing confidential or proprietary information • Allowing one’s judgment to be corrupted. MORAL DILEMMMA There are three types of complexities. ?VAGUENESS: This complexity arises due to the fact that it is not clear to individuals as to which moral considerations or principles apply to their situation. ?CONFLICTING REASONS: Even when it is perfectly clear as to which moral principle is applicable to one’s situation, there could develop a situation where in two or more clearly applicable moral principles come into conflict. ?

DISAGREEMENT: Individuals and groups may disagree how to interpret, apply and balance moral reasons in particular situations. Steps in confronting MORAL DILEMMAS: i) Identify the relevant moral factors and reasons. ii) Gather all available facts that are pertinent to the moral factors involved. iii) Rank the moral considerations in the order of their importance as they apply to the situation. iv) Consider alternative course of action, tracing the full implications of each, as ways of solving dilemma. v) Talk with colleagues, seeking the suggestions and perspectives of the dilemma.

vi) Arrive at a carefully reasoned judgment by weighing all the relevant moral factors and reasons in light of facts. All the above steps are distinct, even though they are inter-related and can often be taken jointly MORAL AUTONOMY • This is viewed as the skill and habit of thinking rationally about ethical issues on the basis of moral concerns independently or by self-determination. • Autonomous individuals think for themselves and do not assume that customs are always right. • They seek to reason and live by general principles. • Their motivation is to do what is morally reasonable for its own sake, maintaining integrity, self-respect, and respect for others. .

PROFESSIONS AND PROFESSIONALISM

Engineers normally imagine that they are servants to organizations rather than a public guardian. Responsibility to the public is essential for a professional. Who is a professional? • Obviously a member of a profession. What is a profession? ‘JOB’ or ‘OCCUPATION’ that meets the following criteria from which a person earns his living. ?Knowledge – Exercise of skills, knowledge, judgment and discretion requiring extensive formal criteria. ?Organization – special bodies by members of the profession to set standard codes of ethics, ?Public good-The occupation serves some important public good indicated by a code of ethics.

Who is a professional engineer? • Has a bachelor’s degree in engineering from an accredited school • Performs engineering work • Is a registered and licensed Professional Engineer • Acts in a morally responsible way while practicing engineering PROFESSIONAL RESPONSIBILITY ?Being morally responsible as a professional. ?Most basic and comprehensive professional virtue. ?Creation of useful and safe technological products while respecting the autonomy of clients and public, especially in matters of risk taking. MORAL INTEGRITY Moral integrity is the unity of character on the basis of moral concern, and especially on the basis of honesty.

The unity is consistency among our attitudes, emotions and conduct in relation to justified moral values. SELF-RESPECT ?Valuing oneself in morally appropriate ways. ?Integral to finding meaning in one’s life and work ?A pre-requisite for pursuing other moral ideals and virtues. ?Self-respect is a moral concept of properly valuing oneself but self-esteem is a psychological concept of positive attitude towards oneself. MORAL AUTONOMY ?People are morally autonomous when their moral conduct and principles of action are their own. ?

Moral beliefs and attitudes must be a critical reflection and not a passive adoption of the particular conventions of one’s society, religion or profession. ?Moral beliefs and attitudes cannot be agreed to formally and adhered to merely verbally. ?They must be integrated into the core of one’s personality and should lead to committed action. ?It is wrong to think that as an employee when one performs ‘acts’ serving company’s interests, one is no longer morally and personally identified with one’s actions. ACCOUNTABILITY: ?Responsible people accept moral responsibility for their actions. ?

Accountability is the willingness to submit one’s actions to moral scrutiny and be open and responsive to the assessment of others.

?It should be understood as being culpable and blameworthy for misdeeds. Submission to an employer’s authority creates in many people a narrow sense of accountability for the consequences of their action. This is because of i) Only a small contribution is made by one individual, when large scale engineering work is fragmented. The final product which is far away from one’s immediate workplace, does not give a proper understanding of the consequences of one’s action. ii) Due to the fragmentation of work, a vast diffusion of accountability takes place. The area of personal accountability is delimited to the portion of work being carried out by one. iii)

The pressure to move on to another new project does not allow one to complete the observations long enough. This makes people accountable only for meeting schedules and not for the consequences of action. iv) To avoid getting into legal issues, engineers tend to concentrate more on legal liabilities than the containment of the potential risks involved in their area of work. Viewing engineering as a social experimentation makes one overcome these difficulties and see the problem in whole rather than as part. ENGINEERING CODES OF ETHICS Engineering Codes of Ethics have evolved over time EARLY CODES •Codes of personal behavior.

•Codes for honesty in business dealings and fair business practices • Employee/employer relations NEWER CODES •Emphasize commitments to safety, public health and environmental protection •Express the rights, duties and obligations of members of the Profession •Do not express new ethical principles, but coherently restate existing standards of responsible engineering practice •Create an environment within the Profession where ethical behavior is the norm •Not legally binding; an engineer cannot be arrested for violating an ethical code (but may be expelled from or censured by the engineering society) CODES OF ETHICS – ROLES OR FUNCTIONS 1.

Inspiration and Guidance: ?Codes provide positive stimulus for ethical conduct and helpful guidance by using positive language. ?Codes should be brief to be effective and hence such codes offer only general guidance. ?Supplementary statements or guidelines to give specific directions are added by a number of societies or professional bodies. 2. Support: ?Codes give positive support to those seeking to act ethically. ?An engineer under pressure to act unethically can use one of the publicly proclaimed codes to get support for his stand on specific moral issues. ?Codes also serve as legal support for engineers. 3. Deterrence and discipline:

?Codes can be used as a basis for conducting investigations on unethical conduct. ?They also provide a deterrent for engineers to act immorally. ?Engineers who are punished by professional societies for proven unethical behaviour by revoking the rights to practice as engineers are also subjected to public ridicule and loss of respect from colleagues and local community. ?

This helps to produce ethical conduct even though this can be viewed as a negative way of motivation. UNIT IV – RESPONSIBILITIES AND RIGHTS Colleagiality & Its Elements ‘Collegiality is a kind of connectedness grounded in respect for professional expertise and in a commitment to the goals and values of the profession and as such, collegiality includes a disposition to support and co-operate with one’s colleagues’.

– Craig Ihara The central elements of collegiality are respect, commitment, connectedness and co- operation. Respect: Acknowledge the worth of other engineers engaged in producing socially useful and safe products. Commitment : Share a devotion to the moral ideals inherent in the practice of engineering. Connectedness : Aware of being part of a co-operative undertaking created by shared commitments and expertise. Collegiality, like most virtues, can be misused and distorted.

It should not be reduced to ‘group interest’ but should be a shared devotion for public good. It is not defaming colleagues, but it does not close the eyes to unethical practices of the co-professionals, either. Classifications of Loyalty ?Agency-Loyalty oFulfill one’s contractual duties to an employer. oDuties are particular tasks for which one is paid oCo-operating with colleagues oFollowing legitimate authority within the organization. ?Identification-Loyalty: oIt has to do with attitudes, emotions and a sense of personal identity. oSeeks to meet one’s moral duties with personal attachment and affirmation.

oIt is against detesting their employers and companies, and do work reluctantly and horribly (this is construed as disloyalty) This means oAvoid conflicts of interest, oInform employers of any possible conflicts of interest, oProtect confidential information, oBe honest in making estimates, oAdmit one’s errors, etc. Loyalty – Obligation of Engineers Agency-Loyalty oEngineers are hired to do their duties. oHence obligated to employers within proper limits Identification-Loyalty Obligatory on two conditions; 1. When some important goals are met by and through a group in which the engineers participate 2.

When employees are treated fairly, receiving the share of benefits and burdens. But clearly, identification-loyalty is a virtue and not strictly an obligation. Relationship – Professionalism and Loyalty 1. Acting on professional commitments to the public is more effective to serve a company than just following company orders. 2. Loyalty to employers may not mean obeying one’s immediate supervisor. 3. Professional obligations to both an employer and to the public might strengthen rather than contradict each other. Need for Authority Authority is needed since a) Allowing everyone to exercise uncontrolled individual discretion creates chaos.

(confusion). b) Clear lines of authority identifies areas of personal responsibility and accountability. ‘Confidentiality or confidential information’ oInformation considered desirable to be kept secret. oAny information that the employer or client would like to have kept secret in order to compete effectively against business rivals. oThis information includes how business is run, its products, and suppliers, which directly affects the ability of the company to compete in the market place oHelps the competitor to gain advantage or catch up Privileged information, Proprietary information and Patents.

oPrivileged information: ?‘Information available only on the basis of special privilege’ such as granted to an employee working on a special assignment. oProprietary information: ?Information that a company owns or is the proprietor of. ?This is primarily used in legal sense. ?Also called Trade Secret. A trade secret can be virtually any type of information that has not become public and which an employer has taken steps to keep secret. oPatents: ?Differ from trade secrets. ?Legally protect specific products from being manufactured and sold by competitors without the express permission of the patent holder.

?They have the drawback of being public and competitors may easily work around them by creating alternate designs. Conflict of Interest Conflict of Interest arises when two conditions are met: 1. The professional is in a relationship or a role that requires exercising good judgment on behalf of the interests of an employer or client and 2. The professional has some additional or side interest that could threaten good judgment in serving the interests of the employee or client. E. g.

When an engineer is paid based on a percentage of the cost of the design and there is no incentive for him to cut costs- The distrust caused by this situation compromises the engineers’ ability to cut costs and calls into question his judgement. Conflict of Interest created by Interest in other companies ?When one works actually for the competitor or subcontractor as an employee or consultant. ?Having partial ownership or substantial stock holdings in the competitor’s business. ?

It may not arise by merely having a spouse working for sub-contractor to one’s company, but it will arise if one’s job also includes granting contracts to that subcontractor. ?Tempting customers away from their current employer, while still working for them to form their own competing business. ?Moonlighting usually creates conflicts when working for competitors, suppliers or customers but does not conflict when working for others without affecting the present employer’s business.

‘Moonlighting’ means working in one’s spare time for another employer. Conflicts of Interest created by Insider information oUsing inside information to set-up a business opportunity for oneself or family or friends. oBuying stock in the company for which one works is not objectionable but it should be based on the same information available to the public.

oThe use of any company secrets by employee to secure a personal gain threatens the interest of the company. Avoiding Conflicts Of Interests oTaking guidance from Company Policy oIn the absence of such a policy taking a second opinion from a coworker or manager. This gives an impression that there no intension on the part of the engineer to hide anything. oIn the absence of either of these options, to examine ones own motives and use the ethical problem solving techniques. oOne can look carefully into the professional codes of ethics which uniformly forbid conflicts of interest.

Some of these codes have very explicit statements that can help determine whether or not the situation constitutes conflict of interest. Right of Professional Conscience oThere is one basic and generic professional right of engineers, the moral right to exercise responsible professional judgment in pursuing professional responsibilities. oPursuing these responsibilities involves exercising both technical judgment and reasoned moral convictions.

oThis basic right can be referred to as the right of professional conscience. Professional Rights & Ethical Theories 1. Rights Ethics: oThe most basic human right, which needs no justification, as per A. I. Meldon, is to pursue one’s legitimate (those that do not violate others’ rights) interests. oThe right to pursue legitimate interests gives a person right to pursue professional moral obligations. oThis may be viewed as a human right of conscience directly derived from the basic human right.

2. Duty Ethics: oI have a right to something only because others have duties or obligations to allow me (and not interfere) to do so. oIf we derive the meaning of ‘others’ as employers, then the basic professional right is justified by reference to others’ duties to support or not interfere with the work related exercise of conscience by professionals. 3. Utilitarianism: oPublic good can be served by allowing professionals to meet their obligations to the public. oThese obligations arise due to the professional’s role in promoting public good. oThe basic goal of producing the most good for the greatest number of people is enough to justify the right of professional conscience.

o Employee Rights Employee rights are any rights, moral or legal, that involve the status of being an employee. Employee rights are: ?There should be no discrimination against an employee for criticizing ethical, moral or legal policies and practices of the organization. ?The organization will not also discriminate against an employee for engaging in outside activities or for objecting to an organization directive that violates common norms of morality. ?

The employee will not be deprived of any enjoyment of reasonable privacy in his/her workplace. ?No personal information about employees will be collected or kept other than what is necessary to manage the organization efficiently and to meet the legal requirements. ?No employee who alleges that her/his rights have been violated will be discharged or

penalized without a fair hearing by the employer organization. Some clear examples: falsifying data, avoidance on the safety of a product Intellectual Property Rights ?Intellectual Property is a product of the human intellect that has commercial value ?Many of the rights of the ownership common to real and personal property are also common to Intellectual Property ?Intellectual Property can be bought, sold, and licensed ?Similarly it can be protected against theft and infringement by others Patent, Design & Trademark together with Copyright form TOTAL INTELLECTUAL PROPERTY Patent 1.

Derived from the Latin word ‘LITTERAE PATENTES’ which means ‘Open Letters’ or ‘Open Documents’ to confer rights and privileges. 2. A contract between an Inventor and the Government 3. An exclusive privilege monopoly right granted by the Government to the Inventor 4. Invention may be of an Industrial product or process of manufacture 5. Invention should be new, non-obvious, useful and patentable as per Patents Act 6. The right to the inventor is for limited period of time and valid only within the territorial limits of a country of grant. Examples: a drug compound, a tool, maybe software effects DESIGN?

Meant for beautifying an industrial product to attract the consumer public ?Shaping, Configuration or Ornamentation of a vendible Industrial product ?Exclusive ‘Design Rights’ to the originator for a limited term ?Patents & design embrace the production stage of an industrial activity TRADE MARK ?Trade Mark is a name or symbol adopted for identifying goods ?Public can identify from the Trade Mark from whom the product is emanating ?Trade Marks protection is given for an industrial product by the Government Examples: Channel No. 5’s smell, Jacque Villeneuve’s face! COPY RIGHTS ?The right to original literary and artistic works.

• Literary, written material • Dramatic, musical or artistic works • Films and audio-visual materials • Sound recordings • Computer Programmes/software • SOME databases Example: Picasso’s Guernica, Microsoft code, Lord of the Ring. What are the most common conflicts? oConflicts over schedules, depending mostly on support depts. but where managers do not have any control. oConflicts over which is the most important dept or function at a given time oConflicts over personnel resources oConflicts over technical issues oConflicts over administrative procedures oPersonality conflicts oConflicts over costs.

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Business ethics Essay

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Business ethics Essay
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  • University/College:
    University of California

  • Type of paper: Thesis/Dissertation Chapter

  • Words: 716

  • Pages: 3

Business ethics

This semester we have studied several of the most important ethical theories. We have also looked at some specific issues that arise in business. For this last assignment, you will write an essay on one of the topics in Chapter 8, Chapter 10, or Chapter 14. In writing the essay you must demonstrate an understanding of the ethical theories we have studied. This means recognizing an ethical issue, and being able to apply the relevant ethical theories to the issue. Choose only ONE of the following topics for your essay: Chapter 8 Employment Rights 1. Explain the advantages the employment-at-will system for both the employee and the employer.

Explain the disadvantages for both the employee and the employer. Does the employer or employee have the upper hand in this system? What are the relevant ethical theories for employment at will? 2. Explain what rights both employees and employers have. Discuss how these rights might conflict. Do employees or employers have more or stronger rights? Demonstrate how the theories concerning rights apply to both employees and employers. Chapter 10 Marketing, Advertising and Product Safety 1. Describe the ethical constraints that salespeople must abide by. Use the ethical theories we have studied. 2.

Describe the ethical constraints that must be placed on advertising. Use the ethical theories we have studied. 3. Describe the extent of manufacturers’ responsibility to create safe products. Use the ethical theories we have studied Chapter 14 International Business Ethics 1. What special ethical issues arise in international business. Use the ethical theories we have studied 2. Describe the codes of ethics that are understood to apply to all forms of international business. Instructions: The essays are designed so that you only have to read the textbook in order to write an excellent paper.

You may use outside sources, but you need to make sure your sources are both reliable and relevant. Make sure the title of your essay indicates what topic you are addressing. The essay will again be a minimum of 725 words and a maximum of 1,000 words. Your name, the date, title, and citations do not count. If you fail to write the minimum amount you will receive at least one full grade lower. Most essays that don’t meet the minimum are not very good anyway, so not writing the minimum only makes things worse. Write an essay showing that you understand the business issue and/or the relevant ethical theories.

To show that you understand the material, you need to explain, in your own words, what the material is about; merely saying what the book says or repeating something from an internet article doesn’t really show your understanding. Relate the ethical theory to actual business situations or practices If there is any special vocabulary, show that you know what the words meant It is helpful to use original examples in explaining the concept or theory; using an example that you made up yourself shows that you really know what you are talking about.

Relate the topic to your personal business experience; this shows that you are able to apply the material. This really helps me to see that you understand also Make sure you cover all the important aspects of the theory. Cite your sources! Any where that you are using material that is not your own be sure to cite the book or article, even if it’s just one sentence. I’m not going to insist that you use a particular citation style, but make sure that it is clear that you are using someone else’s words.

You don’t want even the appearance of plagiarism. Remember that plagiarism will earn you minus 20 points. Email your essay to me by midnight on May 10th. You are responsible to make sure that I have received your email. I always respond when I receive an emailed paper, so if you do not receive a response, you will know that I did not receive it. I will not accept your essay later than midnight on May 11th. Late essays will receive one full grade lower; after one class you will receive no credit.

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Business ethics Essay

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  • University/College:
    University of California

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  • Words: 2364

  • Pages: 9

Business ethics

People also develop habits that make it easier to choose between what society considers good or bad. 1. Virtues – are habits that incline people to do what is acceptable. Example: fairness, generosity, honesty, loyalty and etc. 2. Vices – are habits of unacceptable behavior. Example: vanity, greed, envy, and anger. 3. Peoples virtues and vices help define their value system, the complex scheme of moral values by which they live. Each society forms a set of rules that establishes the boundaries of generally accepted behavior.

Moral Code – are rules that often expressed in statements about how people should behave by which a society lives. Morality – refers to social conventions about right and wrong that are so widely shared that they become the basis for an established consensus. However ones view of moral may vary by: 1. Age 2. Cultural group 3. Ethnic background 4. Religion 5. Gender Importance of Integrity Moral principles – are statements of what you believe to be rules of right conduct. A person who acts with integrity acts in accordance with a personal code of principles- integrity is one of the cornerstone of ethical behavior.

Example: You might believe that it is important to do as your employer requests and that you should be fairly compensated for your work. However, if your employer insists that you not report recent overtime hours due to budget constraints, a moral conflict arises. Ethics in the Business World Risk is the product of multiplying the likelihood of an event by the impact of its occurrence. Ethics has risen to the top of business agendas because of: 1. The risks associated with inappropriate behavior have increased. 2.

Greater globalization has created a much more complex work environment that making it much more difficult to apply principles and code of ethics consistently. 3. Heightened vigilance raises the risk of financial loss for business that do not foster ethical practices or run afoul of required standards. Why Fostering Good Business Ethics Is Important? 1. To gain the goodwill of the community – basic responsibility to society. 2. To create an organization that operates consistently. Operate with honesty and integrity, staying true to corporate principles Operate according to standards of ethical conduct, in words and action.

Treat colleagues, customers, and consumer with respect. Accept personal responsibility for actions. Value diversity. Make decisions based on facts and principles. 3. To produce good business. Companies that provide excellent service maintain their customers instead of losing them to competitors. Companies that produce safe and effective products avoid costly recalls and lawsuits. Companies that develop and maintain a strong employee relations suffer less turnover and enjoy better employee morale. Suppliers and other business partners often prefer to work with companies that operate in a fair and ethical manner.

4. To protect the organization and its employees from legal action Identify its core beliefs, which need to include a commitment to complying with the letter and spirit of the law and ethical conduct. Understand the strengths and weaknesses of its culture and organizational capacities. Scan its business environment. Determine, relative to its goals and objectives and baseline data to its prior performance, what outcome should be expected of the program. identify targets and measurable indicators of expected program outcomes.

Design, implement and enforce a program that will “exercise due diligence to prevent, detect, and report criminal conduct and otherwise promote an organizational culture that encourages ethical conduct and a commitment to compliance with all applicable law. Regularly evaluate its program to determine if its effective, and capture what the organization learns along the way. To avoid unfavorable publicity Companies that operates unethically often suffer negative consequences and bad publicity. Improving Corporate Ethics 1. Appointing a Corporate Officer.

* Corporate Officer is a senior-level manager who provides direction in the area of the business conduct. * Integrating their organizations ethics and values initiatives, compliance activities and business conduct practices into the decision making processes at all levels of the organization. 2. Ethical Standards set by Board of Directors * Board of Directors is responsible for the careful and responsible management of an organization. * Responsible for supervising the management team. * Set the standard company-wide ethical conduct and ensure compliance with laws and regulations.

* Establishing a Corporate Code of Ethics Code of Ethics highlights an organizations key ethical issues and identifies the overarching values and principles that are important to the organization and its decision making. Code of ethics helps ensure that employees abide by the law, follow necessary regulations and behave in an ethical manner. 3. Conducting Social Audits Social Audit companies identify ethical standards lapses they committed in the past and set directives for avoiding similar missteps in the future. 3. Requiring employees to take Ethics Training.

The ancient Greek Philosophers believe that personal convictions about right and wrong behavior could be improved through education. 6. Including Ethical Criteria in Employee Appraisals Creating an Ethical Work Environment Employees in highly competitive workplaces often feel pressures from: 1. Aggressive competitors 2. Cutthroat suppliers 3. Unrealistic budgets 4. Minimum quotas 5. Tight deadlines 6. Bonus incentives Employees may also be encouraged to do “ whatever it takes” to get the job done. How Management can Affect employees Ethical Behavior.

Ethical Decision Making 7 Steps approach that can help guide your ethical decision making: 1. Get the Facts 2. Identify stakeholders and their positions 3. Considering the consequences of your decision 4. Weighing various guidelines and principles 1. Develop and evaluate options 2. Review your decision 3. Evaluate the results of your decision Ethics in the Information Technology Here are some examples that raise public concern about the ethical use of I. T. : 1. Today’s workers might have their e-mail and Internet access monitored while at work. 2.

Millions of people have used peer-to-peer networks to download music and movies at no charge and in apparent violation of copyright laws. 3. Organizations contact millions of people worldwide through unsolicited e-mail (spam) at an extremely low cost. 4. Hackers break into databases of financial institutions and steal customer information . 5. Student around the world have been caught downloading material from the Internet and plagiarizing content for their term paper. 6. Web sites plant cookies or spyware on visitor’s had drives to track their internet activity.

Ethical Theories Aristotelian Theory Absolutism Conscience Determinism Egoism Emotivism State of Nature(Hobbes) Rights Theory Intuitionism Autonomy Naturalism Objectivism Relativism Subjectivism Utilitarianism Deontology Aristotelian Theory Aristotelian Theory. Aristotle thought a person must have “experience of the actions in life” and have been “brought up in fine habits” in order to become good . If a person were to become virtuous, he could not simply study what virtue is, he had to actually do virtuous activities. Absolutism.

Absolutism (European history), a historiographical term used to describe a form of monarchical power that is unrestrained by any other institutions, such as churches, legislatures, or social elites. Absolutism which argues there is but one true and correct view. Conscience Conscience is an ability or a faculty that distinguishes whether one’s actions are right or wrong. It leads to feelings of remorse when one does things that go against his/her moral values, and to feelings of rectitude or integrity when one’s actions conform to our moral values. It is also the attitude which informs one’s moral judgment before performing any action.

Commonly used metaphors refer to the “voice of conscience” or “voice within. ” Determinism Determinism implies the moral differences between two people are caused by hereditary predispositions and environmental effects and events. This does not mean determinists are against punishment of people who commit crimes because the cause of a person’s morality (depending on the branch of determinism) is not necessarily themselves. Egoism Ethical egoism or egotism (also called simply egoism) is the normative ethical position that moral agents ought to do what is in their own self-interest.

It differs from psychological egoism, which claims that people do only act in their self-interest. Ethical egoism also differs from rational egoism, which holds merely that it is rational to act in one’s self-interest. These doctrines may, though, be combined with ethical egoism. Emotivism Emotivism says that moral judgments express positive or negative feelings. “X is good” means “Hurrah for X! ” — and “X is bad” means “Boo on X! ” Since moral judgments are exclamations, they can’t be true or false. So there can’t be moral truths or moral knowledge. We can reason about moral issues if we assume a system of norms.

But we can’t reason about basic moral principles. State of Nature (Hobbes) Within the state of nature there is no justice, since there is no law, excepting certain natural precepts, the first of which is “that every man ought to endeavour peace, as far as he has hope of obtaining it”; and the second is “that a man be willing, when others are so too, as far forth as for peace and defence of himself he shall think it necessary, to lay down this right to all things; and be contented with so much liberty against other men as he would allow other men against himself”.

From this, Hobbes develops the way out of the state of nature into civil government by mutual contracts. Right Theory A right is a special advantage that someone gains because of his or her particular status. The “special advantage” might include gaining a liberty, a power, an entitlement, or an immunity. The “particular status” might include one’s status as a human being, a woman, a minority, an animal, a child, or a citizen of some country. This general notion of “right” applies in both legal and moral contexts.

Moral philosophers are principally concerned with rights that are not simply created by political institutions such as the U. S. government. In this sense, a moral right is a justified constraint upon how others may act. Intuitionism Ethical intuitionism is at a minimum a view in moral epistemology according to “ which some moral truths can be known without inference. ” Justice Justice is the concept of moral rightness based on ethics, rationality, law, natural law, fairness, religion and/or equity. Autonomy.

Autonomy refers to a person’s capacity for self-determination in the context of moral choices. Kant argued that autonomy is demonstrated by a person who decides on a course of action out of respect for moral duty. That is, an autonomous person acts morally solely for the sake of doing “good”, independently of other incentives. Kant applied this concept to create a definition of personhood. He suggested that such compliance with moral law creates the essence of human dignity. Naturalism Naturalism is a philosophical position that all phenomena can be explained in terms of natural causes and laws.

In its broadest and strongest sense, naturalism is the metaphysical position that “nature is all there is, and all basic truths are truths of nature. ” Things and powers, commonly regarded as supernatural, for example, gods and witchcraft, are asserted to be nonexistent.

Objectivism Objectivism (Ayn Rand) holds that reality exists independent of consciousness; that individual persons are in contact with this reality through sensory perception; that human beings can gain objective knowledge from perception through the process of concept formation and inductive and deductive logic; that the proper moral purpose of one’s life is the pursuit of one’s own happiness or rational self-interest;

That the only social system consistent with this morality is full respect for individual rights, embodied in pure laissez faire capitalism; and that the role of art in human life is to transform man’s widest metaphysical ideas, by selective reproduction of reality, into a physical form—a work of art—that he can comprehend and to which he can respond emotionally.

Relativism

Relativism is the idea that some elements or aspects of experience or culture are relative to, i. e. , dependent on, other elements or aspects. Common statements that might be considered relativistic include “That’s true for you but not for me” “Beauty is in the eye of the beholder” “You can’t judge other cultures by the standards of your own” Relativism is sometimes (though not always) interpreted as saying that all points of view are equally valid, in contrast to an absolutism which argues there is but one true and correct view.

Subjectivism

Subjectivism is a philosophical tenet that accords primacy to subjective experience as fundamental of all measure and law. In an extreme form, it may hold that the nature and existence of every object depends solely on someone’s subjective awareness of it. Utilitarianism Utilitarianism is described by the phrase “the greatest good for the greatest number of people”. Therefore, it is also known as “the greatest happiness principle”. And like any ethical theory, the application of utilitarianism is heavily dependent on the moral agent’s full range of wisdom, experience, social skills, and life skills.

Deontology Deontology holds that the most important aspects of our lives are governed by certain unbreakable moral rules. Deontologists hold that these rules may not be broken, even if breaking them may improve an outcome. In other words, they may do the “right” thing, even though the consequences of that action may not be “good. ” The famous philosopher, Immanuel Kant is often identified with this theory. One example of a list of “unbreakable” rules is the Ten Commandments.

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Business ethics Essay

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Business ethics Essay
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  • University/College:
    University of Chicago

  • Type of paper: Thesis/Dissertation Chapter

  • Words: 1062

  • Pages: 4

Business ethics

In business there will always be the line to act with integrity or to lie, cheat, and steal. Famous author Douglas Adams once said, “To give real service you must add something which cannot be bought or measured with money, and that is sincerity and integrity” (Heathfield, n. d). The priority of any business is to serve the needs and wants of the customer and more important his or her stakeholders. Any business decision made in major corporations must line up with stakeholder’s interests, but more important stakeholders have the social responsibility to represent in the best interest of the entire corporation.

The prevalence of so many major scandals with corporations caught in the public is drawing much needed attention on concepts of ethic, and social responsibility. Ethics and corporate responsibility is a direct application of the ideas of in business practice. This papers purpose is to explain the role of ethics and social responsibility in building a strategic plan while incorporating the stakeholder interests. Business execs have the responsibility to adhering to the unspoken ethics they have only not taught but also have enforced by society and the law.

Ethics are inherently common sense decisions made by those in authority with the power to affect an entire organization. When, business executives make decisions they must consider business ethics and the organizations (stakeholders) values. Once the essential questions ask is, “Do the organization’s values reflect accepted society values? (Young, 2004) Business executives must execute strategic business plans where they take into account not only each value associated with each choice, but the consequences of each choice.

The interests of the stakeholder are one of the prime obligations of an organization. The demands of the stakeholders are generally to increase profits; this is echoed by economist Milton Friedman, the “one and only one social responsibility of business” is “to increase its profits,” assuming an honest and open marketplace”. (Bigelow, 2013), According to Friedman also that corporations owe no responsibilities to society. However, critics will disagree that corporate social responsibility is always to put the customer first, which ensures a customer’s happiness and loyalty.

Stakeholders are not only investors into companies but they also have voting power, which carries social, and financial influence within the company. Their social responsibility is to the customers and to the employees (Jones, 2012). They have decision power, and ultimate control over allocation of resources. Corporations and organizations ultimately exist to satisfy the needs and agendas of the stakeholders. The problem lies in, however; when the needs and the agendas of the stakeholders can blur the line between what is ethically right and what is considered against the law.

The organization’s obligation to the stakeholder is as much as a priority as the relationship to the public. “The relationship between a customer and a firm exists because of mutual expectations built on trust, good faith, and fair dealing in their interaction” (Ferrell). When creating a strategic business plan the organization must incorporate its social responsibilities for the customer, and prevent any ethical dilemmas.

Clear examples that recently have captivated the news over the decade has been the highly publicized cases of Waste Management, Enron, WorldCom, Tyco, HealthSouth, which exaggerated earnings to meet the expectations of stakeholders, Freddie Mac, AIG, Bernie Madoff, and host of others. These examples of accounting fraud, manipulation of books, and stealing from clients made by top executives in the position to meet the expectations of stakeholders and not making ethically sound decisions.

To prevent these scandals from occurring, ruining not only the organization, the employees but also the public’s faith within the corporate world, according to research ethical risk management is an option dependent on the infrastructure in which it promotes ethical conduct and standards. The directives and the support from management in the way it manages potential problems with the lack of ethical standards. Because of the number of scandals not only have businesses implemented stronger measures for ethical practices but also have the legal systems. The establishment of the

Sarbanes-Oxley Act (SOX) in 2002, which came after the scandal of WorldCom, was because the number of major corporations collapsing under the weight of their own unethical practices. According to the SEC, “the Act mandated a number of reforms to enhance corporate responsibility, enhance financial disclosures and combat corporate and accounting fraud, and created the “Public Company Accounting Oversight Board,” also known as the PCAOB, to oversee the activities of the auditing profession” (SEC, 2012). Ethics is a fundamental part of compliance and governance systems.

Ethics explicitly should integrate into the elements of strategic planning in businesses. In determining the roles that factor into managing stakeholder’s interests ethically organizations must first take into consideration that the business is the first line of defense in taking responsibility for managing and supervising corporate responsibility effective in accordance with the level of influence the business set by the organization. Executives in a position to communicate to stakeholders must always implement ethical decisions when balancing their needs and the organizations’.

The executives must be responsible in providing clarification and verification of ethical standards in place. The executives must drive the culture and work environment of compliance toward ethical standards and practices to ensure the effectiveness. Business ethics is important in every organization and the main responsibility is to act with integrity and honesty. References Ferrall, O. C. (2004). Business ethics and customer stakeholders. Academy of Management Executive, 18(2), retrieved from http://danielsethics. mgt. unm. edu/pdf/Customer Stakeholders.

pdf. Bigelow, L. (2013). What are the social responsibilities of a company to its stakeholders? Hearst Newspapers, Retrieved from http://smallbusiness. chron. com Heathfield, S. (n. d. ). Inspirational quotes for business and work: Integrity. Retrieved from http://humanresources. about. com Young, P. (2004). Ethics and risk management: Building a framework. Risk Management, 6(3), 23-34. Retrieved from http://www. jstor. org “The Laws That Govern the Securities Industry. ” (2012). SEC. Retrieved from http://www. irmi. com/expert/articles/2005/head02. aspx.

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  • University/College:
    University of Chicago

  • Type of paper: Thesis/Dissertation Chapter

  • Words: 1438

  • Pages: 6

Business ethics

Introduction In recent years, accounting ethical breaches has emerged as a major problem for most organizations. With growth of businesses, the number of accounting ethical breaches has also increased. Accounting ethical breaches may be defined as the misappropriation and misconduct of financial data by the auditors and accountants of the company (Duska & Ragatz, 2011). The accounting ethical breaches not only affect the organization, but also the stockholders involved with the organization. This paper will discuss the accounting ethical breach in Enron.

This paper will also discuss ethical issues, accounting ethical breaches and the recommendations to prevent such breaches. Ethical Behavior in Current Business and Regulatory Environment With increasing number of corporate ethical breaches, the role of unethical behavior has decreased in organizations. The organizations are more supportive to ethical behavior ensuring risk, compliance and governance culture within organization. As a part of this culture, effective communication around ethical practices has been followed by the organization.

Since ethical breaches are mainly done for the sake of money, rewarding and ethical practices has effectively helped organizations to minimize the ethical breaches (Ferrell & Fraedrich, 2009). At the same time, ethical breaches have not only affected the image of the company, but are also responsible for its failure. This is also one of the major reasons why current businesses and regulatory environment are more conductive to ethical behavior. It is the result of its impact that organizations have introduced Sarbanes-Oxley 404 compliance, a guideline that helps organizations to meet the criteria of ethical behavior.

Wall-Mart has also been accused of violating ethical policies accepting discounts from vendors, who are eager to work with company. This has subsequently affected the image of the company in the market. Similarly, right leadership values are also given preference at the workplace as a part of this ethical behavior. The survey conducted by National Business Ethics states that strong ethical culture helps organization from risky ethical behavior that may affect the image of organization. Enron and its Accounting Ethical Breach

Enron was an USA multinational company one of the world’s leading Electricity and Natural Gas Company. During the year 2000, company has claimed revenue of $101 billion and it was the most innovative company for last six consecutive years (Enron, 2012). But with its planned accounting fraud, which is popularly known as Enron scandal, the company became symbol of willful corporate fraud and corruption. The scandal of Enron has revealed the shady practices of organizations and given birth to new forensic accounting. There was illegal transfer of fund into Enron’s top level officials.

At the same time, complex scheme of off-balance sheet partnership was also responsible for its collapse under mountain of debt. In order to conceal the losses, Enron used special purpose entities. Through this means, organization tried to move its assets and debt off from balance sheet by making increase in the flow of cash through books. As a part of this scandal, organization has also collapsed the leading electricity trading market (Cristina & Lucian, 2012). Organization has to file for its insolvency under United State Bankruptcy Code.

Similarly, price of the stock has also gone to a significant decline from $90 per share to less than $1 per share. As a part of this scandal, its key personnel have also faced legal actions like prison and fine. Ethical Issues and Management Failure Organizational ethical issues were reflected from the behavior of its CEO itself as the actions taken by CEO were not justified from any moral behavior. It was during the year 1988, when it was found that millions of dollars has been transferred into personal account of two employees.

At the same time, the insider trading was also revealed, when the investors were told to buy shares and the top officials of the company were selling their shares as fast as they can (Li, 2010). The fraudulent bookkeeping, questionable loans have also revealed the unethical practices in the organization. The other companies created outside of America also helped to identify the ethical issues within Enron. Wire fraud, money laundering, securities fraud, mail fraud, and conspiracy have also contributed to identify the ethical issues in organization.

Since the management itself was involved with the accounting ethical breaches, there was no question of management failure to create ethical environment (Dembinski, 2012). With such motives, it was not possible to create an ethical environment for its employees. Its top level executives were aware of the situation that the organization was not interested to follow ethical norms. Violated Accounting Guidelines Enron has violated wide number of accounting guidelines that has resulted into the failure of firm. Manipulation of balance sheet was one of the violations that company has made.

Company has misrepresented the data in its balance sheet to gain profit from the market. It has helped organization to increase the price of its stock and when corrections were made the price of stocks fall to drastic level (Sharp, 2005). Similarly, many complex tactics were also used to misrepresent the financial statement. Its financial statement disguised loans as cash flows that have helped organization to show maximum profit in order to attract investors. Apart from this, full disclosure principle was also violated from the company as no information was disclosed in the notes to the statement.

Accounting guidelines state that as far as the organization is continuing, it should carry out its objectives and commitment, while Enron has never maintained such guideline and violated all such rules. The result of violation came out as a failure to the company. Company has made loss of $609 million as a result of this violation (Niskanen, 2007). Measures to Prevent Ethical Breach In order to prevent ethical breach within organizations, there are several measures that should focus on removal of conflicts of interest between the parties.

The accountant should strictly be asked to work on the books. It would not allow the key personnel within organization to misrepresent the financial data. Enron should have simplify its partnership with other companies, so that transparency could be maintained within the transactions between organizations (Foster & Lasser, 2010). Through reducing this complexity, the push around ability and hidden debt of the company could have been reduced. Similarly, financial disclosure system should be formulated, so that each transaction of the company can be recorded.

Direct regulations and standards should be formulated, so that it could prevent ethical breach within organizations. Continuous review process of every auditing report also needs to be followed in the organizations. The integrity of executives is important from this concern. In order to implement all these measure, the most important aspect is to restructure the whole organization accordingly. Loyalty to the ethical standards is very important to effectively implement these measures to prevent ethical breach (Foster & Lasser, 2010).

An effective reporting system should be formulated to ensure that the measures suggested could easily be implemented within organization. Conclusion On the basis of above discussion, it could be said that ethical behavior within organizations is very important with increasing number of accounting frauds in organizations. At the same time, the personal interest of the key members of Enron was mostly responsible for its failure and it is important to ensure the responsibility of promoters in order to avoid such ethical breaches in other organizations.

? References Cristina, D. & Lucian, C. (2012). Fraud Case Analysis: Enron Corporation. Retrieved from http://steconomice. uoradea. ro/anale/volume/2007/v2-finances-accounting-and-banks/41. pdf Dembinski, P. (2012). Enron and World Finance: A Case Study in Ethics.

Retrieved from http://www. strongwindpress. com/pdfs/TuiJian/Enron%20and%20World%20Finance%20-%20A%20Case%20Study%20in%20Ethics. pdf Duska, R. & Ragatz, J. (2011). Accounting Ethics. USA: John Wiley & Sons. Enron. (2012). Retrieved from http://www. enron. com/ Ferrell, O. & Fraedrich, J.

(2009). Business Ethics: Ethical Decision Making and Cases. USA: Cengage Learning. Foster, I. & Lasser, R. (2010). Professional Ethics in Midwifery Practice. USA: Jones & Bartlett Publishers. Li, Y. (2010). The Case Analysis of the Scandal of Enron. International Journal of Business and Management. 5 (10), 33-41. Retrieved from http://ccsenet. org/journal/index. php/ijbm/article/viewFile/7627/5855 Niskanen, W. (2007). After Enron: Lessons for Public Policy. USA: Rowman & Littlefield. Sharp, D. (2005). Cases in Business Ethics. USA: SAGE.

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  • University/College:
    University of Chicago

  • Type of paper: Thesis/Dissertation Chapter

  • Words: 999

  • Pages: 4

Business ethics

In the culture of TAP and its ethical procedures the company was misalign. Durand was used to a different way of cultural ethical procedures involving a sense of working in a healthy environment where accountability of actions were being uphold by everyone at his workplace. In occasions companies offer great incentives but not reporting what exactly is required of an employee. In this matter TAP was involving employees, professionals and the Government in an established fraud hiding the reality of what the companies culture was really about.

The money laundry, drug sales and not to mention the customers and their health. The misalignment of the company was not being ethically with the federal laws and regulations since the health and drug administration have guidelines that must be followed to ensure that customers are getting the right medications. Durand tried his best to change that culture of abuse and criminal acts by adding some of his ideas to continue with his ethical perspective of how a company should be ruined without lies and following a moral statue for the good of everyone.

In cases of this nature employees are tested to their limits with monetary or higher incentives easy to accept but do not understand the importance of being ethical. An individual should always be align with what is right at all time Durand did what he could he knew all alone that TAP was not a company he could work for regardless of any amount offered to him since others will be paying the price. A company as this one, once it becomes under fire does not care about their elite employees all they care for is their own well-being.

Douglas Durand left a company had been with for 20 years for a company that was in need of resurgence in order to become a major player in the prostate and ulcer pharmaceutical medicines. TAP pharmaceutical was a company formed by Takeda Chemical Industries and Abbot Laboratories 25 years previous to offering Douglas the job. Douglas had an ethical dilemma starting out. He had to make the decision to risk leaving a company he was well established with and going to a fairly new company. Mr. Durand had quite a difficult unethical culture to repair at TAP Pharmaceuticals.

TAP culture was to make money at all costs without any responsibility socially and legally. TAP culture was to take short cuts and profit without care. The company did not have a legal counsel, they used their money to influence physicians to purchase their medicine, they did not report free samples they were giving out, etc. Douglas initially dealt with the culture, but eventually his ethics and morals came back to him. Douglas did the right thing by being concerned with what the company was doing. He did make several attempts to change the cultural of the company but was rejected.

He should have been aggressive about how he wanted the culture to be from the start. He was submerged in the culture for a long time before he decided to take action. Offering the bonuses to employees for reporting and correctly doing their accounting was a great move by Mr. Durand. He was facing an informal culture system that was not aligned. There was not anything ethical or right about this company except for the fact that they sold legal drugs and not illegal. The Company was missing a formal side to the company.

They did not follow correct policies or anything. The company was driven by profit only and did not care about actually running the company the way it should be run. Douglas attempted to bring formality and more structure to the company. Douglas Durand tried to influence change in his culture but yet failed, because he did not have the authority, or the support from those who did all the company cared about was to make profit and did not care of the ethical profession in the workplace. Douglas Durand aimed for the change in cultural efforts and did not succeed.

As he tried influence change the result, was able to target change in isolated cultural systems, but not throughout the culture as a whole. Feeling guilty he decided to change the culture of the organization by providing incentives to employees who documented accurate records (Trevino & Nelson, 2011). Though employees adopted this new senior management stopped the incentive program creating employees to return to unethical behavior (Trevino & Nelson, 2011) An important message from this case is that culture change is very difficult.

Even someone at a relatively high VP level, will not be able to change culture without substantial support from senior management for a company-wide change effort. Once a company sees that there making profit even though its in an illegal way they will continue and not care about the morals of the company as a whole. Many times employees will not say anything in regards of things happening in the company because they are afraid of being fired. In this case Douglas tried his best without fear but unfortunately things didn’t go well.

Very few people now a days take risk especially when entering a new workplace at a high level. Many people adapt to the ways the company works. Trying to change people in a workplace to become ethical is hard especially when they don’t see it from people above them. Ethics in a workplace is very important but in order for it to function everybody in the workplace needs to have some ethical behavior. References:Trevino, L. K. , & Nelson, K. A. (2011). Managing business ethics: Straight talk about how to do it right (5th ed. ). Hoboken, NJ: Wiley.

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  • University/College:
    University of Arkansas System

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  • Words: 405

  • Pages: 2

Business ethics

The role that ethics plays in strategic management has changed drastically in the last 20 years. It was rare to find companies that had ethics in the forefront of their management plans in the 1990s. Business was all about maximizing profit/shareholder equity. Incidents like Enron’s bankruptcy caused a big change in management style. “Enron’s failure in 2001 represents the biggest business bankruptcy ever while also spotlighting corporate America’s moral failings. ” (Silversmith, 2013) That spotlight showed a moral environment fraught with greed and shortsightedness where long term growth for companies was concerned.

New government regulations on business make it more important that the Board of Directors, CEO and CFO takes more responsibility for how they run the company. Shareholders are also demanding more of the leaders of businesses. For a time, shareholders did not pay attention to how the company was run as long as they received their dividends. Now they are are much more aware. Many people were hurt financially by the bankruptcies and re-valuations of those companies with questionable practices. Pursuit of profits is no longer the main emphasis for many companies.

The emphasis is now on ethical issues including environmental, employee satisfaction, and consumer satisfaction. “Ethics and integrity are at the core of sustainable long term success. ” Says Richard Rudden, managing partner at Target Rock Advisors in New York State. “Without them, no strategy can work, as Enron demonstrated, enterprises will fail. That is despite having some of the ‘smartest’ guys in the room. ” Another area that was affected by the lack of corporate ethics was the mortgage industry. Regulations were relaxed, and some larger banks took it as a chance to make a lot of money very quickly.

They wrote bad loans for people that could not pay. Using sub-prime methods led to a lot of people that could not afford to buy a home getting mortgages. When they could not pay, the banks found is financially more advantageous to foreclose rather than try to work with the borrowers. They are still doing that to this day, even with government mandated refinance programs. Unfortunately, some people/organizations take longer to learn a lesson than others. References Silversmith, K. (2013, May 14). Enron, Ethics and Todays Corporate Values. Retrieved from Forbes. com.

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  • University/College:
    University of Chicago

  • Type of paper: Thesis/Dissertation Chapter

  • Words: 987

  • Pages: 4

Business ethics

Ethics are principles based on doing the right thing. They are the moral values by which an individual or business operates. In theory, a business or individual can act ethically and still attain ultimate success. A history of doing the right thing can be used as a selling point to heighten a person’s or organization’s reputation in the community. Not only are ethics morally valued, they are backed by legal repercussions for failure to act within certain guidelines. Finance Manager Ethics: The ethics of a finance manager should be above approach.

This includes more than just acting in an honest, above-board manner. It means establishing boundaries that prevent professional and personal interests from appearing to conflict with the interest of the employer. A finance manager must provide competent, accurate and timely information that fairly presents any potential disclosure issues, such as legal ramifications. The manager is also ethically responsible for protecting the confidentiality of the employer and staying within the boundaries of law. Importance Of Ethics: Businesses have to meet economic expectations, they also have ethical responsibilities.

Everyone, from the bottom to the top of the organizational chart, must take care to meet these responsibilities. According to Dr. Jill Young, integrity is the most important ethical concept because it covers such a broad area. “If you act with integrity, ethical behavior is just a natural progression,” she says. “Those who have integrity are guided by a set of core principles that influences their decisions and behaviors. ” What Role Should Ethics Play In Business? Ethics are based on both individual beliefs and standards in society. They vary from person to person, situation to situation, and culture to culture.

Society’s ethics are usually minimum standards for decency and respect of others. Individual ethics are personal beliefs about what is good and bad. Business ethics are tied to both society’s ethics and the ethics of the individuals who work for, and buy products from, the company. A Code of Ethics: Businesses face ethical questions every day concerning the products or services they sell and the way they deal with people inside and outside the company. Many companies choose to operate according to a code of ethics—a document that explains specifically how employees should respond in different situations.

A code of ethics is especially useful when problems arise. For example: In the Chicago area in 1982, someone contaminated several bottles of Tylenol with poison, and seven people died as a result. This was the first case of product tampering of its kind. Johnson & Johnson, the manufacturer of Tylenol, followed its code of ethics and immediately pulled every package of the product off the shelves throughout North America, even though this was very expensive for the company. Johnson & Johnson also changed its packaging so it would be much more difficult for someone to contaminate the product in the future.

The recall and repackaging effort cost the corporation about US$100 million, but it also showed customers that the company cared about their safety. A code of ethics helps different people approach problems in the same way. Many companies have gone beyond simply writing a code and have established educational programs to help employees learn to behave more ethically. Program topics range from making personal calls during business hours to handling employee layoffs. The problem with creating and applying a code of ethics is that drawing a line between right and wrong isn’t always easy.

In Canada, the law details acceptable business behavior, but companies can still behave unethically without actually breaking the law. Like the law, no code of ethics can provide guidance for every possible situation. Although codes of ethics sometimes help people make decisions, they are not conclusive guides to distinguishing between right and wrong, and they are not necessary for every company. As a result, some would say that people should rely on their own judgment first. Principles of Admirable Business Ethics: 1.

Be Trustful: Recognize customers want to do business with a company they can trust; when trust is at the core of a company, it’s easy to recognize. Trust defined, is assured reliance on the character, ability, strength, and truth of a business. 2. Keep An Open Mind: For continuous improvement of a company, the leader of an organization must be open to new ideas. Ask for opinions and feedback from both customers and team members and the company will continue to grow. 3. Meet Obligations: Regardless of the circumstances, do everything in power to gain the trust of past customer’s and clients, particularly if something has gone awry.

Reclaim any lost business by honoring all commitments and obligations. 4. Have Clear Documents: Re-evaluate all print materials including small business advertising, brochures, and other business documents making sure they are clear, precise and professional. Most important, make sure they do not misrepresent or misinterpret. 5. Become Community Involved: Remain involved in community-related issues and activities. 6. Maintain Accounting Control: Take a hands-on approach to accounting and record keeping, not only as a means of gaining a better feel for the progress of company, but as a resource for any “questionable ” activities.

Gaining control of accounting and record keeping allows to end any dubious activities promptly. 7. Be Respectful: Treat others with the utmost of respect. Regardless of differences, positions, titles, ages, or other types of distinctions, always treat others with professional respect and courtesy. | “We must, therefore, consider the right way of performing actions, for it is acts, as we have said, that determine the character of the resulting moral states … ” (Aristotle)|.

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  • University/College:
    University of Chicago

  • Type of paper: Thesis/Dissertation Chapter

  • Words: 5250

  • Pages: 21

Business ethics

The term paper on ‘Ethical State and Ethical Practices in CHEVRON’ has been made focusing on the outline of the Code of Ethics of the specific organization and how it is practiced in the organization. The information was collected from primary and secondary research. Primary data was collected through survey which was used to determine response of both management and employee toward the code of ethics. Secondary data was collected through library research. The information gathered to understand the boundary addressed in the code of ethics as well as its application.

It discusses the ways of how can this code be successfully communicated and executed within the scope of the report. It also tries to link the impact of the ethical misconduct in an organization to its subsequent procedures to be followed to encounter this impact with a view to judge the effectiveness of the disciplinary process. According to the information and suggestions, the report sets out to do the qualitative research. On final notes, the report provides a summary based on the findings. The depth of the study allows us to summarize the findings into a conclusion.

The report reveals that the organization has a well-organized code of ethics. It reveals that guidelines are applied equally to all the employees.. Majority of the employees are satisfied with the ethical guidelines provided by the organization. They feel like valued citizens of the organization as their opinions are considered. 1. 0 Introduction A code of conduct is intended to be a central guide and reference for users in support of day-to-day decision making. It is meant to clarify an organization’s mission, values and principles, linking them with standards of professional conduct.

As a reference, it can be used to locate relevant documents, services and other resources related to ethics within the organization. A code is an open disclosure of the way an organization operates. It provides visible guidelines for behavior. A well-written and thoughtful code also serves as an important communication vehicle that “reflects the covenant that an organization has made to uphold its most important values, dealing with such matters as its commitment to employees, its standards for doing business and its relationship with the community.

” Ethical codes are adopted by organizations to assist members in understanding the difference between ‘right’ and ‘wrong’ and in applying that understanding to their decisions. An ethical code generally implies documents at three levels: codes of business ethics, codes of conduct for employees, and codes of professional practice. A code of business ethics often focuses on social issues. It may set out general principles about an organization’s beliefs on matters such as mission, quality, privacy, or the environment.

It may delineate proper procedures to determine whether a violation of the code of ethics has occurred and, if so, what remedies should be imposed. The code of ethics links to and gives rise to a code of conduct for employees. A code of conduct for employees sets out the procedures to be used in specific ethical situations, such as conflicts of interest or the acceptance of gifts, and define the procedures to determine whether a violation of the code of ethics occurred and, if so, what remedies should be imposed.

Moreover, a code of practice is adopted by a profession or by a governmental or non-governmental organization to regulate that profession. A code of practice may be styled as a code of professional responsibility, which will discuss difficult issues, difficult decisions that will often need to be made, and provide a clear account of what behavior is considered “ethical” or “correct” or “right” in the circumstances. Companies have been writing codes of business conduct for decades, but the role they play in shaping corporate culture is changing dramatically.

The focus is shifting from writing a comprehensive code of rules to regulate conduct to leveraging a values-based code that inspires principled performance among employees, management and executives. The focus of this report is to put a light on the state of ethics and analyze the ethical practice of an organization operating in Bangladesh. Therefore we have conducted our research on Chevron Bangladesh, a multinational company operating in Bangladesh.

This report intends to cover the interrelation between the code of ethics and its actual practice in today’s corporate culture. 1. 1 Origin The report titled “State of Ethics And Ethical Practices in Chevron” has been prepared for Mr. Neaz Ahmed, Course Instructor, Managing People at Work (M-501) as a partial requirement for the course. 1. 2 Objective The broad Objective of the report is to elaborate the guidelines of the code of ethics and analyze its practice in the organization. The broad objective is carried out through the findings of some specific objectives.

The specific objectives are as follows: • To understand the outline of the code of ethics of the organization • To identify the effective communication of the code of ethics to the employees • To address the areas of employee protection • To learn how employees can be motivated to comply with the code of ethics • To recognize the impact of the ethical practice on corporate culture 1. 3 Scope The focus of the study was to analyze the ethical practice of an organization in Bangladesh. Accordingly, the research was conducted on Chevron Bangladesh, a multinational organization.

• The selection of the organization, Chevron Bangladesh, enabled us to have a look at a standard code of ethics as the organization is serving worldwide. • The report was generated based on the opinions given by the HRM personnel of Chevron Bangladesh. Findings and conclusions are based on judgments provided by the respondents of our questionnaire which are often subjective. 1. 4 Limitation • Due to the company policy, we were restricted from conducting a formal survey on the general employees. Thus no quantitative analysis was made possible.

• The data collection was basically through the HR Personnel that may generate a little biasness on the findings. • The ethical practice of Chevron may not reflect the overall scenario of the corporate culture of Bangladesh. 1. 5 Literature Review 1. 5. 1 The evolution of codes Codes of conduct extend back to before World War II. One of the earliest company codes was Johnson & Johnson’s Credo, published in 1943 after General Robert Wood Johnson urged his fellow industrialists to embrace corporate responsibility to customers, employees, the community and stockholders.

Worldwide interest in business ethics and codes of conduct took off in the 1980s. Among the first large corporations to adopt codes of conduct were General Electric, General Dynamics, Martin Marietta (now Lockheed Martin) and several other defense contractors who saw business ethics programs as a way to self-regulate rather than submitting themselves to government regulation. In 2002, the Sarbanes-Oxley Act further bolstered the importance of codes of conduct by requiring public companies to have a code of conduct for top executives (and, if they didn’t have one, to explain why).

Then in 2003, both the New York Stock Exchange and the Nasdaq required listed companies to adopt and disclose a “code of business conduct and ethics” that applies to all employees and directors. Together with these regulatory developments, having a code became practically a mandate for public companies. 1. 5. 2 Signs of Code Effectiveness and Success Many corporate leaders agree that “doing the right thing” is its own reward, but they are also finding that a strong ethical culture benefits the bottom line.

In most organizations, the effects of having an inspiring code have been subtle but equally meaningful. Codes of conduct and code education are slowly permeating many corporate cultures, both helping employee understanding of their organization’s values as well as improving employee attitudes toward management. Current research by LRN shows that codes of conduct are having a positive impact on employee behavior and perceptions. Among the findings: • Seventy-nine percent of employees say their organization has a written code of conduct or ethics.

• Of those, 83 percent believe that management genuinely wants to promote ethics and integrity in the organization, 70 percent think management is trying to comply with the law, and 61 percent believe their organization has a code of conduct or ethics so management can protect itself. • Seventy-three percent of employees whose organizations have a written code of conduct or ethics say it makes the organization a better place to work. • Sixty-two percent think the code has helped alter behavior or direct decisions. • Eighty-two percent say they often apply their understanding of the code on the job.

• Forty-six percent of respondents say that employees know the rules, but that they don’t always follow them. • Only 4 percent of employees said the code had no effect. Applying Code of Conduct/Ethics on the Job Which, if any, of the following describe how the code of conduct or ethics at your company has influenced your company’s workplace? It has helped employees understand the conduct that company values 76% It has made it a better place to work 73% It has helped to alter behavior or direct decisions made on the job 62% People know the rules, but they don’t always follow them 46% It has had no effect 4%

1. 5. 3 Ethics Management Code of Ethics: Codes of ethics are norms, principles and behavioral rules of ethics set in a written form that contribute to clarifying what is considered legitimate and highly responsible in an everyday corporate business. Hotline: Hotline services can be provided within the company or out of company and offer notification opportunities for the actors concerned. Under the US Federal Sentencing Guidelines internal reporting mechanisms have to allow employees anonymity or confidentiality without fear of retaliation.

Eighty-three percent of 200 major companies that have adopted the Code of Ethics operate hotline services and have elaborated reporting regulations. Ethical Monitoring: Ethical monitoring is as crucial as an annual financial control since this allows assessment of how fundamental principles and behavioral rules laid out in the Code of Ethics are applied in everyday practice. Ethical Audit: An ethical audit is a process that analyses and measures corporate activities in ethically sensitive areas. 1. 6 Research Methodology 1. 6. 1 Research Method To complete this term paper qualitative methods are used.

This research is mostly descriptive in nature. To understand actual ethical practices qualitative method is appropriate. First fixed questionnaire was developed and were modified. Then interviews were taken and the findings were analyzed. Finally report was compiled and completed. 1. 6. 2 Data Collection Method The required data for this study was collected in two ways- • Primary Data Collection & • Secondary Data Collection Primary data was collected by interviewing HR representative with the fixed questionnaire, and then interview of other employees were taken to gather further information.

Secondary data was collected from – • Different documents or reports • Various web Sites • Different books • Previously collected data 2. 0 Company Overview Chevron is one of the world’s leading integrated energy companies and conducts business worldwide. Their success is driven by their people and their commitment to get results the right way—by operating responsibly, executing with excellence, applying innovative technologies and capturing new opportunities for profitable growth. Chevron is involved in virtually every facet of the energy industry.

Chevron explore for, produce and transport crude oil and natural gas; refine, market and distribute transportation fuels and lubricants; manufacture and sell petrochemical products; generate power and produce geothermal energy; provide energy efficiency solutions; and develop the energy resources of the future, including research for advanced bio fuels. Chevron supports Bangladesh’s goal of maximizing the nation’s energy potential by actively investing in projects that deliver more gas to Petrobangla, the national oil company. They have developed natural gas production in three fields: Jalalabad, Moulavi Bazar and Bibiyana.

In 2011, total daily production averaged 915 million cubic feet of natural gas (434 million net) and 4,000 barrels of condensate (2,000 net). Condensate is liquid hydrocarbon produced with natural gas. 2. 1 Company Roots Chevron trace their beginnings to an 1879 oil discovery at Pico Canyon, north of Los Angeles, which led to the formation of the Pacific Coast Oil Co. That company later became Standard Oil Co. of California and, subsequently, Chevron. They took on the name Chevron when they acquired Gulf Oil Corporation in 1984, nearly doubling our worldwide proved crude oil and natural gas reserves.

Chevron’s merger with Gulf was then the largest in U. S. history. 2. 2 Global Scope Chevron’s diverse and highly skilled global workforce consists of approximately 57,000 employees and about 3,800 service station employees. In 2011, Chevron’s average net production was 2. 673 million barrels of oil-equivalent per day. About 75 percent of that production occurred outside the United States. Chevron had a global refining capacity of 1. 96 million barrels of oil per day at the end of 2011. 2. 3 Technology and Emerging Energy Technology is propelling Chevron’s growth.

They are focusing on technologies that improve our chances of finding, developing and producing crude oil and natural gas. 2. 4 Environment and Safety As a company and as individuals, Chevron takes great pride in contributing to the communities where we live and work. They also care about the environment and are proud of the many ways in which their employees work to safeguard it. 2. 5 Company Vision • Chevron safely provide energy products vital to sustainable economic progress and human development throughout the world • They are people and an organization with superior capabilities and commitment • They are the partner of choice.

• They earn the admiration of all our stakeholders — investors, customers, host governments, local communities and our employees — not only for the goals they achieve but how they achieve them • Chevron delivers world-class performance 2. 6 Company Values • Integrity • Trust • Diversity • Ingenuity • Partnership • Protecting People and the Environment • High Performance 2. 7 Ethical Practices Chevron seeks to develop a culture in which everyone believes that all incidents are preventable and that “zero incidents” is possible. This requires active leadership and all employees to be engaged.

Chevron’s Operational Excellence Management System (OEMS) describes the company’s uniform approach to systematic management of safety, health, the environment, reliability and efficiency. Lloyd’s Register Quality Assurance, Inc. , attested that OEMS is implemented throughout the corporation and that it meets all the requirements of both the International Organization for Standardization’s environmental management systems standard (ISO 14001) and the Occupational Health and Safety Assessment Series requirements for occupational health and safety management systems (OHSAS 18001).

Business Ethics: Chevron takes seriously the conduct of its employees and requires questionable conduct to be reported. This may include, for example, violations of company policy or of the Chevron Business Conduct and Ethics Code. One reporting method is the Chevron Hotline, which is operated offsite by Global Compliance Services (AlertLine®), an independent agent. Governance: For Chevron, good corporate governance means being transparent with and responsive to stockholders while managing the company for long-term success.

Extractive Industries Transparency Initiative: Chevron believes that the disclosure of revenues received by governments and payments made by extractive industries to governments could lead to improved governance in resource-rich countries. The transparent and accurate accounting of these funds contributes to stable, long-term investment climates, economic growth and the well-being of communities. Ethical Decision Making: Ethical decision making is essential to the success of a Company. Some decisions are obvious and easy to make; others are not.

When faced with a difficult situation, asking the questions below can help to make the right ethical decisions. 3. 0 Ethical Practices at Chevron 3. 1 Code of Ethics The company has its own code of ethics. The Code explains Chevron’s policies for how they conduct business around the world. Each of the — employees, officers and members of the Board of Directors alike — must commit to understanding this Code and abiding by its principles. In a competitive global environment, everyone will sometimes encounter situations that will test his/her judgment and integrity.

When that test arises, employee can use this Code to answer the following questions before they act: Is it legal? If you think an action may be illegal, do not proceed. If you need information about which laws apply in a given situation, talk with your supervisor, manager or Chevron’s Law Department. Is it consistent with Company policy, including our Human Rights Policy? If the proposed action does not comply with Company policy, you should not do it. Is it consistent with The Chevron Way? Consider whether the action would be consistent with our Company’s core values.

If it were made public, would I be comfortable? Ask yourself if you would make the same decision if you knew that it would be reported on the front page of tomorrow’s newspaper. Four “yes” answers are required to qualify an action as ethical and in step with Chevron’s values. 3. 2 Dissemination of Code of Ethics Any individual is informed about the code of ethics whenever Chevron make a job offer to him/her. However, the Code cannot address every possible workplace situation. In such cases further assistance is given to the employee through updated training or post on company bulletin/notice board.

Employees are also guided to use the code appropriately by the following the subsequent ways- Read through the entire Code. • Think about how the Code applies to your job, and consider how you might handle situations to avoid improper, illegal or unethical actions. • Use the questions and answers to help clarify situations that you may encounter. • If you have questions, ask your supervisor, manager or contact another one of the resources listed in this Code. 3. 3 Application of Code of Ethics Each and every person of the organization shares the same policy of ethics.

The applied rules according to code of ethics are equal for the employees of all departments as well as of different level of management. There is no separate procedure for the top level management. If any high level personnel, even the CEO is accused of any ethical misconduct, he/she has to go through the same process of investigation and if proved guilty has to go all the way through subsequent punishment procedure like any other employee of the organization. 3. 4 Training on Ethics The organization carry out an computer based training on ethics annually. Name of the training is ‘Business Conduct and Ethics Code’.

Duration of the training is 60 minutes. This training is mandatory for employees of all departments and of all level of management. Combined effort of Human Resource department, Finance department and IC&T (Information, Communication and Technology) department ensures successful completion of this training. Employees are given a 30days period to go through the training. Employee will be notified through email about the training and the specified time period. They will receive notification throughout that particular time period until they complete the training.

If anyone fails to do the training within time he/she will be penalized for that. 3. 5 Management Support for Ethical Conduct Executive leaders of all departments regularly discuss about ethics and the importance of creating an ethical culture in management meetings or other settings. Timely and specific guidance from supervisors, managers, the Chevron Law Department, the Corporate Compliance group or local Compliance Coordinator are always available to support the employee. Head of Systems, Control and Compliance department act as an in-house ethics advisor for any types of ethical issues.

3. 6 Reporting Ethical Misconduct Each employee must speak up promptly if there is any reason to suspect that anyone in Chevron or its affiliates has violated Company policies or local laws. They must also report any activity that could damage the Company’s reputation. Employee can try to resolve the situation through a discussion with supervisor, local management or local Human Resources business partner. Another resource available to each of the employee is the Chevron Hotline. Anyone can call or submit a report to the Hotline, which operates24 hours a day, seven days a week.

This report will be taken seriously and investigated as appropriate by a third party. The organization recognizes that it is better to report a suspicion that turns out not to be an issue than to ignore a possible violation of the law or Company policy. 3. 7 Protection of Employee after Reporting There are no negative consequences to raising concerns in good faith using the hotline, and the Company assures employees that no retaliation will take place. Chevron does not tolerate any form of retaliation for reports made in good faith.

This includes blatant actions, such as firing, transferring, demoting, or publicly attacking someone, as well as more subtle retaliation, such as avoiding someone, leaving him or her out of professional or social activities, and so on. It includes actions taken by managers and employees alike. 3. 8 Monitoring Ethical Misconduct Ethical state of the organization is monitored quarterly. Human Resource department, Finance (compliance) department and IC&T (Information, Communication and Technology) department are equally responsible for this monitoring process.

3. 9 Disciplinary Methods Each of the employees must comply with Code, and with all Company policies. If they fail to do so, they may face disciplinary action, possibly including termination. Likewise any supervisor, manager, officer or director who is aware of any violation and does not promptly report and correct it may be subject to similar consequences. It is important to note, however, that violations of the Code, or the policies referred to in the Code, could result in discipline, including termination of employment and/or criminal prosecution.

All of these penalizing actions are taken silently so that these steps cannot create any form of inconsistency within the organization. Even if an employee is terminated according to the disciplinary procedure, he/she will not be informed about it until the time at which he/she has to leave the organization. After the order of dismissal the employee is not allowed to access any of the organization’s facilities. 3. 10 Reward System The company does not provide any rewards for complying with the codes or performing ethical behavior.

They believe that when each of the employees follows the Code, they communicate their commitment to the values that have made Chevron admired both as a business partner and as a valued citizen of the global community. If the employee rewarded for ethical behavior, they will treat it as an extra activity. But the organization expects ethical compliance as a prerequisite to work with them. 3. 11 Updating Ethical Guidelines Ethical guidelines of the organization are updated annually. Corporate Management department is responsible for these updating procedures.

The employees are made informed about these relevant updates through training materials, company bulletin, emails and company’s internal website. 3. 12 Previously Observed Unethical Conduct According to the company’s past records, unethical conduct that reported most frequently is abusing the company resources which include internet abuse, use of customer database for personal gain, revealing trade secrets to competitors etc.. Immoral behavior like- negligence at work, passing the blame, falsifications are never accounted within the organization.

3. 13 Challenges in Enforcing Code of Ethics The most frequent challenges faced by the authority in enforcing code of ethics are- Making the vast and diverse workforce respectful of the ethical guidelines, keeping up with the ethical standards while dealing with external bodies. It is not an easy task to provide a single, standard guidance for people of different level. Compliance with these standards also has to be ensured. In the course of doing business around the world, Chevron interacts regularly with different external bodies.

How they conduct themselves with these bodies can affect their reputation, their operations around the world, and their ability to work with government officials and other stakeholders. The trust that they depend upon from both local and global communities and governments is essential to their business, and they must continually earn it. 3. 14 Home Country versus Host Country Diversity is a fundamental value at Chevron. As stated in The Chevron Way, this means that “we learn from and respect the cultures in which we work. ” they also value “the uniqueness of individuals and the various perspectives and talents they provide.

” Discrimination is prohibited in hiring, rate of pay, promotion, demotion, transfer, layoff or termination. All of the employee must obey the letter and spirit of the law at all times, wherever they live or work. Sometimes there can be significant differences from one place to another and between regions within a single country. However, no matter where we work, we are all responsible for respecting all applicable laws and following the policies in our Code. 3. 15 Management’s Perception about Code of Ethics The management believes that they pursue a stable culture which results from a strong central governance.

According to them each and every cases of violation of ethics has been given due importance with proper, extensive investigation in a just way. As Chevron enjoys a strong reputation for honesty and integrity throughout the world, they feel that no major initiative should be taken at this point of time to improve their ethical culture. 3. 16 Employee Perception about Code of Ethics Employees of the organization perceive the code of ethics as a guideline which effectively defines their boundary and which is mandatory for protecting their rights at the work place.

The code of ethics as well as any update related to it is properly communicated to them. They are clearly informed about what to do and what not to do and also the proper channel to report any ethical misconduct. They feel protected and proud to be a part of such organization that follows guidelines equally applied for all employees. 4. 0 Conclusion A code is a tool to encourage discussions of ethics and to improve how employees/members deal with the ethical dilemmas, prejudices and gray areas that are encountered in everyday work. A code is meant to complement relevant standards, policies and rules, not to substitute for them.

According to our research, Chevron Bangladesh has a sound code of ethics. The guidelines are strictly followed ensuring harmony among the organization. Management serves proper support for employees to understand and to comply with the code of ethics. However, if employees face any situation not mentioned in the code they can consult with authorized personnel. If the employee is not comfortable discussing the matter with their supervisor, local management or Human Resources business partner, Chevron Hot Line would be an option for him thus confirming the employee satisfaction and commitment.

The codes of conduct offer an invaluable opportunity for Chevron Bangladesh to create a positive public identity for themselves which can lead to a more supportive political and regulatory environment and an increased level of public confidence and trust among important constituencies and stakeholders. References • Business Conduct and Ethics Code • Driscoll, Dawn-Marie and W. Michael Hoffman, Ethics Matters: How to Implement Values-Driven Management, 2000. • Principles of Stakeholder Management, The Clarkson Centre for Business Ethics, 1999.

• Krisztina Szegedi, PhD, Ethics codes and ethics management in the oil and gas industry • Kaptein, M. : Ethics Management – Auditing and Development the Ethical Content of Organizations. Kluwer Academic Publisher. • www. chevron. com/ • www. lrn. com/ Appendix Questionnaire with Answer 1. Does your organization have a written code of ethics? ? ? Yes ?No 2. If no, how do you define a conduct as ethical or unethical? 3. Does every employee in your organization receive the code of ethics? ? ? Yes ?No 4. How are the code of ethics or ethical guidelines (as applicable) disseminated?

(You can choose multiple options) ? ? To employees at induction ? ? To anyone who asks ? ? Incorporated in training materials ? ? Posted on the company bulletin board/notice board ? ?Posted on the company website or sent via e-mail ? Management meetings ?Others……………. 5. Is the code of ethics uniformly applied across the following? (You can choose multiple options) ? ? Different departments ? ? Different levels of management 6. Are employees required to certify that they will respect the code of ethics? ? ? Yes ?No 7. Does your organization carry out training on ethical work place conduct?

? ? Yes ?No 8. If yes, please select the training frequency, mechanism, department and level of management involved in such training. a) Frequency of Training ?Monthly ?Quarterly ?Semi-Annually ? ? Annually ?Other b) Mechanism (you can choose multiple options) ?Lectures ?Films and videos ?Case analysis ?Role playing ? ? Other Name: Business Conduct and Ethics Type: Computer based training Duration: 60 minutes c) Department responsible for conducting training (you can choose multiple options) ? ? Human Resources ? ? Other ? Finance ? IC&T (Information, Communication and Technology).

d) Level of Management Involved (you can choose multiple options) ?Middle Management ?Senior Management ? ? Other ? All level of management 9. How often do your executive leaders speak about ethics and the importance of creating an ethical culture in management meetings or other settings? ? ? Regularly ?Often ?Sometimes ?Seldom ?Never 10. As your organization is a multinational, are there differences between home-country and host-country ethical guidelines? ?Yes ? ? No 11. Does your organization have an in-house ethics advisor? If yes, please mention his/her designation. ? ? Yes ?Team head- System Control and Compliance.

?No 12. Is there a mechanism through which employees can anonymously report ethical misconduct that they have witnessed or faced? ? ? Yes ?No 13. Please select the extent to which employees in your organization report ethical misconduct that they have witnessed or faced. ?Regularly ?Often ? ? Sometimes ?Seldom ?Never 14. Is there a mechanism for protecting employees from retaliation upon reporting instances of ethical misconduct? ? ? Yes ?No 15. Which of the following consequences have been faced in the past by employees who reported ethical misconduct by their co-workers or supervisors? (You can choose multiple options).

?Unfriendly environment at work ?Adverse response from supervisor ?Barring from promotion opportunities or pay increases ? Relocation or reassignment 16. Does the code of ethics specify disciplinary measures for failure to comply with it? ? ? Yes ?No 17. If yes, what is the maximum severity of the discipline rendered? ?Verbal warning ?Written warning ?Suspension ? ? Dismissal 18. Are these actions taken silently or publicly? ? ? Silently ?Publicly ?Depends 19. What do you think is the most effective method for creating respect for ethics among those who violate the code of ethics?

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Business ethics Essay

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Business ethics Essay
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  • University/College:
    University of Arkansas System

  • Type of paper: Thesis/Dissertation Chapter

  • Words: 4920

  • Pages: 20

Business ethics

Introduction Today’s world is continually shrinking due to many factors, not the least of which is the rapid growth of international business. Four specific interlinking phenomena are occurring which present new problems to international business: a) the increase in offshore banking transactions; b) the continuing growth of multinational corporations (MNCs); c) the increasing instances of outsourcing business activities offshore and d) the equally increasing instances of locating and using suppliers of goods and services in developing countries.

All four of these phenomena are fueled by economics and they show no sign of abating anytime soon. Two aspects dealt in this paper are: a) the existence of perceived corruption in international business, including graft, kickbacks and preferential treatment and b) workplace conditions that are considered unethical by generally accepted world standards. There are many other aspects of international business which lend themselves to ethical examination, but they are not appropriate here. The approach taken is to examine some of the principal ethical philosophies of the last two hundred years in relation to international business, as follows: a) Immanuel.

Kant’s Categorical Imperative; b) early mercantilist philosophies; c) Distributive Justice; d) Ethical Relativism; e) Integrative Social Contracts Theory; f) Virtue Ethics; g) Confucian and Islamist ethics and h) pragmatic approaches to international business ethics. Then, by way of local comparisons, several local national situations are presented in order to clarify the problem. Finally, in order to address workplace ethics specifically, the SA 8000 Social Accountability standard is presented and analyzed as one approach to remedy a widely recognized situation which required positive attention.

Furtherj this standard is presented as a possible entry point toward developing a customer/supplier dialogue which may hole the promise of formulating a wholly new code of international business ethics, not simply another Western concept grafted onto the developing world. 1 Key ethical theories and concepts Kant’s categorical imperative: Immanuel Kant’s Categorical Imperative has become a mainstay in the study of ethics for the past two hundred years and has stimulated a considerable amount of both support and objection.

His assertion to “act only according to maxims which you can will also to be universal laws”^^ was seen to be in direct reaction to the relativist philosophies being propagated at that time and can also be seen as a defense of free will which was being called into question as well. Marias^^ points out that Kant’s purpose was to personalize ethics, not necessarily to institutionalize ethics. Kant’s ethics describe a “moral person”; not necessarily a “moral society” which is a key point in attempting to apply Kantian ethics to our world. Significant problems have been found to exist not within Kant’s ethics but in its applications.

Calder* perceives the lack of degrees of wrongness in Kant’s Categorical Imperative, stating that this is a major flaw in his ethics. Calder’s interpretation of Kant is that an act is either right ot wrong in a universal sense, not allowing for varying degrees. This would be a valid objection to Kantian ethics were it not for Kant’s intention to personalize ethics and to make the individual person responsible for his or her own actions. In this sense, Kant’s ethics are indeed universal in the sense that each person must decide what is right and what is wrong.

An argument could be made that in this sense, Kantian ethics can be applied universally, but with a less than satisfying sense of having identified a code of ethics that would fit like a sort of template over our world. It should also be noted that at the time Kant lived in the late 18″” Century, our world was just being discovered as highly diverse. European ethnocentrism was still very much in force and the “uncivilized” world was seen generally as a very undefined place.The intertwining effects of the growth of world trade, the rapid increases in colonialism and the onset of the industrial revolution stimulated additional efforts to address the people of the world at large. Early mercantilist philosophy:

The various mercantilist philosophies which emanated from the growth of colonialism and world trade presented a somewhat different viewpoint to (11)Advances In Management Vol. 5 (3) Mar. (2012) ethics. In the minds of the mercantilists, civil society would contain markets which would be self-regulating’ and government, business and nonprofit organizations would unite to create social accountability systems which would contain self-enforcing codes of conduct reinforced by the concept of shareholder and stakeholder pressures.

These concepts tend to continue to the present day in many business textbooks. However, these early mercantilist philosophies, propounded in the heyday of expansionism by the world’s trading nations, pointedly did not consider what effects mercantilism would have on the rest, of the world. These mercantilist philosophies provided a basis for the development of utilitarian ethics which would become popular in the following century with the writings of Jeremy Bentham and John Stuart MilP^ and which would eventually become the unofficial political philosophy of the British government throughout the colonial years and up to the present day. Distributive Justice:

The rapid growth of complex economic systems together with the “shrinking” of the social world gave birth to the concept of distributive justice. The concept has its origins in David Hume and John Locke and continues today in the writings of modern philosophers John Rawis and’ Robert Nozick. ^’ The internationalization of the world economy has further spurred discussion concerning how distributive justice might be applied to international business.

Unlike the ethics of early mercantilist philosophies and classical utilitarianism which both fit uneasily in the world of international business, there has been quite a lot of discussion concerning the ethics of distributive justice in this context. The principal questions tend to revolve around how (or whether) gains from international trade get distributed both within and between countries’* and whether or not basic human rights are observed in the practice of international business. ” This second question has also been expanded to discuss whether international business as a function has the obligation to offer help to the inhabitants of developing countries within which they do business.

Both concepts would seem foreign to the mercantilists and would pose awkward questions to the utilitarians. Ethical Relativism: The next logical stage of development in the thinking of international business ethics was termed ethical relativism.

To put the best face on it, this concept developed as a realization of the multifaceted cultural and social nature of today’s world and of the inherent difficulties today’s international business person experiences in attempting to deal with these differences. ^^ However, as many authors have pointed out, ethical relativism can be seen as moral approach to business, using cultural differences as an excuse to practice unethical behavior which might not be acceptable in one’s own society. ^”

The ethical relativism stage of international business ethics exists but does so in a weakened position due to criticisms leveled against it. Integrative Social Contracts Theory: An effective response to ethical relativism in international business has been a blending of ethical relativism and universally recognized ethical principles – at least universally recognized in the Western world – into a concept that has become known as integrative social contracts theory (ISCT).

-^-* Under this concept, certain universal ethical concepts would provide the basis for an ethical code of conduct for international business with the recognition of the validity of certain local ethical practices with the provision that in the event of conflict between the two, universal ethical principles would take precedence. This blending of ethical concepts satisfied most participants in international business activities but not all. One criticism leveled against ISCT is the problem of using empirical methods to discover and define what the authentic norms of a particular culture might be’^.

The approach taken by most ISCT practitioners lays open to question the overall effectiveness of a purely empirical approach, subject as it is to misinterpretation and lack of complete knowledge and understanding. As a result, critics of ISCT tend to call for a revival of the universal ethical principles that ISCT has largely replaced, causing discomfort particularly in the developing world which has never been completely comfortable with espousing the universal ethical code of former colonizing powers. Virtue Ethics: One possibility of a usable ethical code is the application of virtue ethics to international business.

This concept would formulate ethics based on the moral character of the people involved in international business. Clearly, virtue ethics appeals to those who wish the “right thing” to be done consistently” and studies have attempted to apply the concept to the international business arena. ‘”* Virtue ethics has also been proposed as a tool that international organizations could use to fight corruption. ‘ Nonetheless, it remains undeniable that virtue ethics is grounded in one’s own culture and moral beliefs and would necessarily provide a weak tool to formulate any sort of international business ethics code.

Confucian and Islamic ethics applications: One has only to look at the major cultures of the world to discover old and well developed codes of ethics. One such ancient culture – China – has adhered to Confucian ethical concepts for centuries. Magee^”* notes that philosophy, including ethical thought, proceeded in China unhindered by established religions, as was the case in the West and therefore developed a thoughtful ethical philosophy deeply seated in Chinese culture. Yew Chan^*^ points out that while most Confucian ethical thought parallels Western ethical thought, there are some significant divergences.

Interestingly, one of the principal differences from the Chinese point of view has to do with the West placing results ahead of ethical concerns. ” Also, the importance of social harmony which takes on a characteristic of ethics in Confucian culture is emphasized in China while downplayed in the West. ‘ (12)Advances In Management Vol. 5 (3) Mar. (2012) Another old and well established body of ethics is found in the Middle East, northern Africa and southeast Asia in the ethical traditions of Islam.

The Islamic tradition highly values such concepts as trust and benevolence and makes a major point of including justice and social balance in its code of ethics. ” Most of these concepts have their basic roots in pre-Islamic Arab culture based in turn on Bedouin culture, but they are reinforced by both the Koran and Sharia. Pragmatic approaches The various conflicts resultant from culture meeting culture in the international business world and the typical result of developed societies coming out on top (with the notable exception of the international petroleum industry) has generated a movement termed the United Nations sustainable development initiative.

^’ This convergence of business, political and ethical concerns and interests is the most recent attempt to “make things right” in the international business world in the face of increasing world poverty and hunger and undeniable global inequality. The most recent ethical solution proposed to begin to set things right internationally is called the “language of rights”. ‘*,This solution which flnds its roots in distributive justice, identifies the multinational corporation as one of the principle change agents and focuses on the capabilities of all concerned rather than on finding blame.

The emphasis is on denning and promoting the positive rights of all concerned. International Business Applications From a practical point of view, however, all of these concepts are somehow found wanting. The realities of wide chasms between the developed world and the developing world – which in many instances is not developing at all, relatively speaking – tends to make nonsense of any attempts to formulate and superimpose any sort of universal ethical code on the whole world.

In the old days of colonialism, the Western powers and Japan simply took what they wanted through dint of force and in the present day of neocolonialism these same powers – in the persons of international business – carry on that tradition in an updated manner.

Appeals to “post-conventional moral reasoning”‘”, in efforts to induce multinational corporations to develop mature corporate ethics in dealing with developing countries, have met with mixed results. Claims of widespread corruption in international business has stimulated a considerable amount of activity both in academia and in international organizations,” although strong arguments have been made that bribery and corruption are not cultural characteristics, as they have so often been called, but symptoms of cultural breakdowns under the pressures of a malfunctioning economy.

The local gift-giving customs in some cultures has been thoroughly examined and seem to be finally recognized as local custom and not necessarily as a form of graft. ^ One viewpoint sparsely practiced in the search for some resolution of the international business ethics conundrum is viewing business practices from the perspectives of other cultures.

Both Confuciani. st and Islamic ethical systems were very briefly noted above and cases drawn from the business experiences of people from a few speciflc countries are now examined by way of comparison in order to better understand the cultural diversity in today’s international business environment. Post-apartheid South Africa presents an interesting case study as the only developed economy on the African continent and as the principal trading partner of many African countries. South Africa also presents a model for global multinational corporations in how to deal effectively with developing economies. ^”

Through a mixed strategy of business promotion and social involvement in these countries and by limited political involvement with government ministries. South Africa has developed a favorable reputation throughout most of sub-Saharan Africa by remaining pragmatic in dealing with local custom. Within that region, Nigeria has developed a version of virtue ethics based on a communitarian notion of ethics which seems to work well for Nigerian businesses. ‘^^

Considering that Nigeria is the most economically successful of the black sub-Saharan economies and is the dominant force in West Africa, this application of communitarianism is having a positive effect on its culturally similar neighbors and holds out hope for a type of regional ethical code in business. The case of Jordan, a relatively poor country located in the Mashriq area of the Middle East, shows mixed results when business ethics are examined. ‘

Similar to other countries in the region, Jordanian businessmen tend to bend their ethical activities toward what is practical under the pressures of reality which makes them not much different than other businessmen throughout the world. However, the active effect of Islamic ethics, as previously noted, has an ameliorating effect on Jordanian business practices.

India presents a more interesting ethical picture. ‘^* While being largely Hindu in religion with significant minority groups, India is a country comprised of people speaking twenty-six different languages within two large ethnic groups. To consider India as a single culture through which one can examine Indian business ethics would be completely misleading.

As a result and considering the existence of “under cultures” throughout the Indian population, international business performed in India would need to carefully examine the various ethical codes in practice throughout the country in order to understand the culture and begin to apply any sort of integrative social ethical theory. Finally, Australia presents another interesting case study. Australia is a large country – approximately the same (13)Advances In Management Vol. 5 (3) Mar.

(2012) size as the forty-eight contiguous states in the United States – but with the total population of not much more than Los Angeles and Orange Counties in California combined. Rich in natural resources but isolated from the rest of the world by geography, Australia finds itself an essentially Asian country but with a European political, social and cultural tradition.

As a result, Australian businessmen have had to learn how to do business with Asian cultures not by choice but of geographic necessity. ^’ Adjustments to doing business in Asian cultures has always been a problem for the Australian businessman, particularly when faced with unfamiliar or uncomfortable ethical situations. ‘^ As a result, Australia can be seen in this sense as a microcosm of what international business people face. Social Accountability International As described above, the applications of ethical codes to international business have been spotty at best.

The reasons for this are varied, but seem to have a great deal to do with attempts to formulate universal ethical principles, albeit with the effort to formulate ISCT in order to accommodate at least some local cultural practices that might affect business ethics. A major reason behind this failure may very well be that the various attempts have all been based on Western philosophical thought. Both Confucian and Islamist traditions possess functioning and effective ethical codes which seem to work well in those cultures.

In 1997, Social Accountability International (SAI) published Social Accountability 8000, a voluntary standard that attempts to ensure humane workplaces worldwide. The standard was revised and updated in 2001. Rather than using the exhortative approach attempted up until that time by the International Labor Organization (ILO), SA8000 is a frank, open attempt to convince companies that it would be in their best business interests to become registered to this standard.

It is based on international workplace norms of ILO conventions, the Universal Declaration of Human Rights and the United Nations Convention on the Rights of the Child (saintl. org). It is an auditable certification standard and those companies which pass an initial audit and which also maintain compliance through successful semi-annual surveillance audits are included in a published list of SA 8000-registered companies. Audits are conducted by thirdparty auditing organizations accredited and overseen by Social Accountability Accreditation Services (SAAS). ^’

Provisions of SAAS a) Child labor: No workers under the age of 15; minimum lowered to 14 for countries operating under the ILO Convention 138 developing-country exception; b) Forced labor: No forced labor, including prison or debt bondage labor; no lodging of deposits or identity papers by employees or outside recruiters;

c) Health and safety: Provide a safe and healthy work environment; take steps to prevent injuries; regular health and safety worker training; system to detect threats to health and safety; access to bathrooms and potable water. d) Freedom of association and right to collective bargaining: Respect the right to form and join trade unions and bargain collectively; where law prohibits these freedoms, facilitate parallel means of association and bargaining; e) Discrimination: No discrimination based on race, caste, origin, religion, disability, gender, sexual orientation, union or political affiliation, or age;

No sexual harassment; f) Discipline: No corporal punishment, mental or physical coercion or verbal abuse; g) Working hours: Comply with the applicable law but in any event, no more than 48 hours per week with at least one day off for every seven day period; voluntary overtime paid as a premium rate and not to exceed 12 hours per week on a regular basis; overtime may be mandatory if part of a collective bargaining agreement; h) Compensation: Wages paid for a standard work, week must meet the legal and industry standards and be sufficient to meet the basic need of workers and their families; no disciplinary reductions;

i) Management systems: Facilities seeking to gain and maintain certification must go beyond simple compliance to integrate the standard into their management systems and practices. ‘” The SA 8000 standard is a rather obvious carrot-andstick approach to flght the more blatant workplace abuses by creating a type of international “honor roll” of companies which have successfully undergone certification. Its introduction was greeted by a mixed reception”’^ amid fears that it was just another expensive piece of bureaucracy. However, within a few years the value of the SA 8000 standard was becoming apparent.

‘” Further, studies have shown that successful implementation of this standard as well as other similar standards have had the effect of improved international business in developing countries. ” The SA 8000 approach admittedly does not address ‘ all ethical concerns inherent in international business but it does address what can be considered the heart of the problem by attempting to bring workplace conditions in line with generally accepted international standards. As discussed, the issues of corruption in the exercise of international business are being addressed in part by the application of cultural

ethical standards, such as Confucian and Islamist practices and the more heinous practices have been so roundly (14)Advances In Management r Vol. 5 (3) Mar. (2012) condemned that they are either fading away or have been made well-publicized examples throughout the world. The hope is if workplace conditions can be brought up to an acceptable level, then the concept of discourse ethics can be put in play under which multinational corporations in partnership with their developing country suppliers can provide a theoretical justification for opening and maintaining a moral discourse which can then establish and mutually maintain ethical principles based on agreement and cooperation. ‘^

This would be a truly revolutionary development and one which would create a wholly new code of international business ethics involving the customer and the supplier as cooperating partners. Conclusion In the wake of Enron, Tyco and other recent scandals which have severely shaken the public’s faith in our business leaders, corporate social responsibility (CSR) has emerged as a serious topic of discussion in the business world. ^°

In addition, the popularity of such recent and graphic films as “Lord of War”, concerning arms dealing in Africa, “Blood Diamond”, also concerning this topic in Africa and “The Constant Gardener”, concerning corruption in the international Pharmaceuticals trade and once again in Africa, has raised the public’s awareness of business corruption in developing countries.

In addition, the rapid movement by Western companies to developing countries as a source of supply based on cheap labor has accentuated the previously “invisible” problem of working conditions in these areas. ^* Recent health threats concerning tainted pet food and leadbased toys from the People’s Republic of China (PRC) have served to magnify the situation.

American consumers, once complacent concerning the products they bought as long as they were cheap and worked, are becoming more concerned with the quality and inherent safety of these products and a connection seems to have been made in the public’s mind with workplace conditions in the countries of origin. The challenge is to keep these issues out in the open until they are resolved. ‘

The success of the SA 8000 standard is a good beginning toward instituting a true international discourse which has the potential of creating a new international business code of ethics which all people can buy into and follow – a code of ethics which was not exported from developed countries, but one that would truly be an international code of ethics developed in partnership between customer and supplier.

Such a mutually developed code of ethics would be-much more easily understood, would stand a much better chance of acceptance because the subjects would also be the formulators and would therefore offer a significantly higher chance of success. References 1. Al-Shaikh F. N. , The practical reality theory and business ethics in non-Westem context: Evidence from Jordan, The Journal of Management Development.

22 (7/8), 679-693 (2003) 2. Beekun R. I. and Badawi J. A. , Balancing ethical responsibility among multiple organizational stakeholders: The Islamic perspective. Journal of Business Ethics. 60 (2), 131-145 (2005) 3. Bendana A. , Shifting Paradigms of thought and power. Development. 47 (1), 22-26 (2004) 4. Beschomer T. and Muller M. , Social standards: Toward an active ethical involvement of businesses in developing countries. Journal of Business Ethics. 73 (1). 11-21 (2007) 5. Bruyn S. T. , The moral economy. Review of Social Economy, 57 (1), 25-46 (1999) 6. Calder T. , Kant and degrees of wrongness.

Journal of Value lnquiry. ,39 (2), 229-244 (2005) 7. Chung K. Y. , Ethical perceptions of business students: Differences between East Asia and the USA among “Confucian” cultures! Journal of Business Ethics. 79 (1/2), 121-133 (2008) 8. Derig Shengliang, A new look at ethics in International business. The International Executive. 34(2), 151-165 (1992) ;l 9. Everett J. , Neu D. and Rahaman A. S. , The global fight against corruption: A Foucaultian, virtues-ethics framing. Journal of Business Ethics. 65 (1), 1-13 (2006) 10. Falkenberg A. W. , When in Rome moral maturity and ethics for international economic organizations.

Journal of Business Ethics. 54 (1), 17-32(2004) 11. Flynn G. , The virtuous manager, A vision for leadership in business. Journal of Business Ethics. 78 (3), 359-372 (2008) 12. Gilbert D. U. and Rasche A. , Discourse ethics and social accountability: The ethics of SA 8000, Business Ethics Quarterh, 17 (2), 187-216(2007) 13. Hartman C. L. and Beck-Dudley C. L. , Marketing strategies and the search for virtue: A case analysis of The Body Shop, International Journal of Business Ethics. 20 (3), 249-263 (1999) 14. Hellston S. and Larbi G. A. , Public good or private good?

The paradox of public and private ethics in the context of developing countries. Public Administration & Development. 26 (2), 135-146 (2006) 15. Hutchings K. and Murray G. , Family, face and favours: Do Australians adjust to accepted business conventions in China? Singapore Management Review. 25 (2), 25-57 (2003) 16. Husted B. W. , A critique of the empirical methods of integratiye social contracts theory. Journal of Business Ethics. 20 (3), 227-236 (1999) 17. Jackson K. T. , Global distributive justice and the corporate duty to aid. Journal of Business Ethics, 12 (7), 547-553 (1993) 18.

Kapstein E.B. , Distributing the gains: Justice and international (15)Advances In Management Vol. 5 (3) Mar. (2012) trade. Journal of International Affairs. 52 (2), 533-566 (1999) 19. Lee M. and Ruhe J. A.. Ethical mindsets of Christianity and Confucianism: A comparative study. International Journal of ValueBased Management, 12(1), 13-28(1999) 20. Leonard D. , Strong foundation solid future. Quality Progress, 41 (3), 30-36 (2008) 21. LeVeness F. P. and Primeaux P. D. , Vicarious ethics: Politics, business and sustainable development. Journal of Business Ethics, 51(2). 185-197(2004) 22. Limbs E. C. and Fort T. L., Nigerian business practices and their interface with virtue ethics. Journal of Business Ethics.

26 (2), 169-180(2000) 23. Magee B. , The story of philosophy. New York, Dorling Kindersley (2001) 24. Malan D. , Corporate citizens, colonialists, tourists or activists? Ethical challenges facing South African corporations in Africa, The Journal of Corporate Citizenship. Summer. 18, 49-61 (2005) 25. Marias J. , History of Philosophy, New York, Dover Publications (1967) 26. Miles M. P. and Munilla L. S. , The potential impact of social accountability certification on marketing: A short note. Journal of Business Ethics.

50 (1). 1-8 (2004) 27. OECD, Bribery: Does the OECD convention work? OECD Observer, 246/247, 20-21 (2005) 28. Olsen W. , Pluralist methodology for development economics: The example of moral economy of Indian labour markets. Journal of Economic Methodology. 14 (1), 57-82 (2007) 29. Pedigo K. and Marshall V.. International ethical dilemmas confronting Australian managers: Implications for the training and development of employees working overseas, Journal of European Industrial Training. 28 (2-4). 183-198 (2004) 30. Rohitratana K. , SA 8000: A tool lo improve quality of life. Managerial Auditing Journal. 17 (1/2).

60-65 (2002) 31. Social Accountability International, Social Accountability 8000, New York (2001) 32. Thaler-Carter R. E. , Social accountability: A social guide for companies or another layer of bureaucracy? HR Magazine. June. 107-112(1999) 33. Thompson Jr. A. A. , Strickland III A. J. and Gamble J. E.. Crafting and executing strategy: Text and readings. New York. McGraw Hill, Irwin (2007) 34.

Van Dijk E.. Ethical relativism: Escaping accountability. Financial Week, July, 35 (2007) 35. Velasques M. G.. Business ethics: Concepts and cases. Upper Saddle River. NJ, Pearson Prentice Hall (2006) 36. Wettstein F., Let’s talk rights: Messages for the just corporation – transforming the economy through the language of rights. Journal of Business Ethics, 78 (1-1), 247-264 (2008) 37.

Wolff J.. An introduction to political philosophy. New York. Oxford University Press (2006) 38. Yew Chan G. K. , The relevance and value of Confucianism in contemporary business ethics. Journal of Business Ethics, 77 (3). 347-361 (2008). (Received 8″^ December 2011, accepted lO”” February 2012) Advances In Management Individual Subscription Fellow Membership Indian Rs. 20,000/- US Dollar 2000 Life Membership Indian Rs. 10,000/- US Dollar 1000 Annual Membership Indian Rs. 3000/- US Dollar 300 Institutional Subscription Fellow Membership Indian Rs. 30,000/- US Dollar 3000 Life Membership Indian Rs. 15,000/- US Dollar 1500 Annual Membership Indian Rs.

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  • University/College:
    University of Chicago

  • Type of paper: Thesis/Dissertation Chapter

  • Words: 389

  • Pages: 2

Business ethics

Business ethics are basic moral principles that guide both people and companies behaviour in business world. Ethics in business are important because it has important implication for company’s function as an organization, ability to manage risk, and company reputation in marketplace. Ethcis become important in make company reputation because market participants are often make ethcial judgement about the company and some will even be rewarded or punished.

If a company run the business with good corporate governance, lawfully, and protecting human right so that company will have at least good reputation among market participants. There are a framework of business ethics that contain four concepts with ethical theory and its associated to the fundamental question that an business actor shoud consider when evaluating a possible course of action :

•Duties. All of business actor is required to be capable of fulfilling their basic duties and the basic moral duty is a requirement to act or not to act in certain ways. They have to understand what their duties are, because the action they do may give rise to critism or blame so that the problem is, “is the action that they do consistent with their basic duties? ” •Rights. A right is an entitlement to certain behaviour from other people so that the actor have to respect others right.

The action must consider the question : “Does it respect the rights and other legitimate claims of the affected parties? ” •Best Practice. Most ethical systems posit certain standards of excellence which is represent conduct that is desirable. The business actor should consider wether the action reflect best practice or not.

•Commitments. Every people or company have to hold on their moral commitment. So the question is: “Is the action compatible with the actor’s own deeply held commitments? ” In applying the framework to evaluate the action, there are challenges at each step in the process. For example : •Understanding proposed course of action, including understand the qoncequences of the action •Identifying relevant standards to apply because ethical standards are orten impicit rather than explicit •Maintaining objectivity to evaluating our judgements.

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  • University/College:
    University of Chicago

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  • Words: 796

  • Pages: 3

Business ethics

1. Discuss why Ethics is important in business? 2. Do you agree with Milton Friedman that the only responsibility of business is to maximize profit? Why or why not? Discuss your answer. 3. What is philosophy? Do you have a personal philosophy in life? If so, what is your personal philosophy? 4. Explain the phrase “ the rules of are non-moral in character but the violations of the rules on etiquette can have moral implications” Cite a concrete example 5. How is Ethics related to Economics? To Education? 6. Answer this Case: ETHICS vs PROFIT.

A large American company participates in a highly competitive industry. To meet the competition and achieve profit goals, the company has chosen the decentralized form of contribution, market penetration, and return on investment. Failure to meet the objectives establish by corporate management for these measures is not accepted and usually results in demotion or dismissal of a centre manager. An anonymous survey of managers in the company revealed that they felt pressured to compromise their personal ethical standards to achieve the corporate objectives.

For example, certain plant locations felt the pressure to reduce quality control to a level that could not ensure that all the unsafe products would be rejected. Also, sales personnel were encourage to use questionable sales tactics to obtain orders, including offering gifts and other incentives to purchase agents. The chief executive officer is distributed by the survey findings. In his opinion, the company cannot condone such behaviour. He concludes that the company should do something about this problem Questions: 1. What are the ethical problems mentioned in this particular case and what are the

probable causes of the problems The ethical problem in this case is that the managers of the company used unethical strategies in reducing the cost of operation and used questionable tactics to obtain sales orders. The probable causes of such ethical issue is that the company have a high standard of goals and objectives to reach that made the managers feel pressured to reach those goals. This leads managers to do unethical strategies like used of questionable tactics to increase their sales and lower quality control of products to reduce cost. 2.

Is it alright to do something illegal or unethical to maintain the company’s image and profitability? On my opinion, using unethical strategies to maintain the company’s image and profitability is not good and could destroy company’s image and profitability in the future. In the present problem unethical strategy may be a good help to the company but it may tarnished the reputation and operation of the company if clients will start to complain about the company’s products as well as the credibility of the company. This may turn to a negative effect to the company’s profit and image.

In the long run, wrong dealings and corruption will tarnish the image of the business and have a negative effect on sales and profit. Business people ought to comply with the law requirements and observe laid down principles of morality in their dealings. They should seriously consider expectations of the community they serve. 3. If you are the CEO of the company, what should you do and why? After reading this case and analysing the issues of the company there are better solution to change the strategies and the ways of the managers.

First, I would look to the statistical data of each managers and the flow of operations they made in their specific area. I would check the past, the present and forecasted sales of each area and analysed the on what area managers have failed to made solution. Second, I would set a meeting with the managers to asked their concerns and issues in reaching the company’s objective and goals if they could comply it ethically. Reaching out about your employees concerns and opinions could be a big help in making solution to problems to prevent unethical issues.

Though the goals and objectives of the company is hard to comply it is best for the managers to be honest and open to its top management because the problem will not be solved if they continue to keep it to themselves. In every problem there is a solution as long as there is harmony and honesty between employees and the management. A problem will always be solved when everyone in the company is helping to solve it. Lastly, I would implied rules regarding unethical strategies in order to protect the company’s image as well as its future operations.

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  • University/College:
    University of California

  • Type of paper: Thesis/Dissertation Chapter

  • Words: 1038

  • Pages: 4

Business ethics

There is no singular definition of knowledge, but for the purpose of this paper; knowledge will be defined as the familiarity with a situation or fact. Ethics, on the other hand, is a set of moral principles that govern a person’s behavior. Simplifying the knowledge issue would be to state that: The familiarity of something (whether a fact or situation) entails compliance with ethical or moral obligations. In disagreement with the previous claim, I believe that the possession of knowledge does carry an ethical responsibility.

In a paper written by Steven Pinker, otherwise known as “The Moral Instinct”, he suggests that morality has a metaphorical switch. Stated as the “moralization switch”, Steven Pinker suggests, “Moralization is a psychological state that can be turned on and off like a switch, and when it is on, a distinctive mind-set commandeers our thinking. ” Much like light switches, moralization switches may be turned on and off.

When the moralization switch is turned off, the reasoning for doing something (moral or amoral) changes, rather than being a matter of virtue, it becomes a matter of practicality or personal reasons. Different people may have their moralization switches turned on or off in the same scenario. An example of this is “loving thy neighbor”. One may express his love for his neighbor because it is in accordance to the Ten Commandments, which he/she truly believes in; while another person may also express love toward his neighbor purely because there is something to gain from it.

Steven Pinker, in his paper, states that morality is under assault. This could be in line with a conclusion formulated by David Couzens Hoy, a renowned professor of philosophy, based on the works of Emmanuel Levina (a French philosopher) who believed that “responsibility precedes any objective searching after the truth”. David Couzens Hoy concluded that there has been an ethical turn. He now defines ethics as “obligations that present themselves as necessarily to be fulfilled but are neither forced on one or are enforceable”.

Despite the fact that ethical obligations are optional, the general population comes to a consensus about moral concepts such as the difference between right and wrong. It was theorized by, anthropologist, Donald E. Brown, in his work “Human Universals” that things such as the concept of distinction between right and wrong have no exceptions in normal human beings. This, along with the concept of fairness, accounts for the decision of most people to maintain a certain ethical standard and responsibility.

The defiance of the ethical code of conduct that is universally accepted would either be recognized by the doer as wrong (and would most likely be punished), or would be a result of a mental disorder (such as psychopathy or moral blindness). This is why a person convicted of murder is given less harsh punishments if known to have a psychological disorder, otherwise known as being mentally unfit. The fact that they have mental disorders means that they are exceptions to this rule of thumb. The moral blindness does not allow for a coherent view with the universal morality that the rest of the world follows.

The reason why the world is in chaos is because showing ethical responsibility is a choice. Harvard Psychologist, Marc Hauser, argues that millions of years of natural selection have molded a universal moral grammar within our brains that enables us to make rapid decisions about ethical dilemmas. There is a universal perception of the difference between right and wrong, but the choice to do either right or wrong is situational. It takes something as simple as personal advancement or an impulse to do something immoral.

This is why the possession of knowledge carries an ethical responsibility. A cliche goes “with knowledge comes power”, which is why knowledge requires ethical responsibility. The same kind of knowledge may be used for great good or bad, and the choice of what to do with it lies in the hands of the one that possesses the information. This shows the possible threat that knowledge has. It could be used to harm humans. The moralization switch could spell the difference between life and death in the hands of the possessor.

Jon Stuart Mill’s Principle of Utilitarianism states the ethical theory that one should maximize the over happiness and satisfaction, and aim for the greatest happiness for the greatest number of people. Exemplifying ethical responsibility, according to this principle, would entail using the familiarity with facts or information for the betterment of the majority. It is possible, however, that personal advancement is genuine happiness, and this could instantaneously shroud one’s moral mentality.

It is only the sense of morality that is universal, not being moral itself. Selfish acts, which are almost always immoral or amoral are means by which people could attain happiness for themselves. This could override the choices that one makes, despite the innate ability to tell between moral and immoral. An example of this is insider trading. In the world of finance, one can win big and lose big. Insider trading is a form of immoral acts that go against ethical responsibility by using knowledge for personal advancement, while simultaneously hurting others.

The end, which is money, would justify the means (which is unfairly using information for the advancement of oneself and the decline of others). Knowledge on matters may have little effects, and global effects. They may severely affect others while greatly benefitting a select few, or cause the happiness of majority of society. The end, or effect, would be a result of one’s choice on what to do with the knowledge that he has. It is therefore crucial for people to be moral. The effect of the exploitation of knowledge is limitless and can work both ways, which is why one must be ethically responsible and just.

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  • University/College:
    University of Arkansas System

  • Type of paper: Thesis/Dissertation Chapter

  • Words: 5652

  • Pages: 23

Business ethics

The quandary people find themselves in when they have to decide if they should act in a way that might help another person or group, and is the “right” thing to do, even though doing so might not be in their own self-interest. A dilemma may also arise when a person has to decide between two different courses of action, knowing that whichever course he or she chooses will result in harm to one person or group even though it may benefit another. The ethical dilemma here is to decide which course of action is the “lesser of two evils.

” Suppose we see a person being mugged in the street. How will we behave? Will we act in some way to help even though you risk being hurt? Will we walk away? Perhaps we might adopt a “middle-of-the-road approach” and not intervene but call the police instead? Does the way we act depend on whether the person being mugged is a fit male, an elderly person, or even a street person? Does it depend on whether there are other people around, so we can tell ourselves, “Oh well, someone else will help or call the police. I don’t need to”?

People often know they are confronting an ethical dilemma when their moral scruples come into play and cause them to hesitate, debate, and reflect upon the “rightness” or “goodness” of a course of action. Moral scruples are thoughts and feelings that tell a person what is right or wrong; they are a part of a person’s ethics. Ethics Ethics are the inner-guiding moral principles, values, and beliefs people use to analyze a situation and decide what is “right. ” At the same time, ethics also indicate what inappropriate behavior is and how a person should behave to avoid doing harm to another person.

Ethics is that study or discipline which concerns itself with judgments of approval and disapproval, judgments as to the rightness or wrongness, goodness or badness, virtue or vice, desirability or wisdom of actions, dispositions, ends, objects, or states of affairs. There are two main directions which this study may take. It may concern itself with a psychological or sociological analysis and explanation of our ethical judgments, showing what our approvals and disapprovals consist in and why we approve or disapprove what we do.

Or it may concern itself with establishing or recommending certain courses of action, ends, or ways of life as to be taken or pursued, either as right or as good or as virtuous or as wise, as over against others which are wrong, bad, vicious, or foolish. The essential problem in dealing with ethical issues, and thus solving moral dilemmas, is that there are no absolute or indisputable rules or principles that can be developed to decide if an action is ethical or unethical.

Put simply, different people or groups may dispute which actions are ethical or unethical depending on their own personal self-interest and specific attitudes, beliefs, and values. Ethical Behavior It is one thing to decide, in theory, that being ethical is good; in practice, it can be much more difficult to make the right decisions. Many people feel the same way about ethics—that somehow, instinctively, they know what is right and wrong. In real life, however, ethical dilemmas are often not black and white, but many shades of gray.

The following ethics checklist will aid to managers in making tough decisions: • What are the facts? • What are the critical issues? • Who are the stakeholders? • What are the alternatives? • What are the ethical implications of each alternative? • Is it legal? • How would it look in the light of day? • What are the consequences? • Does it violate important values? • What kind of world would this be if everyone behaved this way? • Is more than one alternative right? • Which values are in conflict? • Which of these values are most important? • Can you find an alternative that is consistent with your values?

What Are the Facts? Although this question seems obvious, people often forget in the heat of battle to listen to (and, more importantly, to hear) all the different viewpoints. Instead of relying on hearsay and rumor, it is crucial to discover the facts, firsthand, from the people involved. There is always another side to the story. What Are the Critical Issues? In analyzing ethical dilemmas, expand your thinking to include all the important issues. Avoid a narrow focus that encompasses only one or two aspects. Who Are the Stakeholders? Stakeholders are all the people potentially affected by the decision.

That list might include subordinates, bosses, shareholders, suppliers, customers, members of the community in which the business operates, society as a whole, or even more remote stakeholders, such as future generations. The interests of these stakeholders often conflict. Current shareholders may benefit from a company’s decision to manufacture a product that contributes to global warming, while future generations are left to contend with a potential environmental nightmare. What Are the Alternatives? The next step is to list the reasonable alternatives. A creative manager may find a clever solution that is a winner for everyone.

What Are the Ethical Implications of Each Alternative? Is the Alternative Legal? Illegal may not always be synonymous with unethical, but, as a general rule, you need to think long and hard about the ethics of any illegal activities. How Would the Alternative Look in the Light of Day? If your activities were reported on the evening news, how would you feel? Proud? Embarrassed? Horrified? What Are the Consequences of This Alternative? Ask yourself: Am I hurting anyone by this decision? Which alternative will cause the greatest good (or the least harm) to the most people? For example, you would like to fire an incompetent employee.

That decision will clearly have adverse consequences for him. But the other employees in your division will benefit and so will the shareholders of your company. Overall, your decision will cause more good than harm. You should look with a particularly critical eye if an alternative benefits you while harming others. Suppose that you become CEO of a company whose headquarters are located in a distant suburb. You would like to move the headquarters closer to your home to cut your commuting time. Of course, such a decision would be expensive for shareholders and inconvenient for other employees.

Do you simply impose your will on the company or consider the consequences for everyone? Does the Alternative Violate Important Values? In addition to consequences, consider fundamental values. It is possible to commit an act that does not harm anyone else, but is still the wrong thing to do. Some people question whether, as a diverse, heterogeneous society, we have common values. The following values are almost universal: • Compassion means being aware of and concerned about other people’s feelings, desires, and needs. The compassionate person is able to imagine how he would feel in someone else’s place.

• Courage is the strength to act in the face of fear and danger. Courage can require dramatic action (saving a buddy on a battlefield) or quiet strength (doing what you think is right, despite opposition from your boss). • Fairness requires that decisions be made without fraud, prejudice or favoritism. The fair manager treats those he likes at work the same as those who are not his friends. • Integrity means being sincere, honest, and loyal. If you have integrity, you do not criticize others behind their back or take credit for their ideas and efforts. • Responsibility means being trustworthy and dependable.

The responsible person meets her commitments, lives up to her promises and contributes to her community. People can count on her. • Self-control is the ability to resist temptation. The person with self-control does not drink or eat too much, party too hard, watch too much television, or spend too much money. Try compiling your own list of values and then check it periodically to see if you are living up to it in your business and personal life. What Kind of World Would This Be if Everyone Behaved This Way? Is this the kind of world in which you would want to live?

Imagine that you could cheat on an exam without getting caught. You might gain some short-term benefit—a higher grade. But what would happen if everyone cheated? The professor would have to make the exams harder or curve everyone’s grade down. If your school developed a reputation for cheating, you might not be able to find a job after graduation. Cheating works where most people are honest. To take advantage of everyone else’s honesty is contemptible. Is More than One Alternative Right? Often, the most difficult decisions arise not in cases of right versus wrong but in situations of right versus right.

10 President Harry Truman’s decision to drop atomic bombs on two Japanese cities is a classic example of right versus right. He argued that if he had not ended the war by using nuclear weapons, more Americans and Japanese would have died during a land invasion. Looking simply at the consequences, he concluded that the terrible suffering by the Japanese people was justified because, ultimately, fewer people died overall. At the same time, none of us want to live in a world where nuclear weapons are used. Indeed, since the end of World War II, the United States has worked hard to ensure that no one else ever deploys nuclear weapons.

Which Values Are in Conflict? There are many ways to justify a decision to lay off workers, even 40,000 of them. If managers avoid layoffs, then profits suffer, stock prices fall, companies merge, and executives lose their own jobs. Which of These Values Are Most Important? Suppose that, growing up, you had seen family members or neighbors suffering through bouts of unemployment. That experience might have taught you that compassion is a high priority. Managers must determine which values are important in their own lives. Can You Find an Alternative That Is Consistent with Your Values?

The decision you make not only determines the kind of person you are now, but also sets your course for the future. Can you reach a decision that is consistent with the kind of person you are or want to be? Instead of announcing massive layoffs, some companies offer generous severance packages, retraining programs, and other voluntary methods of reducing the workforce. Shareholders may receive less benefit, but employees suffer less harm. Changes in Ethics Change over time: Neither laws nor ethics are fixed principles cast in stone, however. Both change over time.

As a society’s ethical beliefs change, its laws change to reflect them. It was considered both ethical and legal to own slaves in ancient Rome and Greece and in the United States until the nineteenth century. Ethical views regarding whether slavery was morally right subsequently changed, however, and slavery was later outlawed. Confusing behavior: In most societies today behaviors like murder, theft, slavery, and rape are considered unacceptable and prohibited. But many other kinds of behaviors are open to dispute when it comes to whether they are ethical or should be made illegal or not.

Some people might believe that a particular behavior such as smoking tobacco or possessing guns is unethical and should be made illegal. Others might argue that it is up to individual people if they want to own guns or smoke. Vary from country to country: In the United States it is, of course, illegal to possess or use marijuana even though it has been shown to have many medical uses. Some cancer sufferers and AIDS patients find that marijuana relieves many of the side effects of medical treatment, like nausea and lack of appetite.

Yet, in the United States, the Supreme Court has held that the federal government can prohibit doctors from prescribing marijuana to these patients, so their suffering goes on. By contrast in Canada there has been a widespread movement to decriminalize marijuana, and in other countries, marijuana is perfectly legal. Laws can and do change as people’s ethical beliefs change: The point is laws can and do change as people’s ethical beliefs change. For example, in Britain in 1830, there were over 350 different crimes for which a person could be executed, including sheep stealing. Today there are none.

Capital punishment has been abolished. No absolute standards exist to determine how we should behave: No absolute standards exist to determine how we should behave. Consequently, we frequently get caught in moral dilemmas and are continually faced with ethical choices. It is a part of life. Importance of Ethics to Society Does ethical behavior maximize profitability? Some people argue that, in the long run, ethical behavior does indeed pay. But they must mean the very long run, because to date there is little evidence that ethical behavior necessarily pays financially, either in the short or the long run.

Society as a whole benefits from ethical behavior: Ethics and competitiveness are inseparable. We compete as a society. No society anywhere will compete very long or successfully with people stabbing each other in the back; with people trying to steal from each other; with everything requiring notarized confirmation because you can’t trust the other fellow; with every little squabble ending in litigation; and with government writing reams of regulatory legislation, tying business hand and foot to keep it honest.

That is a recipe not only for headaches in running a company; it is a recipe for a nation to become wasteful, inefficient, and noncompetitive. There is no escaping this fact: the greater the measure of mutual trust and confidence in the ethics of a society, the greater its economic strength. Money does not buy happiness: Researchers who study happiness find that people expect material goods to make them happier than they actually do. Sure, you enjoy driving that snappy new car home from the dealership, but afterward your happiness quickly returns to its natural base level.

People find themselves on the so-called “hedonic treadmill”—struggling to buy more and more things so they can get that buyer’s high, only to discover that they can never buy enough to maintain the thrill. Almost no matter how much people earn, they feel they would be happier if their income were just a little bit higher. So what does make people happy in the long run? Good relationships, satisfying work, ties to the community—all available at no additional cost. People feel better when they behave ethically: Profitability is generally not what motivates managers to care about ethics.

Managers want to feel good about themselves and the decisions they have made; they want to sleep at night. Their decisions—to lay off employees, install safety devices in cars, burn a cleaner fuel—affect peoples’ lives. Unethical behavior can be very costly: Unethical behavior is a risky business strategy—it may lead to disaster. An engaged couple made a reservation, and put down a $1,500 deposit, to hold their wedding reception at a New Hampshire restaurant. Tragically, the bride died of asthma four months before the wedding.

Invoking the terms of the contract, the restaurant owner refused to return the couple’s deposit. In a letter to the groom, he admitted, “Morally, I would of course agree that the deposit should be returned. ” When newspapers reported this story, customers deserted the restaurant and it was forced into bankruptcy—over a $1,500 disagreement. Unethical behavior does not always damage a business, but it certainly has the potential of destroying a company overnight. So why take the risk? Even if unethical behavior does not devastate a business, it can cause other, subtler damage.

In one survey, a majority of those questioned said that they had witnessed unethical behavior in their workplace and that this behavior had reduced productivity, job stability, and profits. Unethical behavior in an organization creates a cynical, resentful, and unproductive workforce. Ethical behavior is more likely to pay off: Although there is no guarantee that ethical behavior pays in the short or long run, there is evidence that the ethical company is more likely to win financially. Ethical companies tend to have a better reputation, more creative and cooperative employees and higher returns than those that engage in wrong-doing.

So why bother with ethics? Because when managers behave ethically, society will be benefited. Money does not buy happiness. Because ethical managers have happier, more satisfying lives. Because unethical behavior can destroy a business faster than a snake can bite. And because, in the end, ethical behavior is more likely to pay off. Stakeholders and Business Ethics The people and groups affected by the way a company does business are called its stakeholders. Stakeholders supply a company with its productive resources. As a result, they have a claim on and stake in the company.

Because stakeholders can directly benefit or be harmed by its actions, the business ethics of a company and its managers are important to them. These various stakeholders are shown in Figure Stockholders Stockholders have a claim on a company because when they buy its stock, or shares, they become its owners. This stock grants them the right to receive some of the company’s profits in the form of dividends. And they expect to get these dividends. Stockholders are interested in the way a company operates because they want to maximize their return on their investment.

Thus, they watch the company and its managers closely to ensure they are working diligently to increase the company’s profitability. Stockholders also want to ensure that managers are behaving ethically and not risking investors’ capital by engaging in actions that could hurt the company’s reputation and quickly bankrupt it. Managers Managers are a vital stakeholder group because they are responsible for using a company’s financial capital and human resources to increase its profitability and stock price. Managers have a claim on an organization because they bring to it their skills, expertise, and experience.

They have the right to expect a good return or reward by investing their human capital to improve a company’s performance. Such rewards include good salaries and benefits, the prospect of promotion and a career, and stock options and bonuses tied to the company’s performance. Managers must be motivated and given incentives to work hard in the interests of stockholders. Their behavior must also be scrutinized to ensure they do not behave illegally or unethically and pursue goals that threaten stockholders’ (and employees’) interests. Employees

A company’s employees are the hundreds of thousands of people who work in its various functions, like research, sales, and manufacturing. Employees expect that they will receive rewards consistent with their performance. One principal way a company acts ethically toward employees and meets their expectations is by creating an occupational structure that fairly and equitably rewards them for their contributions. Companies, for example, need to develop recruitment, training, performance appraisal, and reward systems that do not discriminate between employees and that employees believe are fair.

Suppliers and Distributors No company operates alone. Every company relies on a network of other companies that supply it with the inputs it needs to operate. Companies also depend on intermediaries such as wholesalers and retailers to distribute its products to the final customer. Suppliers expect to be paid fairly and promptly for their inputs; distributors expect to receive quality products at agreed-upon prices. Once again, many ethical issues arise in the way companies contract and interact with their suppliers and distributors.

Important issues concerning how and when payments are to be made or product quality specifications are governed by the terms of the legal contracts a company signs with its suppliers and distributors. Many other issues are dependent on business ethics. Customers Customers are often regarded as the most critical stakeholders: If a company cannot persuade them to buy its products, it cannot stay in business. Thus, managers and employees must work to increase efficiency and effectiveness in order to create loyal customers and attract new ones.

They do so by selling customers quality products at a fair price and providing good after-sales service. They can also strive to improve their products over time. Many laws exist that protect customers from companies that attempt to provide dangerous or shoddy products. Laws exist that allow customers to sue a company that produces a bad product, such as a defective tire or vehicle, causing them harm. Other laws force companies to clearly disclose the interest rates they charge on purchases—a cost that customers frequently do not factor into their purchase decisions.

Every year thousands of companies are prosecuted for breaking these laws, so “buyer beware” is an important business rule customers must follow. Community, Society, and Nation Community refers to the physical location in which a company is located, like a city, town, or neighborhood. A community provides a company with the physical and social infrastructure that allows it to do business; its utilities and labor force; the homes in which its managers and employees live; the schools, colleges, and hospitals that service their needs, and so on.

Through the salaries, wages, and taxes it pays, a company contributes to the economy of the town or region in which it operates and often determines whether the community prospers or suffers. Similarly, a company affects the prosperity of a society and a nation and, to the degree that a company is involved in global trade, all of the countries in which it operates. Sources of Business Ethics Primarily ethics in business is affected by three sources – culture, religion and laws of the state. It is for this reason we do not have uniform or completely similar standards across the globe.

These three factors exert influences to varying degrees on humans which ultimately get reflected in the ethics of the organization. Religion It is one of the oldest foundations of ethical standards. Religion wields varying influences across various sects of people. It is believed that ethics is a manifestation of the divine and so it draws a line between the good and the bad in the society. Depending upon the degree of religious influence we have different sects of people; we have sects, those who are referred to as orthodox or fundamentalists and those who are called as moderates.

Needless to mention, religion exerts itself to a greater degree among the orthodox and to lesser extent in case of moderates. Fundamentally however all the religions operate on the principle of reciprocity towards ones fellow beings. Culture Culture is a pattern of behaviors and values that are transferred from one generation to another, those that are considered as ideal or within the acceptable limits. No wonder therefore that it is the culture that predominantly determines what is wrong and what is right. It is the culture that defines certain behavior as acceptable and others as unacceptable.

Human civilization in fact has passed through various cultures, wherein the moral code was redrafted depending upon the epoch that was. What was immoral or unacceptable in certain culture became acceptable later on and vice versa.

During the early years of human development where ones who were the strongest were the ones who survived! Violence, hostility and ferocity were thus the acceptable. Approximately 10,000 year ago when human civilization entered the settlement phase, hard work, patience and peace were seen as virtues and the earlier ones were considered otherwise. These values are still put in practice by the managers of today.

Still further, when human civilization witnessed the industrial revolution, the ethics of agrarian economy was replaced by the law pertaining to technology, property rights etc. Ever since a tussle has ensued between the values of the agrarian and the industrial economy! Law Laws are procedures and code of conduct that are laid down by the legal system of the state.

They are meant to guide human behavior within the social fabric. The major problem with the law is that all the ethical expectations cannot be covered by the law and specially with ever changing outer environment the law keeps on changing but often fails to keep pace.

In business, complying with the rule of law is taken as ethical behavior, but organizations often break laws by evading taxes, compromising on quality, service norms etc. Childhood Upbringing Without really thinking or even being able to avoid it, each person learns ethics from his or her parents—what they teach in words and perhaps more importantly through their actions. These teachings shape our most fundamental attitudes about what is “right” and what is “wrong.

” As a very brief insurance-related example, the child of an insurance agent, upon reaching adulthood, is much more likely to be honest and truthful in settling claims under his or her insurance policies than is the grown child of another insurance agent if the other agent was terminated by the insurer under disputed circumstances. The child may not have understood the intricacies of those circumstances at the time, but as an adult, he or she is likely to believe in their heart that insurers are not to be trusted and do not deserve to be treated honestly.

Later Life Experiences Similarly, a life-shaping event later in life may more directly and consciously shape a person’s ethics. Thus, someone severely injured in an automobile accident may have a much higher opinion of the entire automobile-injury reparations system—including the police who investigated, the hospital that provided care, the lawyers and courts that resolved any legal issues, and the insurers that helped finance so much of the injured person’s recovery—if that person is satisfied with the ultimate medical and financial result months and years after the accident.

If, however, this victim feels the result was medically inferior or legally unfair, the victim may well treat everyone in the system unfairly—even years later in circumstances unrelated to the original accident—just to seek some measure of personal “justice. ” Religious Beliefs Virtually all the world’s religions teach an essentially similar code of ethics that emphasizes honesty, respect for others and their rights, and selflessness. Therefore, in both business and personal situations, a highly religious person is likely to act in ways that most of us will regard as highly ethical.

Their religion will give them highly explicit, generally internally consistent, guides to “good” personal conduct. These guidelines usually can be broadened to apply quite well to business activity. Moreover, those for whom religion is not a central force in their lives are more likely to act in self-centered, ethically questionable ways. Codes of Ethics Perhaps the most direct and explicit sources of our daily ethical guidance are codes of ethics for business conduct.

Whether issued by professional societies (such as the Risk and Insurance Management Society, the Society of Chartered Property and Casualty Underwriters, or the American Society of Safety Engineers), by a business or fraternal society (such as an insurance agents’ association or the Lions or Elks), or by civic groups (such as local or national chambers of commerce), these ethical codes generally have two goals. The first is to set forth objectives like quality output, honesty, and public service in the customer or community dealings by the people who are governed by, or choose to subscribe to, a particular code.

The second typical goal is to protect those to whom the code applies from harmful conduct by others governed by that particular code—conduct such as unfair competition or actions that that cast the entire group in a bad light. This second goal often is expressed through rather specific rules about what those governed by the code definitely must, or must not, do in their dealings with customers, one another, and the public at large. These self-protective rules can sometimes appear to conflict with religious, philosophical, or other sources of ethical guidance.

Discussions with Others Almost daily, quite casually, and sometimes without thinking, virtually all of us talk about others’ and our own actions—offering frequent opinions about whether what they or we have been doing is good, right, and sensible (or perhaps very much the opposite). Buried in this “small talk,” “chit chat,” gossip, and mealtime conversations are implicit—sometimes very explicit—ethical judgments about the behavior being discussed. People and their words and actions are labeled “wonderful,” “mean,” “greedy,” “generous,” or hundreds of other qualities.

Over time, these discussions lead each of us to a sense of what the people around us consider to be good and bad, ethical and unethical, conduct. Unless we have strong personal reasons or other commitments to believe otherwise, most of us tend to “go along” with the opinions of those around us, rather than “bucking the tide” by independently evaluating the ethical aspects of others’ actions. Thus, often almost automatically, the social consensus can become the approved, although unexamined, ethical standard. Ethical Philosophers

In sharp contrast to these ethics of casual social consensus, the philosophers who have developed systems of ethics—such people as Plato, Aristotle, Kant, Bentham, and more recent ethical thinkers throughout the world—have developed basic principles from which they have derived systems of ethics. These principles fall into two general groups: those that are rules-based and those that are results-based. Examples of rule-based ethics appear in the Bible’s Ten Commandments, in many professions’ codes of ethics, and in the Golden Rule: Do unto others as you would have others do unto you.

Results-based systems of ethics emphasize principles such as physicians never knowingly doing or allowing medical harm; doing the greatest good for the greatest number of people (Bentham and other utilitarian), and Kant’s principle of universality—taking an action only if everyone could take the same action without bringing about more harm than good and without creating logical impossibilities (like the logical impossibility of every person being more generous to every other person than anyone is to the first person). Ethical Dilemmas.

A final source of ethical insight (more a way of developing one’s ethical awareness and sensibilities than a separate source of ethical guidance) is pondering ethical dilemmas. These dilemmas are real or imagined situations that pit two or more ethical principles, rules, or objectives against one another. To resolve the dilemma, one has to decide which of these ethically desirable ends is the more/most important or, alternatively, if there is a way to achieve both/all of these ends without committing some other ethical wrong.

For example, if you are an adult and your father, convicted as a murderer, has escaped a federal prison in California to hide in your Missouri house, how do you respond when an FBI agent standing in your yard asks “Is your father in your house now? ” Assuming he is, “Yes” breaks the commandment to honor one’s parents, but “No” breaks the commandment to tell the truth in all morally significant situations.

(When your spouse asks if she/he is especially beautiful/handsome as you are leaving you house to go to a friend’s birthday party, your response probably is not ethically significant for the community, but it may be very significant within your marriage. ) Classification of Ethics Ethics may be divided into four major areas of study 1. Meta-ethics 2. Normative ethics 3. Descriptive ethics 4. Applied ethics Meta-ethics Meta-ethics is a field within ethics that seeks to understand the nature of normative ethics.

The focus of meta-ethics is on how we understand, know about, and what we mean when we talk about what is right and what is wrong. Normative Ethics Normative ethics is the study of ethical action. It is the branch of philosophical ethics that investigates the set of questions that arise when considering how one ought to act, morally speaking. Normative ethics is distinct from meta-ethics because it examines standards for the rightness and wrongnes.

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  • University/College:
    University of California

  • Type of paper: Thesis/Dissertation Chapter

  • Words: 818

  • Pages: 3

Business ethics

Ethics is something that is very important to me. I would like to think that everyone has manners or even common sense when it comes to other peoples’ feelings, or physical pain. But I cannot think like this. If I were to have my own business I would have a code of ethics that would be followed very strictly. I simply will not tolerate any form and unethical behavior in the workplace. The first research situation states: “A researcher studying dorm life on campus discovers that 60 percent of the residents regularly violate restrictions on alcohol consumption.

Publication of the finding would probably create furor in the campus community. Because no extensive analysis of alcohol use is planned, the researcher decides to keep his findings quiet. ” I believe that this researcher did do the right thing. If the researcher would have gone public with this information it could potentially put a lot of the students in danger. The publication of the fact could cause riots, or fights within the campus.

Plus the students did not know that the researcher was gathering information about the alcohol consumption, which would violate one of the six ethical issues. Deception would be considered misleading the students about the nature of the study, meaning the researcher told the students one thing but did not tell them about the research on alcohol consumption. Another thing that the researcher could have possibly caused is physical harm. By keeping the information gathered to him or her, it did not cause uproar in the campus community.

The researcher could have also revealed which groups of people, or even single people, are consuming the alcohol which could lead them to feel depressed, or cause people not to talk to them, and maybe even cause them to transfer to another school. Even though the researcher could have used this information to his or her advantage, this is not what he or she intended to research therefore the information gathered should not be used for anything. In my opinion, this particular researcher has done a great job with their ethical behavior.

According to the six ethical issues the researcher has followed each one to prevent any type of unethical behavior. This procedure is very acceptable, and I do recommend this to anybody who plans on doing any type of research. The second research situation is: “A research questionnaire is circulated among students as part of their university registration packet. Although students are not told they must complete the questionnaire, the hope is that they will believe they must-thus ensuring a higher completion rate. ” I do not agree with this at all.

This is very unprofessional, and the researcher or organization behind this survey will not receive the expected results. First of all you have to tell the students what the survey is about, why it is important that they fill out the survey, how this will benefit the students directly, and that it is not a requirement, but on a volunteer basis so that they do not feel like they are being forced to just simply write something on the survey that may not be entirely true, creating invalid information. At my workplace I sell mobile phones for AT&T.

When a customer comes in to activate a new line of service or upgrades their existing device they are sent a survey on how the experience was in the store. It is my job to explain what the survey is about and why they are receiving this survey. I also have to make sure the customer understands that it is not required of them and if they do not feel comfortable taking it they do not have to participate. The survey is also completely anonymous, unless the customer requests their name to be a part of the survey, again this is optional. Another thing I always do is make sure I tell them how this survey can benefit them.

I tell them it is simply to improve our service through customer feedback. By doing these few extra steps, we have gotten so many more surveys posted than ever before. If a survey is just randomly there, the customer is not going to know what it is for. They aren’t going to realize that by filling this survey out it could very well potentially help them. Odds are that about 90% of people will not take a survey if it is not explained to them. If a researcher wants results, he or she will take the time to do these few extra steps to get the correct information needed for the research.

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  • University/College:
    University of Chicago

  • Type of paper: Thesis/Dissertation Chapter

  • Words: 455

  • Pages: 2

Business ethics

Speaking about ethics and business ethics is necessary to define the meaning of these terms. So ethics is known as branch of moral philosophy, which involves systematizing, defending, and recommending concepts of right and wrong behavior. But business ethics are ethics that refer to the moral rules and regulations governing the business world. In other words, they are the moral values that guide the way corporations or other business make decisions.

Nowadays almost every industry faces a lot of environmental, social and ethical problems. For instance food industries are blamed for obesity. Mobile phone operators are challenged to protect teenagers from online pornography. Record companies are attacked when they sue music-lovers for sharing illegal files on the Internet. As for business in Russia, the most spread ethical problem there is bribery.

The synonyms for the word bribe are many and varied: kickback, graft, subornation, sweetener, baksheesh, gratuity, palm-oil, and backhander. As a rule people give bribe to authorized person in order to make needed things done easily or faster. Another ethical and social issue is treatment of employees. This problem includes sexual harassment and glass ceiling. This is especially spread in small organizations where not so many workers and everyone know almost everything about each other. Another type of treatment of employees is unequal opportunities and gender or race discrimination.

Next ethical problem in business is using of children labor or providing sweatshop conditions in order to reduce costs But of course there are much more ethical problems and this list can be continued endlessly. But fortunately now many companies aim to be ethical and try to solve these problems. Thus one example of such solution concerning treatment of employees is establishing of equal opportunity policy. There can be also created employees complaints procedures and specific policies. Also to ensure that business activity follows ethical norms companies claim that their products are green and environmentally friendly.

What’s more, many companies ask new employees to sign a confidentiality agreement in order to avoid industrial espionage or employing of whistleblower. What concerns the problem of corruption, so this action as a rule is to prosecuted at law, specially if sum of money is really big. In conclusion I would like to say that ethics can not be separated from people and the source of everything bad and good are people either in business world or in our day to day life. So in order to improve situation in business ethics people should to start with themselves, they should to change their lifestyle and way of thinking.

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  • University/College:
    University of Arkansas System

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  • Words: 696

  • Pages: 3

Business ethics

It is a form of applied ethics or professional ethics that examines ethical principles and moral or ethical problems that arise in business environment. It applies to all aspect of business and is relevant to the conduct of individuals and entire organization. Ethics is mainly concerned with what is good versus bad, what is right versus wrong. Deontology is an ethical theory that holds that actions are right or wrong independent of their consequences. Utilitarianism is an ethical theory that holds that actions are right if they produce the greatest amount of good for the greatest number of people.

Corporate social responsibility is the obligation towards the society assumed by business. The business maximizes its positive effects on society and minimizes and its negative effects. An illustration of of an ethical and social responsibility issue related to the textile manufacturing business. In today’s global business where large multinational corporations like the textile industry face charges of violating human rights in third world countries. Using child labor questions the human rights, ethics and social responsibility of the textile manufacturing industry.

An analysis of how the textile manufacturing illustration applies to decision making and operations in an ethical and social responsible business. The economic responsibilities of business would produce products that society wants at a price that perpetuates the textile business. The textile manufacturing business decides on legal responsibilities where the obey local state federal and global laws. The textile manufacturing business makes decision based on their ethical responsibilities of meeting other societal expectation written or not written by law.

Ethical obligations are a set of “ought to” standards that define a moral course of action and draw a line between right and wrong. Although ethical obligations in business share similarities with legal rules and regulations in determining how a business conduct itself while striving to make profit and achieve strategic company goals. Ethical obligations are really more about discretionary decisions value guided behavior. For example respecting the religious sentiments and dignity of people while advertising for a product.

Legal obligations every business has a responsibility to operate within the laws of the land. Since these laws are meant for the good of the society, a law abiding enterprise is a socially responsible enterprise as well Scope and objectives The scope of ethics indicates its subject matter. Ethics as normative science deals with moral ideal or the good in order to enquire the nature of our conduct. It enquires into the nature of the springs of action, motives, intentions, and voluntary actions and so on. It determines rightness or wrongness of human action.

As a science of morality ethics discusses the contents of moral consciousness and the various problems of moral consciousness. Ethics is concerned with the highest good or absolute good. It investigates the nature of its fundamental notions that is right, duty and good. It includes whatever has reference to free human acts, weather as principle or cause of action or as effect or circumstance of action (merit, punishment etc. ) Ethics discuss the nature of human freedom . ethics investigates what constitutes good or bad, just or unjust. It also enquires into what is virtue, law, conscience and duty?

What obligations are common to all? What is good in all good acts? These questions lie within the scope of ethics. Objectives: Some of the most common ethical obligations in business relate to recruiting and hiring staff, maintaining safe and healthy work environment use business resources wisely and avoiding situations that have the potential to create a conflict of interest, such as accepting gifts from suppliers or making a hiring decisions not because the applicant has the best qualifications but because the applicant is a relative of the business owner.

It also includes considering how and where suppliers get their products and weather to sell the products that are detrimental to the health of customers such as cigarettes and fatty foods.

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  • University/College:
    University of Chicago

  • Type of paper: Thesis/Dissertation Chapter

  • Words: 2670

  • Pages: 11

Business ethics

In one of two dilemmas Mr. Owen is facing, he decided not to inform the guests about the construction. In narrow view, he is responsible for profit maximization for his shareholders. Even though he was not honest to his guests, his action is considered as morally right since different situation makes different choice according to Ross. In egoism view of consequentialist theory, Mr. Owen promoted long-term interest to himself and stakeholders. Giving a note of apology and offering $100 dining credit are considered as the duties of reparation from Ross’ seven Prima Facie obligations.

The action the writer took of ‘inform the guests’ in broad view of corporate responsibility respects the stakeholders. It shows honesty which is considered as ethical in virtue theory, and theories of Kant and Ross. From Ross’ theory, the loyalty is also mentioned in duties of fidelity from 7 prima facie obligations. In long-term view, the shareholders will be satisfied with increasing profit. In utilitarianism of consequentialist view, more people are considered to be happy.

The proactive action of providing accurate information on advertisement lets the hotel be an ethically good business based on Solomon’s 3’C’s of business ethics. 1. The first dilemma Mr. Owen is facing is about ‘to inform’, ‘not to inform’ the guests in advance about the roof construction or ‘cancel the summer season’. If Mr. Owen decides to inform the construction to the guests or cancel the summer season, the guests will be happy about his honesty to them and loyalty about the hotel advertisements which stated ‘a peaceful and quiet location on the beach’.

On the other hand, shareholders will not be happy about his action, since their profit might not be maximized. Many guests probably will cancel their reservations and decide not to come to the hotel, and the revenue of the hotel in the summer season will be dropped. Not only the shareholders, employees, retailers and local community will also not happy with his action since they might lose the opportunities to earn money in the summer season. In that case, Mr. Owen will not take any social responsibility about his stakeholders.

However, if he decides not to inform the guests about the construction, by contrast, shareholders will be happy about his action since he took the responsibility of profit maximization, while customers will be unhappy with his morally wrong action which lack of honesty and loyalty. The second dilemma is between ‘to listen to the Housekeeping Director’ and ‘postpone the construction’. The Housekeeping Director (Mrs. Smithson) would be happy with Mr. Owen’s action if he respected her opinion and showed any proper reaction about it immediately. However, guests and shareholders will be happy with his action if Mr.

Owen considered postponing the construction until after the busy summer season since he did not want to disturb the guests and give their right to be respected, and take responsibility of profit maximization for his shareholders. 2. Mr. Owen’s action is considered as an ethical manner based on narrow view of corporate responsibility, consequentialist and non-consequentialist theories. Since managers are employed by shareholders as a result of the separation of ownership and manage, therefore the duty of the manager is set by shareholders, and this will be maximizing profit for shareholders within legal limits.

, which is called ‘Narrow View’ of corporate responsibility, provided by Milton Friedman. In ‘Narrow View’, Mr. Owen has the responsibility for its shareholder. By deciding not to inform the guests in advance about the construction, he can to avoid the negative result that the revenue of the hotel would be decreased from cancellations of reservations after the guests know about the construction. (Friedman 1970) (Friedman 1962) The shareholder value maximization is sometimes in conflict with prima facie duties.

Even though his action can be considered as dishonesty because he did not let the guests know about the construction, according to perspective of W. D. Ross who provided seven prima facie obligations, his dishonesty can be broken in different situation, for different reason. For Mr. Owen, it is the purpose and responsible to consider his shareholders and their interest in ethical decision making. To satisfy his shareholders, he had to be dishonest to his guests. (Alpaslan 2009) (Ross 1988) (Shaw, Barry, & Sansbury 2009, p.79)

In egoism view from consequentialist view, Mr. Owen’s action is morally right since he promotes long-term interests. From deciding not to inform the guests about the construction, he can bring more long-term benefits. Nowadays, there are many CEOs who have been successful businesses for a long time, consistently applied the principle of self-interest and the principles of egoism. The hotel will be still operated as usual, and not only his shareholders but his employees, retailers and other businesses in its local community will also get benefit from his action.

Organizations have ethical obligations to their employees, which includes the right not to be fired without just cause, the right to due process and fair treatment etc. Even though there would be many reasons for downsizings or layoffs. In Mr. Owen’s case, he has to downsize number of employees depends on the business forecasting in the summer season. If the forecasted occupancy is very low, the hotel will need fewer employees to work. In egoism view, it can be a reason for him not to inform the guests about the construction because he wants those experienced employees to stay with him, and does not want to fire them.

(Woiceshyn 2011) (Shaw, Barry, & Sansbury 2009, p. 59) (Carroll & Buchholtzl 2008) As the business of hotel will also influence on it retailers since the hotel will order the amenities and ingredients depends on its occupancy. The guests will still spend money in other business around the hotel and economic situation of its local community will be increased. For Mr. Owen, in egoism view, it was one of his long-term benefits to let his hotel still be operated to generate revenue, and in consequentialist view, his employees, retailers and local community of the hotel will be able to keep earning money.

Therefore, in long-term, Mr. Owen can take the responsibility of profit maximization for his shareholder, he is also mindful of obligations to other corporate stakeholders such as employees, retailers, and local community. (Audi 2009) From his decision to give the guests a note upon their arrivals to inform them about the construction, and to offer $100 dining credit in the hotel’s restaurant to apologize for inconvenience, his action can be considered as morally right in non-consequentialist view. Mr.

Owen was afraid of guests’ complaints from construction. Since compensation is required when the opportunity to complain or a simple apology is not enough, he decided to use a note and dining voucher. However these are not only for the way to prevent possible guests’ complaints but also the way for reparation for the previous wrongful action. According to seven prima facie obligations of Ross, his action to give the note for apology and $100 dining voucher is considered as duties of reparation for his previous wrongful actions.

He was trying to compensate guests’ inconvenience to the guests. Even though his other actions were considered as ethically right only in consequentialist view only, by giving note for apology and offering dining voucher, he tried to take an obligation on the process not only on the outcome or the result, and responsible for his previous wrongful actions. (Cranage & Mattila 2005) (Ross 1988) 3. Even though the action of Mr. Owen was also in an ethical manner as mentioned above, the writer will inform the guests about the construct in advance.

And this action is also in an ethical manner based on broad view of corporate responsibility, consequentialist and non-consequentialist theories, and Solomon’s hybrid theory. Corporate social responsibility which refers to actions taken by firms with respect to their stakeholders including employees, local communities, and shareholders is now one of the most significant corporate trends. In broad view of corporate responsibility, it is said that as a part of society, responsible corporate has a duty to care about justice and stakeholder rights.

Based on these considerations, the writer will give the guests the rights to know about the truth and fact about the construction, and from doing that customers will be happy to see the loyalty to them and to the advertisement said ‘a peaceful and quiet location on the beach’. This action is considered as moral manner according to Immanuel Kant who provided a non-consequentialist approach to ethics, telling the truth is an absolute obligation to people. Honesty was also mentioned in ‘virtue ethics’ which defined those aspects of human beings that are generally considered morally right or wrong.

The Duties of fidelity which is one of seven prima facie obligations of principles in morality of W. D. Ross is also supports this action as an ethical manner, since it prevents the duties of fidelity to be broken. (McWilliams, Siegel & Wright 2006) (Trevino & Nelson 2007, p. 33) (Kant 1996) (Shaw, Barry, & Sansbury 2009, p. 88) Nowadays, it is pretty obvious that corporate reputation is doing a significant role of one of contributions to long-term competitive advantages of organization. From the customers’ point of view, corporate social responsibility has positive influences on customer satisfaction and loyalty.

And now customers care much about organizations operated ethically. In the Beach View Hotel’s case, customers will be more interested in the Hotel and more likely to spend their money in it after they are informed about the construction in advance which is in moral manner. And the reputation of the hotel will be naturally increased by those guests and their positive impression on the Beach View Hotel. From the shareholders’ point of view, reputation can stand for a valuable asset it is often defined as a valuable, unestimatable and intangible resource which may provide the organization competitive advantage.

Shareholders generally recognize the positive influence of reputation on possibility to gain profitable return. In consequentialist view, in long-tem, the shareholders of the hotel will be also happy with the action since this action can satisfy them by increasing profit of the hotel. More people will be satisfied with the action of ‘inform’, than the action of ‘not inform’. Based on the utilitarianism of consequentialist theory, which says that the greater amount of happiness can be the standard to determine whether an action is right or wrong, the action of ‘inform’ can be considered as morally right.

(Helm 2007) (Sarstedt & Ringle 2010) (Barney 1991) (Hall 1993) (An introduction to business ethics 2007) (Flatt & Kowalczyk 2011) (Vitezic, 2011) Since advertising can betray its role as a source of information by misrepresentation and by withholding relevant facts, the writer will take proactive action by adding an explanation about the construction till the construction is finished so that not only the guests with reservations, but possible guests can also be informed about the construction when they are considering the hotel as their summer vacation destinations.

By doing this, the guest are respected by the hotel, and given the guests the right to know about the facts. There are many lawsuit cases of big brand organizations such as Listerine and Philadelphia Cream Cheese for misleading advertising by giving wrong information on their advertisements. In Australia, ACCC is in charge of ensuring consumers are given accurate information about the products. By making correction on the advertisement, the hotel will avoid the lawsuit. According to the Solomon’s 3‘C’s of business ethics which are values of business ethics, the hotel can be considered as a morally good business.

Making correction on the advertisement lets the hotel not to break the advertisement law and regulations which can be applied with Compliance of Solomon’s 3’C’s. The second C, Contributions can also be applied. The hotel will be an example to other organizations and let them learn about ethically proactive action from the hotel, and it will make contribution to its society. Bing an example of morally right hotel in the industry, the employees will be proud of the hotel and customer reputation will get higher, and it is considered as the Consequences of 3’C’s.

(Shaw, Barry, & Sansbury 2009, p. 40) (Devi, Kanchana & Sebastina 2010) (An introduction to business ethics 2007) (Shaw, Barry, & Sansbury 2009, p. 305) Reference Friedman, M. 1970 ‘The Social Responsibility of Business Is to Increase Profits’, New York Times Magazine I3:32. Friedman, M. 1962 Capitalism and Freedom, University of Chicago Press, Chicago USA Alpaslan, C. M. 2009 ‘Ethical Management of Crises: Shareholder Value Maximisation or Stakeholder Loss Minimisation? ’ Journal of Corporate Citizenship, Vol. 36, p. 41-50, viewed on 28 May, 2012, Business Source Premier.

Ross, W. D. 1988 The Right and the Good, Hackett Publishing Company Shaw, W. H. , Barry, V. & Sansbury, G. 2009 Moral Issues In Business, Cengage Learning, Melbourne Victoria. Woiceshyn, J. 2011 ‘A Model for Ethical Decision Making in Business: Reasoning, Intuition, and Rational Moral Principles’ Journal of Business Ethics, Vol. 104, Issue 3, p. 311-323, viewed 29 May, 2012, Business Source Complete Carroll, A. B. & Buchholtzl, A. K. 2008 Business and society: Ethics and Stakeholder Management,South-Western Cengage Learning, OH USA Audi, R.

2009 ‘Objectivity Without Egoism: Toward Balance in Business Ethics’ Academy of Management Learning & Education, Vol. 8, Issue 2, p. 263-274, viewed 29 May, 2012, Business Source Premier Cranage, D. A. & Mattila, A. S. 2005 ‘Service Recovery and Pre-Emptive Strategies for Service Failure: Both Lead to Customer Satisfaction and Loyalty, But for Different Reasons’ Journal of Hospitality & Leisure Marketing, Vol. 13, Issue 3/4, p. 161-181, viewed 29 May, 2012, Hospitality & Tourism Complete McWilliams, A. , Siegel, D. S. & Wright, P.

M. 2006 ‘Corporate Social Responsibility: International Perspectives’ Journal of Business Strategies, Vol. 23, Issues 1, p. 1-12, viewed 30 May, 2012, Business Source Premier Trevino, L. K. & Nelson, K. A. 2007 Managing Business Ethics, Wiley, New Jersey USA Kant, I. 1996 Practical Philosophy, Cambridge University Press, UK Helm, S. 2007, ‘One reputation or many? Comparing stakeholders’ perception of corporate reputation’ Corporate Communications: An International Journal 12(3), pp. 238-254, viewed on 29 May, 2012 Sarstedt, M.

& Ringle, C. M. 2010, ‘Treating unobserved heterogeneity in PLS path modeling: a comparison of FIMIX-PLS with different data analysis strategies’ Journal of Applied Statistics, Vol. 37, Issue 8, p. 1299-1318, viewed 29 May, 2012, Business Source Complete Barney, J. B. 1991, ‘Firm resources and sustainable competitive advantage’ Journal of Management, Vol. 17, pp. 99-120, viewed 30 May, 2012 Hall, R. 1993, ‘A framework linking intangible resources and capabilities to sustainable competitive advantage’ Strategic Management Journal, Vol.

14, Issue 8, pp. 607-618, viewed 30 May, 2012, Business Source Complete Flatt, S. J. & Kowalczyk, S. J. 2011, ‘Corporate Reputation Persistence and Its Diminishing Returns’ International Journal of Business & Social Science, Vol. 2, Issue 19, p. 1-10, viewed 30 May, 2012, Business Source Complete Vitezic, N. 2011, ‘Corporate Reputation And Social Responsibility: An Analysis Of Large Companies In Croatia’ International Business & Economics Research Journal, Vol. 10, Issue 8, p.

85-95, viewed 29 May, 2012, Business Source Complete Devi, N. Y. , Kanchana, V. S. & Sebastina, N. 2010, ‘Consumers Demand Ethics in Advertisement’ SCMS Journal of Indian Management, Vol. 7, Issue 3, p. 50-67, viewed 30 May, 2012, Business Source Complete An introduction to business ethics 2007, video recording, Training Point. Net, Albert Park, Vic. , Ash, Eve and Quarry, Peter Algar, K. 2010, ‘Misleading Bing Lee advertising slammed by ACCC’ Appliance Retailer, Vol. 16, Issue 10, p. 18-18, viewed 30 May, 2012.

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  • University/College:
    University of Arkansas System

  • Type of paper: Thesis/Dissertation Chapter

  • Words: 1932

  • Pages: 8

Business ethics

This report is about the ethical approaches and practices are adopted by the business firm. It is very beneficial for the company, because it is increase the goodwill and improves the efficacy of the workers. The main aims of adopting the ethical activities to enhance or promote the goodwill of their business.

In this report we will discuss the different ethical approaches and ethics activities are adopted the mostly public firms and many small scale business have embraced ethics as a guide to their operations. Employee empowerment helps to create innovation, and employee have a stake with the company and providing the more beneficial ideas and problem solving solution when the obstacles are arises.

The main objective of policy is not to be build or create but convince the employee that is better and it is a better way for or solution the problems. Different approaches which are most ethical path and realize to evaluate the different situation in using the different criteria. Constant learn about ethics and apply to real world business decisions 2 | P A G E Introduction Ethical activities and practices that are adopting by the companies and it are mandatory by the government to follow these.

The ethics activities are adopted the mostly public firms and many small scale business have embraced ethics as a guide to their operations. The main aims of adopting the ethical activities to enhance or promote the goodwill of their business. By the continuous involvement of employee in decision, it has become a less resistance of implementing the new technology or strategy. It is the management tact’s how people are enabling to involve to continuous improvement and ongoing success of their work organization.

Employee empowerment helps to create innovation, and employee have a stake with the company and providing the more beneficial ideas and problem solving solution when the obstacles are arises. Team work is a very key part of employee empowerment process. A manufacturing business have a many small and large scale operational units worldwide and they are required the wide range of workers. When they come into one place for work there are too many issues are created, one thing is better for some people and it is totally against the ethical approach for the others.

Act of 2002 requires that the companies are creates the code of ethics and explain why they are not uses it. There are too many ways to adopt the ethical codes or approaches in their operational activities, if they are fully adopt the ethical practices in business. 3 | P A G E 3-1 Assess the role of the company acting as moral agent Ethics become the most important subject in the business world. The ethics activities are adopted the mostly public firms and many small scale business have embraced ethics as a guide to their operations.

The main aims of adopting the ethical activities to enhance or promote the goodwill of their business. In this era many companies of the world are practicing the ethical operation in their business places. We select the Tesco retailer firm, he act like a moral agent. Tesco was founded by the Jack Cohen in 1919 as a group of market stalls. The officially first Tesco store opened in 1929 in Burnt Oak, Barnet. The company success is depending on how efficiency it is providing the requirement of the customers.

He is focus to maintain the long run relation to and bring the ethical measures of activities. Following are the ethical activates are strictly adopting by the Tesco company. ?Providing the job security to employees ?Fulfill the government rules and regulation ?

Improving the quality of product ?Accomplish customer’s equipment ?Maintain CSR department for company and whole ?Providing the large verities of goods at low prices ?Quality of goods is their main objective and profit is last 3-2 Analyze the development of mechanisms for achieving employee involvement and empowerment Employee involvement is creating the better environment in which people have a bearing on decision and action that affect their jobs. Employee involvement in

organizational decision making process, it is goal or objective, it will be enhance the efficiency of the company. By the continuous involvement of employee in decision, it has become a less resistance of implementing the new technology or strategy. It is the management tact’s how people are enabling to involve to continuous improvement and 4 | P A G E ongoing success of their work organization. Tesco organization has involved their workers in decision making process and getting the feedback for thing improvement.

The term employee empowerment has been around in 1980’s, but in currently it has been grown too much and is implemented in the public and private sectors. Employee empower playing a very important role in the modern functional business. The employee’s participation and involvement affect the both employee and organization positively and negatively. According Ackers, Wilkinson & Dundon employee participation is a process in which decision in the organization are sharing with the individual who are unequal in hierarchy. This is improved decision making process, increase efficiency and effective of the workers, reduce stress and ensure the better time resources.

Employee empowerment helps to create innovation, and employee have a stake with the company and providing the more beneficial ideas and problem solving solution when the obstacles are arises. Team work is a very key part of employee empowerment process. Employee empowerment often calls the restructuring the organization and reduces hierarchy level or to provide more customer and process focused organization. In employee empowerment process is to giving or increasing the job enlargement and job enrichment of the employee to increase their efficiency and motivational level.

5 | P A G E 4-1 Research a current ethical issue affecting a selected business Increasing the globalization, cross-cultural exchange has thrived and business is spreading overseas than ever before. With meeting the new nations and people, a lot of new cases or problems are rises. By diversifying the business with new places and market than many new ethical issues are affected the business operation. A manufacturing business have a many small and large scale operational units worldwide and they are required the wide range of workers.

Having the variety of people of by different in color, race, genders and nation. When they come into one place for work there are too many issues are created, one thing is better for some people and it is totally against the ethical approach for the others. It is creating the difficulties for directors and managers for making the short or long term decision making process. In our selected organization Tesco have faces the many issues in operations, its strategies are very according to the area and nation. Some basically strategies is fitted in United Kingdom but it is not fruitful in Asian countries.

There are numerous ethical issues faced in our today world and have not straight solutions. It is very difficult for the company to choose the best ethical approach which is morally right and which is wrong. 4-2 Report on how the business could improve the ethics of their operations whilst meeting objectives and ensuring good employer / employee relationship Ethics govern how the business firm is using the ethical approaches.

Ethics of business defines the values of the business in which they believe and the employee of that organization is measures what is right and wrong, when it comes to conducting the business. It is how business operates in grey area and makes the ethics in today’s business workplace. By making the good ethical policy for the business and it is the responsibility of the employer to adopt or implement policies that are according with the ethical approaches. 6 | P A G E The main objective of policy is not to be build or create but convince the employee that is better and it is a better way for or solution the problems.

The employer are setup the training session for their employees and the main goal is to deliver them ethical policy of the company and what is expected to them regard to business ethics. By implementing the new ethical policy and implement it in the operational or functional activities of business, employees are more satisfied and they know rule and policies. It is not enough to make an ethical policy and thick about ethics, but should be adopt the ethical practices in the decision making process. Create the different approaches which are most ethical path and realize to evaluate the different situation in using the different criteria. Constant learn about ethics and apply to real world business decisions.

4-3 Design a suitable ethical code Business and professional organization espouse the code of ethics to help workers in their decision making process. If the company has made the new ethical codes and approaches to accept new kinds of behavior improve the efficiency of job, create the set of benchmark and strengthen the profession’s identity. Some business use the term interchangeably and the code of ethics is often differently from the code of conducts. The code of ethics is giving the way of doing business operationally and code of conduct is a way of behavior and measure the specific behavior.

The Sarbanes-Oxley Act of 2002 requires that the companies are creates the code of ethics and explain why they are not uses it. There are too many ways to adopt the ethical codes or approaches in their operational activities, if they are fully adopt the ethical practices in business. It will increase the company goodwill and increase the efficiency of the employees. By increasing the number of customer and making good image in market company should be followed the ethical codes. In the oil industry shell ensure that he will accept the code of ethics and make the law about health and safety, which is should be included the operational activities in the safe environment.

Without impacting any harm to all the natural resources along with adjacent people (Boulstridge and Carrigan 2000). 7 | P A G E Conclusion At the end of this report I am able to make the justifiable ethical approaches for the company. This report is about the ethical practices that the company is adopted and uses ethical code of conduct. For improving the company efficiency and goodwill of the business, many businesses are following the ethical practices in their operational activities.

We create the plan of employee involvement in organizational decision making process, it is goal or objective, it will be enhancing the efficiency of the company. Ethics govern how the business firm is using the ethical approaches. Ethics of business defines the values of the business in which they believe and the employee of that organization is measures what is right and wrong, when it comes to conducting the business. 8 | P A G E References http://asq. org/learn-about-quality/employee-involvement/overview/overview. html http://smallbusiness. chron. com/benefits-practicing-employee-involvement- empowerment-1842. html file:///C:/Users/WaQAs/Downloads/ejbrm-volume5-issue1-article168. pdf.

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  • University/College:
    University of Arkansas System

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  • Words: 520

  • Pages: 2

Business ethics

Introduction
Ethics means different things to different people, but basically it is all about being wrong and right. In business making ethical decisions should always be considered first, as well as the law. Culture is important within any company. It involves your perception of attitudes, values, and standards of conduct within a business. Ethical situations arise every day in business. Enron was a company that not only suffered from a lack of an ethical climate, but lacked ethical managers as well. In a business ethics in the workplace is important because it creates a secure work environment.

Ethics are followed in everyday life situations outside of work so it is normal to conduct rules within the workplace too. Enron suffered numerous of ways from the lack of being ethical in a business. Being ethical not only helps the business aspect, but your image as a whole. Many would ask is it possible to run a business without being ethical, but Enron shows a perfect example of how it all will all come crashing down if proper ethics is not used. Topic 1.

A description of a business situation that presents a legal and ethical issue. -Enron Company ethical meltdown came from financial accounting abuse by their executives and auditors. They were being unethical by hiding profitable information on paper and actually they were losing money. By being unethical as management employees saw firsthand what their leaders were doing. Managers are suppose to lead by example and if employee know or see them doing wrong than they believe it is ok to be unethical. Topic 2

A description of at least two ethical theories under which the situation will be analyzed. -Integrity was not a trait frequently used by many of the executive leaders within the culture at Enron. This lack of integrity was a serious problem within the organizational structure and culture. None of the Enron associates were honest and eventually their attitudes and cultural values were a heavy influence on their culture.

Topic 3
An explanation of the specific areas of law under which the situation will be analyzed. -The Sarbanes-Oxley Act is one act that was created due to the Enron situation. The act came about and brought many changes to the financial aspect of the business world. -Crimes were violated within the Securities and Exchange Commission. Many employees committed financial fraud and money laundering.

References

Free, C., Macintosh, N., and M. Stein. (2007). Management controls: the organizational fraud triangle of leadership, culture, and control in Enron. Gini, Al, (2004) Business, ethics, and leadership in a post Enron era. Journal of Leadership and Organizational Studies. Retrieved November 25, 2013 from http://find.galegroup.com/itx Leeds, R. (2003). Breach of trust: leadership in a market economy. Harvard International Review.

Mekay, E. (2003). Enron used U.s government to bully developing nations. Inter Press Service. Retrieved on November 25, 2013 from http://www.indiaresource.org/news/2003.

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  • University/College:
    University of Chicago

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Business ethics

Introduction EDM *** For the purpose of this research, we will look at the factors which influence an individual to engage in unethical behaviour, which is defined as any organizational member action that violates widely accepted societal and moral norms (Rest, 1986).

It may be useful to note that unethical behaviour does not equate to workplace deviance or counterproductive work behaviour (violating organizational norms) These factors can be split into three categories, individual characteristics (cognitive moral development, locus of control, Machiavellianism, moral philosophy, demographics), moral issue characteristics such as moral intensity (T. M. Jones, 1991), and organizational environment characteristics (ethical climate, ethical culture, codes of conduct). Personal Characteristics Cognitive moral development.

The theory of cognitive moral development (CMD) states that there are different levels of reasoning that a person may apply to ethical issues. The individual at level one is concerned with their self-interest and external rewards and punishments. At level two, the individual does what others expect of them. The individual at level three possesses more autonomous decision-making skills based on principles of rights and justice rather than external influences (Kolberg, 1969). According to empirical research by Kolberg, most people operate at level two thinking.

This is supported by Trevino and Nelson (2007), who say that most individuals are not autonomous and do not constantly follow an internal moral compass when it comes to decision making. A study by Weber (1990) also placed most business managers at level two. Rest (1986), who proposed the 4-stage ethical decision making process, places vast importance on CMD theory. This implies that while the level of reasoning an individual carries is a determinant of his actions, the situational context also does influence the actions of that individual.

Taking CMD theory into consideration, it can be said that the actions of an individual is both a consequence of personal and organizational characteristics. National and cultural characteristics According to Crane and Matten (2007), research has shown that nationality and cultural background can have a significant influence on an individual’s ethical beliefs. Of the more than 30 empirical cross-cultural studies on ethical attitudes and ethical behavior conducted, practically all of them recognize the influence of national culture on one’s ethical attitude and behaviour.

In support of this view is a study by Christie et al. (2003) using primary data collected from 345 business manager participating in executive MBA programs in selected schools across India, Korea and the United States looked at the relation between Hofstede’s four cultural dimensions and the attitude of individuals toward business ethics in general and toward twelve common questionable practices in particular. It concluded that there existed strong relationship between cultural dimensions of individualism and power distance and ethical attitudes of business managers toward certain questionable business practices.

The analysis of the relationship between ethical attitudes of business managers toward questionable business practices and cultural dimensions of masculinity, uncertainty avoidance, and long-term orientation produced mixed results, probably due to the effect of external variables and the insiginificant differences in cultural dimension scores among the countries surveyed. Although it is difficult to hypothesize, it is unquestionable that culture has an impact on ethical attitudes and behaviour. Organisational Characteristics Rewards.

According to Trevino and Nelson (2007), a reward system is crucial to the alignment of ethical culture because people pay attention to what is measured, rewarded and disciplined. It is in human nature to do or repeat what is rewarded. The opposite is true; people will avoid what is punished. Jackall (1988) states that what is viewed as acceptable in a workplace is often what is rewarded. Crane’s research (2001) also showed that managers could avoid the moral aspect of issues and problems due to lack of progression and fears of marginalization.

While generally positive, rewards can lead to unethical behaviour too Code of ethics enforcement Others – Moral Intensity What would promote ethical behaviour – link to above References * Kohlberg, L. (1969). Stage and sequence: The cognitive– developmental approach to socialization. In D. A. Goslin (Ed. ), Handbook of socialization theory and research. Chicago, IL: Rand McNally. * Rest, J. (1986). Development in judging moral issues. Minneapolis, MN: University of Minnesota Press. * Trevino, L. K. , & Nelson, K. A. (2007). Managing business ethics: Straight talk about how to do it right.

New York, NY: Wiley. * Jones, T. M. (1991). Ethical decision making by individuals in organizations: An issue-contingent model. Academy of Management Review, 16, 366–395. * Weber, J. (1990). Managers’ moral reasoning: Assessing their responses to three moral dilemmas. Human Relations, 43, 687–702. * Crane, A. , & Matten, D. (2007), Making Decisions in Business Ethics Descriptive Ethical Theories (Chapter 4) in ‘Making decisions in business ethics’ in Business ethics : managing corporate citizenship and sustainability in the age of globalization, 2nd ed., Oxford University Press, Oxford ;

New York, pp. 127-167. * Hofstede, G. H. (1980), Culture Consequences: International Differences in Work-related Values, Sage Publications, London. * Christie, P. M. Joseph, et. al. “A Cross-Cultural Comparison of Ethical Attitudes of Business Managers: India, Korea and the United States”, Journal of Business Ethics, 46(3), pp. 263-287, Sep. 2003. * Crane, Andrew, Unpacking the Ethical Product (November 3, 2004). Journal of Business Ethics, Vol. 30, No. 4, 2001.

Available at SSRN: http://ssrn. com/abstract=1533523 Not used * Trevino, L. K. & Brown, M. E. (2004) ‘Managing to be ethical: Debunking five business ethics myths’, Academy of Management Executive, Vol. 18, No. 2, pp. 69-81. * Brown, M. E. & Trevino, L. K. (2006) ‘Ethical leadership: A review and future directions’, The Leadership Quarterly, Vol. 17, Iss. 6, pp. 595–616. * Ardichvili, A. , Mitchell, J. A. & Jondle, D (2009) ‘Characteristics of Ethical Business Cultures’, Journal of Business Ethics, Vol. 85, Iss. 4, pp. 445-451.

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Business ethics

A. Marketing Issues in Business Ethics : Marketing tobacco and alcohol. Discuss the ethics of marketing tobacco, marketing alcohol, or both, in terms any or all of the following: (1) underage customers, (2) target marketing ethnic groups and/or women, (3) moving questionable practices that have been abandoned in the United States to markets in developing nations.

Discuss the ethics of marketing tobacco in ways that are illegal in the United States (i. e, to children during television shows geared to young audiences or in connection with professional athletic events) in developing nations where such marketing to children is not illegal. B. International Business and Business Ethics : Should U. S. safety and other standards be applied worldwide?

Is it ethical to engage in asbestos removal from ships by docking such ships in ports where the legally imposed safety precautions for workers are substantially lower than in the U. S. and thus the cost for removing asbestos from such ships could cost tens of millions of dollars less than removing the asbestos in ports with legally imposed safety precautions for workers similar to the legal standards established in the U. S.?

Is it ethical to employ children to work in a plant if the country in which the plant is located has no child labor laws? When, if ever, do laws in one’s own country established to protect the health and safety of workers or consumers become ethical standards to which one should adhere to in countries without such laws?

C. International Business and Business Ethics : Sweatshops Nike has been plagued over the years with an array of allegations suggesting that its products are manufactured under sweatshop conditions in developing nations. Investigate and discuss the various allegations that have been made over the years, and the defenses Nike has raised. Are the charges against Nike legitimate? What recommendations would you make to Nike going forward, to address this ongoing concern?

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  • University/College:
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Business ethics

-Ethics derived from the Greek word ethos – which refers to the conventional customs and norms of a given culture – the term ethics can be understood in two ways: • as a traditional field of philosophical inquiry dating back to ancient Greece, which is concerned with values as they relate to human conduct; and • as the systematic study of norms and values that guide how people should live their lives. -Ethics is to do with what is good and bad or right and wrong. The study of ethics can be either descriptive or normative.

Descriptive ethics involves empirical research or inquiry into the actual rules and standards of a particular social group. Normative ethics is concerned not only with what people believe they ought to do, but also with what they really ought to do. It therefore entails taking a position. Nevertheless, it must be recognised that these two categories are in actual fact intertwined, as even the most empirically minded individuals engage in prescription as well as description. There is therefore no conceptual barrier to combining descriptive with normative ethics.

-Business ethics theories include the moral principles or codes a company implements to ensure that all individuals working in the company act with acceptable behavior. Business owners and managers can use an ethics theory they deem most appropriate for use in their operations. A few different business ethics theories exist, such as the utilitarian, deontological, rights, justice, common good and virtue approach. These theories can be used on their own or in combination with each other.

Each theory includes specific traits or characteristics that focus on specific ethical principles that can help companies correct business issues. -The utilitarian approach focuses on using ethical actions that will promote the most good or value among a society while limiting the amount of harm to as few people as possible. Among the business ethics theories, this is typically seen as the oldest theory, as it was propagated by many philosophers, such as Jeremy Bentham (1748-1832) and John Stuart Mill (1806-1873). Businesses can use this theory to ensure the outcome of various situations helps the maximum amount of stakeholders.

The “rightness” or “goodness” of one’s action is not inherent in the action per se, but can only be judged by its consequences (or ends). Utilitarianism is the dominant ethical perspective in the business sphere, and can be seen as a “calculating approach” to ethics (Fisher and Lovell, 2006). A common example of business utilitarianism is the adoption of ethical principles – not because it is the “right thing to do” – but because of the image enhancement which this may produce, in view of society’s increased demand for ethical conduct in the business sphere.

A positive company image creates what is known in the literature as “reputational capital” or advantages accruing to companies from a good reputation which may lead to positive outcomes in areas such as improved employee morale, increased strategic flexibility and enhanced financial performance. -The deontological system (Immanuel Kant: 1724-1804) is based on the assumption that actions must be guided by universalisable principles and rules which apply regardless of the consequences of the actions. For Kant, the “moral person” is one of good will, who makes ethical decisions based on “what is right”.

From this viewpoint, nevertheless, an action can only be morally right if it is carried out as a duty – not as an expectation of approval or reward. -The rights ethical approach is based on the belief that all individuals have rights in life and should be treated with respect and dignity. Morals play a large role in this because individuals must personally use ethical behavior in order to achieve the end goal without mistreating people. -Justice as an ethical approach is where all humans are treated equally through society, regardless of rank, position, class, creed, or race.

This is also known as the fairness approach in business ethics theories. If people are not treated fairly — such as one employee receiving higher compensation than another — a justifiable reason must exist, such as higher technical skills or the exclusiveness of a job position. -The common good approach attempts to promote the common values and moral or ethical principles found in a society. This varies from place to place, based on countries’ specific cultural or societal beliefs. For example, the moral principles found in Japan will often be different than those in the United States.

Business owners and managers often implement these principles to ensure their company’s overall mission is in sync with society as a whole. -The virtue approach (Aristotle 384-322 BC) is a bit more difficult for businesses to implement, as its approach focuses on following ethical principles that should be evident in society. These principles or virtues seek to replace the current values if they do not bring about the most good or best development of humanity. Businesses can implement this approach, although it may run against the grain of society until the values take hold among the general public.

-Business ethics is the behavior that a business adheres to in its daily dealings with the world. The ethics of a particular business can be diverse. They apply not only to how the business interacts with the world at large, but also to their one-on-one dealings with a single customer. -Good business ethics should be a part of every business. There are many factors to consider. When a company does business with another that is considered unethical, does this make the first company unethical by association? Some people would say yes, the first business has a responsibility and it is now a link in the chain of unethical businesses.

-If a company does not adhere to business ethics and breaks the laws, they usually end up being fined. Many companies have broken anti-trust, ethical and environmental laws and received fines worth millions. -Therefore, business ethics is concerned with good and bad or right or wrong behavior and practices that take place within a business context. -In short, business ethics refers to “values, standards and principles that operate within business”. Unethical behaviour -It is a sad truth that the employees of just about every business, in every business, will occasionally encounter team members who are taking part in unethical behaviors.

Such unethical behaviors include a wide variety of different activities. Among the most common unethical business behaviors of employees are making long-distance calls on business lines, duplicating software for use at home, falsifying the number of hours worked, or much more serious and illegal practices, such as embezzling money from the business, or falsifying business records. -Though there is sometimes a difference between behaviors that are unethical and activities that are actually illegal, it is up to the business itself to decide how it deals with unethical behavior – legal or not.

-As unethical behaviors are manifested by upper-level management, workers throughout the organization note them, and unethical behavior becomes a cultural norm. Ultimately, this culture results in detrimental behaviors. Leadership -Leadership is the primary way companies foster proper ethical behavior. Leaders and executive managers have a responsibility to set the tone for ethical behavior by conducting business in an ethical and moral manner. If a leader fails to display a proper ethical behavior, workers may be unwilling to accept the company’s ethical guidelines.

-Leaders who act ethically ensure that problems and issues in the company are identified quickly and handled appropriately by managers and employees. Proper leadership ethics also maintain an organization’s long-term viability and business environment, because customers are more willing to embrace an ethical company. Company Culture -A company culture is the intangible business environment created by leaders and executive managers. Leaders use the company’s culture to pass on the mission, goals and objectives and how employees should approach jobs when helping the company reach its goals.

Important elements of a strong company culture include integrity, trust, leadership, professional behavior and flexibility. Leaders and executive managers should weave these elements into company culture to ensure employees understand and follow ethical business principles. -Companies can teach employees the company’s culture by using manuals or informal meetings. These mediums give management an opportunity to explain the importance of ethical business behavior.

-A whistleblower (whistle-blower or whistle blower) is a person who tells the public or someone in authority about alleged dishonest or illegal activities (misconduct) occurring in the business organisation. The alleged misconduct may be classified in many ways; for example, a violation of a rule, regulation and/or a direct threat to the stakeholders, such as fraud, health/safety violations, and corruption. Whistleblowers may make their allegations internally (for example, to other people within the accused organization) or externally (to regulators, law enforcement agencies, to the media or to groups concerned with the issues).

-Businesses have a Code of Conduct and/or Code of Business Ethics that are actively promoted to the corporation’s employees and that are entrenched in its corporate values. As a business grows and as the business model gets more complex, it is important that we provide the company employees with a common set of guidelines to help reinforce and uphold its values. Codes of conducts are very common in business organization and the members are required to sign to indicate formally their acceptance. E. g. Customers are at the core of the success and must be treated with respect.

One way do this is through the customer-focused business model– customer centricity. Customer centricity requires an ongoing relationship of trust between the employee and the customer because the relationship between the customer and the employee is much more than transactional. The employees share an obligation to: • Treat all customers fairly and honestly. • Communicate in a respectful and helpful manner. • Provide prompt and accurate customer service. It is a duty to protect any customer’s information and privacy. • It is extremely important to keep the Company’s private information confidential.

Not discuss these confidential matters with anyone outside the organization. -A business success is based on strong relationships with customers, vendors, suppliers and others. Employees and directors are prohibited from: • Taking personal advantage of opportunities that are discovered through the use of corporate property, information or position. • Using corporate property, information, or position for personal gain. • Employees are required to disclose or avoid any activity or interest that may be regarded as a possible conflict with the company’s interest.

• Employees are expected to be mindful of the Company’s values and standards in their business dealings. It is never acceptable to solicit gifts, gratuities or business courtesies on behalf of the business organisation for the personal benefit of an employee, family member or friend. • In all situations employees are prohibited from implying that they represent the company in any political activities. • If you are contacted by a representative of any government agency, don’t handle the situation by yourself. Contact your Legal Department. A model of an employee acknowledgment of the Code of ethics of XYZ co.

Ltd. I acknowledge that I have received and will comply with XYZ co. Ltd Code of Business Ethics (the Code). I also understand that I have the responsibility to review XYZ co. Ltd policies and procedures. I understand that violation of the policies and ethical standards outlined in the Code may subject me to disciplinary action up to and including termination without notice. I understand that if I have questions related to the standards of conduct outlined in the Code or other Company polices not covered in the Code, I am to discuss them promptly with my manager or the Ethics Office, Human Resources dept.

I also understand that I may be required to sign one or more annual statements reporting conflicts of interest or receipt of gifts and gratuities. Date: Name of employee: Department: Employee number: Signature: Sources: Caroll & Buchholtz, Business and Society, 5th edn. Robbins P. R, Organisational Behaviour, 11th edn. Weiss J. W, Business Ethics, 4th edn. www. bestbuycanadaltd. ca/ www. edc. ca/ www. ehow. co. uk/ www. wisegeek. com.

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  • University/College:
    University of Chicago

  • Type of paper: Thesis/Dissertation Chapter

  • Words: 688

  • Pages: 3

Business ethics

The case regarding Fashion First is a very interesting case as it allows for a discussion to take place in relation to ethics. Ethics could be defined as moral principles that govern a person’s or group’s behavior. In other words, ethics allow for individuals to distinguish between right and wrong, and to make decisions based on what is right or wrong for any particular situation. In this situation, Sandy, the part-time bookkeeper of Fashion First is approached with a situation where she noticed that $500 cash was missing from each deposit while she was looking through weekly deposit chats.

After a more thorough inspection of the monthly tax documents that the owner of Fashion First, “Buzz” Thompson (her manager) filled out, she noticed that the monthly gross revenue was $2,000 less than what had actually been counted. After she approached “Buzz” Thompson about the scenario, “Buzz” asserted that she shouldn’t be concerned since she wasn’t the person who signed the forms. This brings up an ethical dilemma that allows for a discussion on what the “right” thing to do is, and how morals could affect the decision made by Sandy.

This case is very interesting due to the fact that Sandy is only an intern who is an accounting student at a University. Heather Hunter, a Senior in the CPA firm, was one for Sandy to go to if in need of anyone to talk to or attain advice from for anything regarding the company. Sandy mentioned to Heather her knowledge of unlawful actions regarding Fashion First. Sandy’s concern related to the handling of sales revenues, as monies are counted and deposited on a weekly basis as a chart is filled out with categories carefully delineating the type of payment: cash, checks, American Express, or Visa/Mastercard.

She would bring her chart to her employer (in this case Mr. Thompson) and her employer would bring his own written in total of the actual amount deposited on his own chart, basically comparing the two charts. The issue in this case of apparent fraudulent behavior completely disregards the IMA Statement of Ethical Professional Practice and its principles. This IMA Statement follows the principles of honesty, fairness, objectivity, and responsibility, and if any member fails to comply with the following standards may result in disciplinary action.

Mr. Thompson clearly fails to comply with the standards of the IMA Statement in many ways. In regards to competence, “Buzz” fails to “perform professional duties in accordance with relevant laws, regulations, and technical standards” and fails to “provide decision support information and recommendations that are accurate, clear, concise, and timely. ” The amounts in his chart are low in comparison to the chart calculated by Sandy; therefore the information is inaccurate, and not concise, as it is against the law.

In regards to confidentiality, it is mentioned to “refrain from using confidential information for unethical or illegal advantage. ” Mr. Thompson does the complete opposite as he illegally mistakenly counts $2,000 less than what had actually been counted in Sandy’s chart. This is “illegal advantage” as that $2,000 is in his pocked at the end of the day. In regards to Integrity, Mr. Thompson disregards the responsibilities which read: “refrain from engaging in any conduct that would prejudice carrying out duties ethically” and abstain from engaging in or supporting any activity that might discredit the profession.

” It is obvious that what he is doing is illegal, and that it “discredits the profession. ” In regards to credibility, Mr. Thompson does not “communicate information fairly and objectively,” as he tells Sandy that she shouldn’t be concerned since she isn’t the one who signed the forms. This is unethical behavior by “Buzz” Thompson, and Sandy did the right thing by approaching him in regards to the situation.

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  • University/College:
    University of Chicago

  • Type of paper: Thesis/Dissertation Chapter

  • Words: 1946

  • Pages: 8

Business Ethics

INTRODUCTION

There are decisions made every day in the business world, some big, some small. The biggest struggle professionals face when making these decisions are the ethical consequences they face. Every decision that is made is going to have an impact on at least one person, no matter the size of the decision. And there are ethical consequences to all decisions. In the following paper I will be comparing Maslow’s Stages of Behavior and Kohlberg’s Stages of Moral Development with ethical and unethical behaviors of businesses and society. Both Maslow and Kohlberg have established a hierarchy of either behavior or moral development. I will take both of these hierarchies and apply them to the behavior of business and society, as well as including service-to-self and service-to-others concepts.

BACKGROUND (MASLOW & KOHLBERG)

Before we can discuss how Malsow and Kohlberg play a role in ethical and unethical behaviors in business and society, it is necessary to understand the values of these theories, beginning with Maslow’s Stages of Behavior. Malsow presents these stages in a hierarchical format, beginning with the lowest order, up to the highest level. The first level is physiological needs, followed by safety, love/belonging, esteem, and finally reaching the highest level of self-actualization. 1 In this hierarchy the first level is usually achieved before reaching the second level, and this continues along the hierarchy. Therefore, the ultimate level of reaching self-actualization isn’t usually achieved until all lower levels have been reached and in a sense, conquered. Similar to this theory is Kohlberg’s stages of moral development.

Kohlberg’s theory also states that the stages are reached in an order and one must be reached before the next, but can stop at any point, so that the highest level is not attainable by everyone. 2 Kohlberg’s stages of moral development consist of three levels and six stages. The first level is Pre-conventional morality (stages 1-2): Obedience and Punishment, Individualism and Exchange. The second level is Conventional morality (stages 3-4): Good Interpersonal Relationships, and Maintaining the Social Order. The third level is Post-conventional morality (stages 5-6): Social Contract and Individual rights, and Universal principles.3

FOCUS ON UPPER LEVELS

For both Maslow and Kohlberg there is a heavy emphasis on reaching the final stage or level. Reaching the self-actualization stage of Maslow’s stages shows that one has fully developed behavior, and moral behavior. Reaching the final stage of universal principles of Kohlberg’s stages shows that one has fully developed morally, very similar to Maslow. For Maslow’s stages a person is capable of reaching this final stage and then regressing back to lower stages.4Usually reaching this higher stage is only temporary and is seen as peak experience.4

This could be in a sort of out of body experience. But once someone has reached this stage, it usually impacts them for the rest of their life, and they do not immediately go back down to lower levels. This stage could also be called, or is known as having integrity.5 This integrity is for oneself and for others, including “a total commitment to the highest standards of behavior”. 5 This is where ethical and moral reasoning and behavior comes into play. People who have reached or have experienced the highest level of Maslow are going to act morally and ethically in their behavior.

The last stage of Kohlberg is universal principles. This stage “defines the principles by which we achieve justice”. 6 To me this stage entitles treating everyone with dignity. This reminds me of the integrity involved in the highest stage of Maslow. In this stage every human being is given equal respect and is treated with the highest dignity. People who have reached the highest stage of Maslow would not vote for a law or agree with anything that causes some harm to others while helping the majority.6

ETHICAL AND UNETHICAL BEHAVIOR

Now that the theories and stages of Maslow and Kohlberg have been discussed, it is necessary to see how these stages play a part in making either ethical or unethical decisions in the workplace and in society. The first example to take a look at is the behavior of students cheating in school. This is a common example, but it could easily be applied to employees stealing from a company, or anyone taking shortcuts in life to get ahead. Many people would agree that cheating would correlate to students with less moral and ethical values.

During a study by Kohlberg, it was seen that 70% of the students on the pre-conventional level have been found to cheat.7 The pre-conventional level indicates that people are not fully morally developed. These people seem to lack moral development, and therefore will act unethically. The people at these lower levels do not have the respect and dignity for others that the upper level people do. Because this is the case they are more willing to cheat, and don’t feel guilty for what they are doing.

This can easily be transpired into the business world. People cheat and steal money because they have no respect or dignity for the people that they are affecting. They will not take into consideration all of the stakeholders at risk because of their actions. Take for example, Bernie Madoff and the scandal at Enron. This is a case famous across many business environments, for unethical behavior that caused harm to many stakeholders. No one would disagree that Madoff was a very savvy and smart business man. But, because of his actions he would fall into a lower level of Maslow.

SERVICE TO SELF AND OTHERS

People who have reached the highest level of Maslow (peakers, we will call them), and those who have achieved the highest level of development Kohlberg presents will have a service-to-others attitude. These people are less materialistic, and are more socially concerned.8 There seems to be a correlation between people in upper level Maslow who have higher levels of ethical development, and those who are in the upper stage of Kohlberg and have higher levels of moral development.8 This correlation also relates to how these people treat those who are around them. They are not self-centered and are instead focused on the well being of everyone around them.

As mentioned before, they seem to be concerned with giving every human being the respect and dignity that they deserve. If someone is concerned with the way that they are treating others, this is seen as a moral consideration. And if they are concerned with how well they are treating themselves, it is seen as a non-moral consideration.8 So, those who are focused on service-to-others instead of service-to-self are more likely to belong to the higher levels of Maslow and Kohlberg. Those who are more concerned with themselves and have a service-to-self attitude; they are stuck in the lower levels. They are still trying to achieve the basic needs that Maslow sets out.

HOW IT ALL FITS INTO AN ORGANIZATION

The most difficult part about these two theories, are what they have to do with an organization, how employers can utilize this information to better motivate their employees, and people are going to treat themselves and others within the levels of Maslow and Kohlberg. One of the biggest examples of this, are how these theories can be incorporated into a non-profit organization.

These organizations would be more known for their ethical behavior than most other companies. These companies can obtain an ethical culture by following and paying attention to the hierarchy of values that Maslow proposed.9 Maslow noted that in order to achieve the highest value the previous needs have to have been met. If a company takes this into consideration than they should make sure the lower needs of the employees are being met, if they expect them to behave ethically. This leads to an ethical culture.

In the article that discusses this they translate the individual levels of Maslow into levels that an organization should achieve. These levels or needs are financial competence, accountability, reciprocity, respect, and integrity.9 They feel that in order to employees to attain the ethical values and culture that is wanted, the lower needs must first be met. This may include wage benefits and giving employees more responsibility to begin with. Eventually employees will feel a sense of respect from the employer and will work their way up to level 5. If all of the employees at this company are at the level 5, then they have an ethical culture. This is a way to apply the theories of Maslow and Kohlberg into an organization, even if is a for profit company, and achieve the ethical culture that is desired.

CONCLUSION

To sum up, Maslow and Kohlberg have developed a hierarchy of needs and stages of moral development, respectively. It is possible to use these models to understand the ethical and unethical behavior of people in businesses and in society. There is a focus on achieving self-actualization and universal principles. If someone has reached this level of self-actualization it transforms their identity, and they are more apt to act morally and ethically. In the same sense, those who are in the universal principle level of Kohlberg, treat all humans with the respect, integrity, and dignity that they deserve. The people in these upper levels are also known to have a service-to-others attitude, instead of service-to-others. Lastly, companies can use this information to make sure the basic needs of their employees are being met, in order to achieve an ethical corporate culture.

ENDNOTES

1. SADRI, GOLNAZ, and R. CLARKE BOWEN. 2011. “Meeting EMPLOYEEE requirements: Maslow’s hierarchy of needs is still a reliable guide to motivating staff.” Industrial Engineer: IE 43, no. 10: 44-48.

2. Walker, Lawrence J. 1982. “The Sequentiality of Kohlberg’s Stages of Moral Development.” Child Development 53, no. 5: 1330-1336., 1330-1336.

3. W.C. Crain. (1985). Theories of Development. Prentice-Hall.

4. Christopher, John Chambers, Guy J. Manaster, Robert L. Campbell, and Michael B. Weinfeld. 2002. “Peak Experiences, Social Interest, and Moral Reasoning: An Exploratory Study.” Journal Of Individual Psychology 58, no. 1: 35

5. Strickland, Ruth Ann, and Shannon K. Vaughan. 2008. “The Hierarchy of Ethical Values in Nonprofit Organizations.” Public Integrity 10, no. 3: 233-235

6. W.C. Crain. (1985). Theories of Development. Prentice-Hall.

7. Emerci, Çetin. 2006. “THE OPINIONS OF MEDICINE FACULTY STUDENTS REGARDING CHEATING IN RELATION TO KOHLBERG’S MORAL DEVELOPMENT CONCEPT.” Social Behavior & Personality: An International Journal 34, no. 1: 41-49

8. Christopher, John Chambers, Guy J. Manaster, Robert L. Campbell, and Michael B. Weinfeld. 2002. “Peak Experiences, Social Interest, and Moral Reasoning: An Exploratory Study.” Journal Of Individual Psychology 58, no. 1: 35

9. Strickland, Ruth Ann, and Shannon K. Vaughan. 2008. “The Hierarchy of Ethical Values in Nonprofit Organizations.” Public Integrity 10, no. 3: 233-235

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Business Ethics Essay

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  • University/College:
    University of California

  • Type of paper: Thesis/Dissertation Chapter

  • Words: 703

  • Pages: 3

Business Ethics

The aim of this essay would discuss on whether ethics is required or optional on business. On this essay it will analyse four ethics theory, namely Milton Friedman, R. Edward Freeman, Albert Carr and Carroll. Milton Friedman and Albert Carr illustrate that ethics is required whereas Edward Freeman and Carroll state ethics is optional. After analysing these theories, it is difficult to find out that whether ethics is optional or required.

However choosing on whether ethics is optional or required would depend on the objective and personal characteristic on managers or leader. Furthermore this essay would state on the understanding on ethical behaviour or being a ethical organisation. By defining the meaning of business ethics, Crane and Matten (2007) illustrated that business ethics is the study of business situations, activities, and decision where issues of right and wrong are addressed.

Society often expects organisations to behave an ethical behaviour toward their stakeholders such as employees or suppliers. However the amount of expectation from business to the society is not clear. There have not got an obvious bottom line on whether the amounts of ethical behaviour need to achieve from business or could business avoid providing ethical behaviour in some part of business. The debate between ethics is required or optional are never been terminative.

By considering ethics in business as a whole, this essay will discuss whether ethics is required or optional on business Other theorist, Freeman, believe that management has a fiduciary duty to all its stakeholders and that the interests of the stockholder ought not to have priority over the interests of the other stakeholder (Bowie and Werhane, 2005) which know as the stakeholder theory. This is unlikely the two theories mentioned before, the concept of this theory concentrates on stakeholder rather than the Corporate social responsibilities.

By understanding this theory, it seems that business needs to certain moral obligation toward the stakeholder if the obligation would benefit the business. Furthermore, other theorist, Carroll, stated that ethical responsibilities are an optional. According to the Carroll’s four-part model of corporate social responsibilities, cited in Crane and Matten (2007), economic responsibilities and legal responsibilities are the required by society whereas the ethical responsibilities is the expected by society.

As Carroll mentioned, ethical responsibilities therefore consist of what is generally expected by society over and above economic and legal xpectations. It seems that economic and legal responsibilities are the basic need for ethical responsibilities and more important than the need of ethics. Some business would describe their behaviour is ethical in term of their behaviour toward the stakeholder. According to Bowie and Werhane (2005), manager stated that they pay taxes and provide jobs and that these activities are sufficient to meet their obligations. However it seems that this statement is misunderstanding on the meaning of ethical behaviour as pay taxes and provides jobs are their obligations, not ethical behaviour.

In term of the ethical behaviour, businesses need to provide reasonable wages, good benefits and job security for employee. On the external environment, businesses need to ensure that their behaviour is ethical, for instance support the public services. Furthermore, Bowie and Werhane (2005) mentioned that if business firm commit to supporting the community because it is profitable, then there is nothing ethical about the commitment. In conclusion, after analysing the four ethical theories, it is more likely that the major responsibilities for business are providing profit and following the law.

However it is difficult to conclude on whether ethics is optional or required on business. By choosing on whether ethics is optional or required would depend on the objective and personal characteristic on managers or leader. If managers or leaders more concern on profit and legal, then ethics is required. On the other hand, if manages or leaders concern more level of expectation stakeholder, then ethics is optional. Furthermore, business needs to understand the way of being ethics. As mentioned previously, if business misunderstands what is ethical behaviour, this would lead business become unethical.

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  • University/College:
    University of California

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  • Words: 511

  • Pages: 2

Business Ethics

H.B Fuller and the Street Children of Central America (Summary) The Resistol were produced by H.B Fuller company, a global manufacture of adhesives, sealants, and other specialty chemicals, and had operations in over 40 countries in North America, Europe, Asia and Latin America. H.B Fuller was a very profitable company. Honduras and Guatemala are two countries where fuller markets it glue products and the two countries where Resistol abuse is most pronounced. More than a third of people in Honduras and Guatemala were below poverty, and this economic condition directly affected to Family Life situation, commonly unstable, stressful conditions, husbands abandoned their wives and children. The countless children ran away from home life and roamed the city street, street children uses glue (H.B Fuller) by sniffing them (glue addicted) as the way to get-away from their real life condition.

The misuse one of the adhesives, Resistol, a toluene base glue, by the street children of America, where the social economic was taking part of this situation. For years H.B Fuller had been pressure by child advocate groups in Central America and the United States, and encouraged the company to minute amounts of mustard seed-oil a common food additive, reported virtually eliminated abuse of its glue. In March 1989 legislature of Honduras passed decree 36-89 which banned importing or manufacturing solvent based adhesives that did not contain mustard oil. This situation surely disadvantages for H.B Fuller company business environment , H.B. Fuller subsidiary began lobbied the government to have the law revoked, brought some data and showed by adding the mustard seed oil caused; reduce the glue effectiveness, the smell would irritating to legitimate user, the substance was potentially carciogenic.

H.B Fuller also took several actions related to help to prevent glue addiction for street children, in order to reduce the availability of glue to children they discontinued selling the glue in small jar, paying the social workers to work with street children and began providing information to distributors warning of the dangers of Resistol addiction. The actions keep continued on July 16th, 1992, the company stop selling the glue to retailer and only sold the glue to industrial customer in large tubs and barrels and cooperate with distributors to set up new control restricting distributions in retailer, on 1994, the company decided to change the toluene based into cyclohexane and increased the price up to 30% it further out of reach of children, of these moves, the company said, that this would discourage use of this glues among street children. In 1995, company issued a statement claiming that in reality it, neither manufactured nor sold Resistol, instead the company, asserted it was a subsidiary of a subsidiary of the company in central America that had actually made and sold Resistol, and claims that the company was responsible the deaths of children are nothing More than attempt to hold fuller liable for acts and omissions of its second-tier Guatemalan subsidiary.

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  • University/College:
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  • Words: 1652

  • Pages: 7

Business Ethics

1.Introduction

Precisely define the concept of “ethics” is quite difficult. In a general sense ethics – a set of moral principles and values that govern the behavior of a person or group of people and determining the positive and negative assessments of their thoughts and actions. Ethics associated with inner values, and they in its turn are part of the corporate culture and influence on decision making, determine their social validity within the environment. Ethical problem arises when the actions of an individual or organization may harm or conversely benefit others. Since ethics are unwritten rules, the issue of assessing an action often has irreconcilable differences.

The so-called ethical dilemma arises in a situation where all the alternative solutions or courses of action because of its potentially negative moral consequences are undesirable, it is difficult to distinguish good from bad, right from wrong. Person who assumes responsibility for the organization of emerging ethical issues, often referred to as an agent of morality. This assignment examines the various approaches to the ethical issues, the study of which allows management to develop criteria for their analysis and solutions.

2.1 The Four approaches to make ethical decision

Most ethical dilemmas is a conflict between the whole thing and its parts: the organization and the individual, the community and the organization. For example, should the company be subject to mandatory testing of their employees in the use of drugs and alcohol, which can benefit from it, but it restricts the freedom of action of individuals? Is it right to export goods that do not meet national quality standards in other countries with less stringent requirements? Sometimes ethically complex solutions involve a conflict between the two groups. For example, what is more important: the pollution caused by wastewater businesses or jobs that it creates, as the largest employer? Faced with the problems of an ethical choice, managers tend to be based on a normative point of view, that are certain norms and values, in accordance with which decisions are made. In normative ethics identify several approaches to the description of the system of values and hence the adoption of ethically difficult decisions, which can be used in the practice of management: THE UTILITARIAN APPROACH, THE RIGHTS APPROACH, THE FAIRNESS OR JUSTICE APPROACHES AND THE VIRTUE APPROACH.

2.2 The Utilitarian Approach

Basic principles developed in the XIX century by philosophers Jeremy Bentham and John Stuart Mill’s utilitarian approach states that appropriate behavior morality brings the greatest benefit to the greatest number of people. An individual decision-maker should review the impact of each option on all of its stakeholders, and to lay the one that brings satisfaction to the greatest number of people. In essence, it is about finding the best solution. As the complete calculations can be quite complex, allowed simplified conditions. For example, the calculation of costs and benefits in monetary terms can be used a simple economic criterion. In addition, while deciding rightly consider the situation only directly affected their sides. Utilitarian ethics justifies the introduction of a ban on the use of alcohol and smoking in the workplace, and in some cases at the end of work, as this behavior has a negative impact on the collective organization.

Similarly, many companies monitor Internet use explains the need to maintain a healthy and productive environment. If employees are browsing pornographic websites, participate in racist forums or whole day browse on the virtual shopping, eventually suffers organization. Anyone who uses a utilitarian approach, assessing the impact of specific actions on the people who are directly involved in this process, while trying to produce the greatest good for the greatest number of people. Utilitarian approach focuses on the actions themselves, not the motives behind these actions. Potentially positive results of actions are weighed against the potential negative results. If the former outweigh the latter, manager, guided by a utilitarian approach is likely to begin to consider the action. The fact that some people, these actions could adversely affect recognized the inevitable and acceptable.

2.3 The Virtue Approach

The virtue approach assumes that the moral and human actions are acceptable that benefits in the long term. The main driving force is self-control, and all the external forces that limit it should be stopped. Each person chooses for himself the most profitable in the long-term solution, based on which it judges the quality of their actions. One of the features of this approach is that it allows of the individual, aimed at the acquisition of personal short-term gain, in general, do not meet social norms. Precisely because individualism can be easily interpreted as a desire for purely personal purposes, it is not very popular in today’s highly organized communities focused on group goals. The approach most closely approximates to the area of free choice.

2.4 The Rights Approach

The rights approach holds that man was originally endowed with fundamental rights and liberties, which cannot be violated or limited by decisions of other people. This means that the ethically correct to the solution that best respects the rights of those affected. It is assumed that the ethically correct decision should not violate these fundamental rights. Thus, the decision to listen to conversations of employees violates their right to privacy. Sexual harassment is unethical, as contrary to the right to freedom of conscience. The right to free speech justifies the actions of informants reported to management of the organization or the authorities about illegal or inappropriate actions of officers. Those who adhere to the rights approach, assess whether the decisions and actions of the basic civil and group rights and privileges. Some of these rights and privileges are listed in documents such as the Bill of Rights (the first 10 amendments to the Constitution of the United States) and the United Nations Declaration on Human Rights. The rights approach takes into account human rights such as the right to life and personal security, privacy, freedom of conscience, freedom of speech and private property.

2.5 The Fairness or Justice Approaches

The conception of justice claims that ethically correct decision should be based on principles of equality, fairness and impartiality. In terms of management, there are three types of justice. Distributive justice requires that the ratio of managers to subordinates based on objective criteria. Thus, if the decision relates to such individuals to each other, it should equally apply to that and the other. Therefore, if a man and a woman do the same work assignment, they get about equal pay. However, if between the employees there are significant differences (for example in terms of skills or responsibilities), the ratio of management to them varies according to the skill level or display a sense of responsibility. But the attitude of the manager to subordinates must be clearly linked to the goals and objectives of organizations, not from other sources. Procedural fairness requires fair administration of subordinates. The rules should be clear, concise, and unbiased constantly enforced.

Compensatory justice requires responsible party to compensate the damage caused to people. Moreover, people should not be held responsible for events that are beyond their control. The concept of fairness is closest to the legislation, as it is based on rules and regulations. This theory does not require complex calculations, as in the utilitarian approach, and does not serve its personal interests, which is possible in a virtue approach. It requires managers to determine for itself the characteristics of attributes, according to which evaluate the actions of workers. The conception of justice supports attempt to correct mistakes of the past, as well as fair play within the rules.

In accordance with it the basis for a different pay or promotion can act reasons related solely to perform the job tasks. Most of the administration of human resources rules and laws are based on the concept of justice. Manager, who uses the approach of social justice, judges of how its actions fair and impartial in the distribution of awards and values among individuals in groups. These ideas arise from the two principles known as principles of freedom and differences. The principle of freedom holds that man has certain liberties that are compatible with the same freedoms enjoyed by other people. The principle differences argues that if there are doubts about the correctness of a decision, all the social and economic injustice, thus eliminating the need to be able to more fairly distribute goods and services.

3.Conclusion
4.Recommendation

Most people, who are in business, hold a utilitarian point of view on the issue of business ethics. Arguing it actions to maximize profits, the CEO can always say that it thus seeks to ensure the maximum benefit for the majority of stakeholders. As a result of extreme volatility environment management personnel must reject this approach.

A characteristic feature of utilitarianism is “impairment” interests of the individual and minority interests of the majority, and new trends in the field of human rights and social justice require that managers need ethical standards based on diametrically opposed principles. This is a complex task of modern management as well as management decisions should be made taking into account criteria such as human rights, social justice and the standards of the local community. This will increase the degree of ambiguity of administrative decisions. As a result, managers are increasingly faced with problems of moral and ethical character.

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  • University/College:
    University of Arkansas System

  • Type of paper: Thesis/Dissertation Chapter

  • Words: 1271

  • Pages: 5

Business Ethics

1.Rebuttable presumption

2.To protect them from adults who might take advantage of young people who do not fully understand their obligations.

3.21 years of age.

4.In 1971, the voting age was lowered the voting age from 21 to 18. To avoid the confusion that would result from having two voting ages, the states started to enact new laws that enabled 18-year-olds to vote in state and local elections.

5.Minors, who become emancipated, that is, no longer under the control of their parents, are responsible for their contracts. Abandoned minors are no longer protected from liability on their contracts, merchants are still reluctant to deal with them on a credit basis, fearing that they may still attempt to disaffirm, or repudiate, their contracted debts.

6.Some jurisdictions do not permit the minor to get away with the lie. Some states require the minor to place the adult party to the contract in the same situation that he or she was in before the contract. Others allow the adult to use tort law, rather than contract law, to sue the minor for fraud.

7.If a minor makes a contract for necessaries, he or she will be liable for the fair value of those necessaries. Despite the general tenor of this principle, if the necessaries have already been provided to the minor by parents of others, the rule does not apply. In addition, not everything that a party claims as a necessary will actually be a necessary. To determine whether goods and services qualify as genuine necessaries, the court will inquire into the minor’s family status, financial strength, and social standing or station in life. Necessaries, then, are not the same to all persons.

8.For public policy reasons, minors may not at their option disaffirm a valid marriage or repudiate an enlistment contract in the armed forces based on a claim of incapacity to contract. Neither may a minor repudiate payments for inoculations and vaccinations required for attendance at a university or college or required in securing a visa for travel in certain foreign lands. They may also be prevented from terminating contracts with banks and other financial institutions for educational loans. Some states bar minors from repudiating agency contracts and insurance contracts. Others prevent them from voiding contracts involving child support.

9.Contracts of persons who are mentally infirm or mentally ill, but not legally declared insane, may be valid or voidable, depending on the seriousness of the mental problem. Persons declared to be insane by competent legal authority are denied the right to enter into contracts, and contracts entered into may be declared void.

10.Incompetence related to alcohol or drugs must be of such a degree that the contracting party has lost the ability to comprehend or be aware of the obligations being accepted under the contract.

Cases for Analysis Pages 137-138

1.The rule may seem antiquated in view of the arguable maturity of today’s youth. It may seem ironic that a minor can drive a car yet not be bound by the contract to purchase that car or be responsible for his torts and crimes yet unable to settle a dispute against a tortfeasor. The distinction to be made is that too frequently a contract involves negotiation and thought beyond the maturity of most people under the age of eighteen. We cannot adopt a rule that marriage by the minor somehow classifies him as more mature and intelligent than his unmarried counterpart. We, as did the court in Kiefer v. Fred Howe Motors, Inc., find that logic and common sense would not encourage such a result since marriage by a minor too frequently may itself be indicative of a lack of wisdom and maturity.

2.In California, anyone below the age of 18 is considered a minor. A minor does not have legal capacity to enter a contract. If a minor enters a contract, the minor has the option to voiding the contract. However, upon reaching the age of majority, the person may take some step to affirm the contract which will make the contract valid and binding against him.

3.It would be difficult to get the cd player back due to being sold to another buyer.

4.Yes. A purchase contract by a minor is voidable despite the participation of an adult in the transaction. The court held that the participation of P’s aunt and grandmother in the transaction did not change the rule that contracts by a minor regarding personal property are voidable. The evidence showed that the sale was made between P and D and not one of the adults. D was fully aware of P’s age when the sale was negotiated and P had every right to disaffirm the sale. D had the burden to show that the car was a necessity and D did not meet that burden. Disposition: Reversed and remanded.

5.The vehicle was sold to an adult first. The father would have to take it back to the person that purchased it.

6.In Dalton v. Bundy, 666 S.W.2d 443 (Mo.App.1984) the parents of a twelve-year old had transferred property to their daughter, and then had contracted with the installer to place siding on the house.   The parents defaulted in paying for the siding.   The record provided no evidence that the daughter had either requested the siding or knowingly accepted the benefit of it (and it was not even clear that the daughter resided in the house).  Id. at 445.   The court held that the daughter was not subject to personal liability in unjust enrichment for the payment of the work.  Id. at 446. 7.For public policy reasons, minors may not at their option disaffirm a valid marriage or repudiate an enlistment contract in the armed forces based on a claim of incapacity to contract.

8.A client’s legal capacity or competency to perform a particular act is a threshold question that must be one of a title and escrow officer’s first considerations. The officer should understand the standards for the capacity required performing certain legal acts and what steps can be taken to maximize a client’s independence and protect against elder abuse.

9.Whether a person has the capacity to perform a particular act is examined as of the time of the act. Even if several signs point to mental incompetence, it is possible for a person to have “lucid intervals” during which he or she has requisite capacity to enter into a contract or make a disposition of property. Uribe v. Olson, 42 Or App 647, 651 (1979); Gentry v. Briggs, 32 Or App 45, 50 (1978). However, clear and convincing proof is required to show that the legal act was performed during a lucid interval. Gentry v. Briggs, 32 or App at 50.

10.Contracts of persons who are mentally infirm or mentally ill, but not legally declared insane, may be valid or voidable, depending on the seriousness of the mental problem. Persons declared to be insane by competent legal authority are denied the right to enter into contracts, and contracts entered into may be declared void.

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Business Ethics Essay

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Business Ethics Essay
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  • University/College:
    University of Arkansas System

  • Type of paper: Thesis/Dissertation Chapter

  • Words: 250

  • Pages: 1

Business Ethics

In 1956, the Mondragon Cooperative Corporation, or MCC, made a small start in Basque region of Spain, at the initiative of five young engineers, inspired by a Catholic priest by the name of Jose Maria Arizmendiarrieta. Today it has emerged as a truly multi-billion dollar international enterprise with a highly integrated network of 100 MCC cooperative enterprises and competes quite successfully with conventional capitalist corporations both locally and worldwide.

The success of this alternative business model in predominantly capitalist system can be judged from the fact that today there are 750,000 co-operatives worldwide with about 760 million members. There is abundance of information and literature documenting the success of the Mondragon experiment and its comparative analysis with conventional capitalist corporations on various organisation aspects. This essay aims to put a special focus on position and treatment of two key stakeholders, shareholders and employees, while comparing MCC with General Motors (GM), a well renowned US corporation.

This essay is structured into four sections: the first outlines the historical development and ethical foundation of the MCC in much abbreviated terms. The second section provides a generic and ideological comparison the two corporations. The third section adds granularity in similarities and contrasts with specific examples from MCC and GM. The fourth section aims to touch upon the ethical perspectives within the two corporations and critiques the approaches. Finally, Section five, concludes the essay by presenting key insights from the MCC experiment for corporations in 21st century.

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Business Ethics Essay

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Business Ethics Essay
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  • University/College:
    University of Arkansas System

  • Type of paper: Thesis/Dissertation Chapter

  • Words: 1285

  • Pages: 5

Business Ethics

As we have discussed the ethical issued related to production and distribution of wine, we will now focus on the ethical issues relating to the consumption of wine. The consumption of wine in U. S. has been on the rise since last fifteen years. The U. S. ranks 34th in wine consuming nations with wine consumption of 7. 69 liters per capita per annum. The consumption of wine in 1994 was 404 million gallons which increased to 658 million gallons in the year 2008. These figures show the growing popularity of wine in U. S. Consumption grew 2. 5% per annum.

As capita income per person has increased, the wine consumption has also seen a increasing trend. According to U. S. Beverage Marketing Corporation, the organic wine consumption have rise in last few years. As people are getting environmental and health conscious, they are turning towards organic products. In 2003/04, organic wine consumption was about 6. 5% of total beverage market in U. S. , which increased to 9. 5% in the year 2007/08. This signifies the important aspect of change in the human nature that is turning to the products which is beneficial to both humans and environment.

The type of wine customer consumes depends on the number of factors namely per capita income, household size, preference of quality over price etc. The nutrition facts of wine are minimal. There is no cholesterol or fat present in the wine. Generally, the alcohol content ranges in between 10-15%. Over consumption of wine can be dangerous to health as it can cause unconsciousness and high blood pressure. Nutrition Facts (Serving Size 6 oz) Amount per serving| Red Wine| White Wine| Calories| 123| 115| Protein| . 28 grams| . 14 grams|

Cholesterol | 0| 0| Sodium | 8. 5 milligrams| 8. 5 milligrams| Carbohydrates| 2. 9 grams| 1. 35 grams| Vitamin B1(Thiamin)| . 01 %| . 01 %| Vitamin B2 (Riboflavin)| . 05 %| . 01 %| Vitamin B3 (Niacin)| . 13 %| . 12 %| Organic wine is the wine produced from organically grown grapes without adding any sulfites. Organic wine is the best quality wine obtained without relying on chemical fertilizers. The most important aspect of producing organic wine is the matching of unique characteristics of growing region with the most suitable variety of grapes.

Different varieties of grapes need different soil and climate to grow. Usually, warm and dry climates are suitable for growing quality grapes and these climates protect the grapes against moulds and other diseases resulting from humid climate. The smaller sized grapes are suitable and desired for the production of organic wine because we get the distinctive taste for a particular wine from grape’s skin and the smaller grapes has high skin to juice ratio as compared to the large sized grapes.

But the yield per field of small sized grapes is considerably low, which increase the cost of production per unit volume. The grapes in the organic vineyard are usually handpicked which allows only the ripest and healthiest grapes to be picked up. This process also minimizes the damage to the soil and the fruit. This accounts for the difference in taste of the wine. But this handpicking of grapes increase the labor costs. Low yield and handpicking of grapes, along with other factors, increase the overall production costs.

Thus, organic wine is generally expensive than the regular wine. It is far better in quality and taste than the regular cheap wine. The consumption of organic wine has effect on the environment. As the grapes have been grown naturally, no pesticides or insecticide had been used and re-plantation of oak trees to replace the cut oak trees helps in preserving the nature and benefits the world around us by preserving the soil and help reducing the pollution to both air and soil. It helps maintain the balance of nature. The organic wine production is an ethical business process.

Nobody feels cheated in this process, as the customer gets the quality products for the dollars he/she spends and know what he is getting as there is no deception on the labels, and the producer get the return for following the sincere ethical processes. Customers get the value for the money spent as they get high quality wine with distinctive taste. On the other hand, the producer earns enough to cover his costs of production and also makes a profit. The environment is also saved through this ethical business practices which is the biggest gain.

On the other hand, the regular wine can be produced with the large sized grapes and the insecticides and pesticides are used on a large scale. As the yield of large grapes is more, the cost of production per unit volume is low. This results in lower prices. The regular wine is pretty cheap and available in abundance qualities. Thus, it is affordable to people with low income. It is cost friendly to both the wine producers and the customers. Wine producers can adopt mass production of the regular wine as the production costs are low and there are no special regulations to be followed, this result in increased profits.

Customers are also attracted to the low- priced wine as they have to spend less and get their wine desire satisfied with this low priced regular wine as compared to costly organic wine. But there are consequences of drinking cheap wine. The production of regular wine has an adverse effect on the environment. As the consumption of regular wine is increasing, so does the adverse effects. The use of unlimited pesticides, insecticides and other chemicals not only pollute the soil but also the air we breathe. It even spoils the water bed beneath the soil.

The deforestation of the oak trees is rapidly increasing. The effects are adverse than we could even think and they are long termed/ lived. The cheap wine could have health consequences too. The sulfites present in the wine can degrade person’s health. The cheap wine has much higher sulfur content than expensive organic wines. The consumption of this cheap wine could results in allergies, breathing problems, skin rashes, itches and nausea. Overindulgence of wine can raise the blood pressure which could be harmful.

In the recent years, the genetically engineering wine production is on the rise. It is the method of wine production using the gene altered grapes. The genetically engineered vineyards are more resistant to the fungal diseases than the traditional vineyards. The main motive behind the genetical engineering is to make vineyards more resistant to diseases and increase the output of grapes. The researched concluded that these disease resistant plants would need very less pesticides, thus lowering the use of pesticide in production process.

This is really beneficial for the environment. But it is feared that the genetically altered genes may result in uniformity of taste of different wines. But according to the reports; people have not accepted the genetically engineered wine. They have rejected the concept of genetically engineered wine as the fears of taste uniformity have raised concerns. According to the report by Greenpeace, California wine makers may have to face mass consumer rejection if they accepted the genetically engineered grapes for their wine production process.

British retailers have also threatened California wine makers to quit importing their wine if they adopted the genetically engineered wine making process. Fact is that, Britain is the largest importer of California wine as it imports 30% of the state’s wine. Researchers have found out that the gene which is inserted into the wine grapes create a protein similar to that present in the bee venom. This could cause anaphylactic shock in some people and can also create other health issues. This deadly substance could not be put out the production process of the genetically engineered wine.

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