Business ethics Essay Example for Free

Business ethics Essay -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 â€Å"rightness† or â€Å"goodness† of ones 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 â€Å"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 â€Å"right thing to do† – but because of the image enhancement which this may produce, in view of societys increased demand for ethical conduct in the business sphere. A positive company image creates what is known in the literature as â€Å"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 â€Å"moral person† is one of good will, who makes ethical decisions based on â€Å"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 â€Å"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 companys 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 organizations 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 companys 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 companys 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.