The role of ethics and values in modern American business - Essay Example

Business ethics is a form of professional ethics that scrutinizes ethical principles, and ethical and moral problems that arise in the business environment (Wooliscroft, 2006). Business ethics applies to all sections of business conduct and it is pertinent to the conduct of organizations and individuals. Business ethics is an important code that all business organizations stick to (Boardman, Sandomir, & Sondak, 2013). According to Koslowski (2000), business ethics reflects the philosophy of a business.

The main aim of business philosophy is to determine the fundamental purposes of a company. If an organization’s objective is to maximize shareholder returns, then sacrificing profit to other concerns is a violation of the firm’s fiduciary responsibility. In the 21st century, business ethics is neither a luxury nor an option (Wooliscroft, 2006). Firms with strong ethic programs have realized that these efforts can reduce potential costly fines, improve reputation, decrease vulnerability, provide access to capital, positively affect their employee’s commitment to work, enhance customer loyalty, and favorably influence their bottom line.

In the USA, companies and their employees are required to comply with national, local and international laws governing their operations. It is for the benefit of the company, in most cases, to comply with these standards (Rendtorff, 2009). Failure to conform to the standards may cost the company in terms of resources, time, brand image, and customer and employee loyalty. Additionally, the development of strong ethics standards can eliminate the fines resulting from fraudulent, wrongful, illegal or discriminatory activities (Wooliscroft, 2006).

In the USA and the wider global business environment, corporate entities are largely considered as persons. The corporate entities are legally entitled to the liabilities and rights due to citizens as persons. Ethics has become an organization priority. Following the revisions of the USA Sentencing Guidelines, firms developing “good corporate citizenship” activities can, to a large extent, reduce potential penalties when delinquency occurs (Walton & Duska, 1998). Just as any other country, the USA government emphasizes the need for businesses to embrace proper business ethics in the country’s business environment (Wooliscroft, 2006).

If a company in the USA does not adhere to business ethics, as stipulated by the Society for Business Ethics, they become vulnerable to fines. Many companies have broken ethical, anti-trust and environmental laws and received fines worth millions. However, it is worth noting that the amount of profits made by these firms overweighs the fines applied. For instance, popular soft drinks and fast food restaurants have been subjected to fines over and over again for unethical behavior (Wooliscroft, 2006).

Many people argue that business ethics only asserts the obvious and so many people do not take business ethics with a lot of seriousness (Rendtorff, 2009). For many U.S citizens, the principles of the obvious can go right out during times of stress. This is just one of the benefits of business ethics in the workplace. As firms enhance or develop their overseas operations, empower their employees and decentralize their business functions, it is essential for them to develop necessary strategies to ensure that their workforce throughout the globe can make ethical decisions.

This ensures that a company’s profitability, brand image and management are not affected due to vulnerability to misconduct (Walton & Duska, 1998). Quite a number of ethics awards and media lists on corporate reputation have been developed in the USA. For example, Better Business Bureau Torch Award for Marketplace Ethics, American Business Ethics Awards, and Business Ethics “100 Best Corporate Citizens” consider a variety of ethical principles for determining the firm’s ranking and performance in the USA business environment (Rendtorff, 2009).

Business ranking is an important factor for any business organization; therefore, every company will do what it can to be rank among the best. More than simply a legal or moral responsibility, business ethics needs to become an organizational priority (Walton & Duska, 1998). The Social Investment Forum of 1997 reports that over $1 trillion in assets is under management in the USA in portfolios that use screens linked to the business environment, ethics and corporate social responsibility. This figure is more than the 1995 one that was valued at $639 billion (Walton & Duska, 1998).

Considering these figures, it is a clear indication that companies addressing social, ethical and environmental responsibilities in the USA have increasing access to capital that has not otherwise been available. A survey conducted by Walker Information in 1997 revealed that 42% of employees accept that ethical integrity directly influences their decisions to work for a company (Boardman et al., 2013). Many companies in the USA are well informed about the importance of ethics in their cultural fabric.

However, much still needs to be done in regards to ethical behavior among business societies. USA companies must see ethics as a social responsibility to which they are obligated. Secondly, ethics will only find its place in a firm that makes it its first priority (Walton & Duska, 1998). This can be done through the creation of relational expectations that work for the benefit of everyone. By creating a value-based culture within a company, the society in general can improve through positive influences that bring about outside the organization.

References Boardman, C. M., Sandomir, A. N., & Sondak, H. (2013). Foundations of business thought. Boston: Pearson. Koslowski, P. (2000). Contemporary economic ethics and business ethics. Berlin [u.a.]: Springer. Rendtorff, J. D. (2009). Responsibility, ethics, and legitimacy of corporations. Frederiksberg, Denmark: Copenhagen Business School Press. Walton, C. C., & Duska, R. F. (1998). Education, leadership, and business ethics: Essays on the work of Clarence Walton. Dordrecht: Kluwer Academic Publishers.

Wooliscroft, B. (2006). A twenty-first century guide to Aldersonian marketing thought. Boston [u.a.]: Springer.