Ethics in Business: Meta-Ethical Issue and Ethical Behaviours of the Workforce and the Managers - Term Paper Example

Running Head: ETHICS IN BUSINESS Ethics in Business Ethics according to Milton S, Robert A and James H (2001:15) is defined as a discipline that involves investigation into the moral judgments people make and the rules and principles on which such judgments are based. Ethics in business on the other hand is the act of a business or business employees to follow to the letter certain basic moral principles when transacting with their customers. The ethics are mainly morals understood by many if not all globally and are meant to not only promote public image of the business or company and its owners, but also improve the customer’s (human) welfare or well-being. It is agreeable to say that by conviction and not through interest, we should treat others the very same way we would want them to treat us (Cory 2004:1). When adhered to, such moral values enhance the performance and profitability of the firm since it attracts and maintains customers together with their trust in the products or services offered by the business. The companies’ basic moral principles according to Cory (2004:2) “…are honesty, acting in good faith and in an equitable and just manner without betraying the trust of the stakeholders and by treating them as equals, practicing reciprocity, avoiding the exploitation of others, and acting from your own free will without forcing your will on your partners”. It is virtues like honesty and acting in good faith that in our case study we see Steffan, in his capacity as the project manager violating deliberately. There is need for business to develop and faithfully practice these moral values for purposes of well societal being. Unfortunately they fail to do that. Incidentally it is the managers and the CEOs who often are accused of violation of core values of the society like in the case of Steffan Larson who disregards Lauren’s advice. They are usually morally blind and instead throw their focus on profit making. This is largely so because of shareholders’ pressure for profit generation and the capitalistic economic arena in which they operate. But this notion is disputable since even in non-profit making organizations there is open deviation from set rules and regulation. They therefore do business without caring about people’s lives, the environmental, political, social, and moral values. International corporations also want to be exempted from certain core values of a given place if in their view the values will conflict with their set objects, a theory Bowie (2002:3) calls relativism. He says that the international corporations want to know if they should do in Rome as the Romans do before they can start a business. In the business, several ethical issues emerge. Those major ethical issues we are going to observe, however, are fourfold. First, there is the meta-ethical issue. It regards the appropriateness of using the moral language to some other entities other than to human beings, for example corporate structures, economic systems (capitalism or socialism) and corporations. It is necessary to evaluate this ethical aspect of the business in relation to profit making or at large customer attraction and or retention. The ethic here is more discipline oriented. It views business from the perspective of a given discipline such as management, accounting, economics, law, marketing and finance (Frederick 2002: xv). Then there is this issue of ethical behaviours on both the workforce and the managers. There is a great room for check on how corporations can be structured to instill ethical behaviours on the managers as well as the workers. Thirdly, there is the issue of unethical behaviours of larger corporations regarding matters of price control and most importantly their constant dishonour of the social contract with the community. Economic actor that tries to discern its ethical duties without recognizing the social contracts in the communities it impacts can fall a victim to moral myopia (Donaldson & Dunfee 1999: 8). Finally there is the issue of the morality of very particular practices, to the responsibility of corporations with respect to consumers and the public, environmental degradation, rights of workers, product safety etc. All these amounts to the ethical issues that any established business or company must not only observe, but also adhere to with regard to their signed social contracts with communities. Disregard of any single ethics amongst these mentioned above could be disastrous to a company or business and its products in the public domain. For instance, according to Donaldson and Dunfee (1999:6) the Shell Company conspired with the tyrannical government of the republic of Nigeria to produce oil against the will and the wish of the people and the end result was in disfavour of the company’s performance internationally. It was treated as a breach of social contract with the communities and there was unforeseen international withdrawal by the people from using their products. The damage was quite enormous that their damage control department (public relations department) could not rescue the company’s image. Their managers had later to gather and call upon other stakeholders like academicians, religious leaders, opinion formers etc to build a truce. This explains how important it is for businesses to have and strictly follow their ethical values for purposes of fairness and respect to all and not just execution of the said moral values and principles only when it is convenient to them. According to Cory (2004:2) the companies operation is not amoral and their main mission is not to maximize their profit without infringing into the law. That often they only adhere to their own set and established moral principles when to them it is highly convenient and favourable. In his article Business and Ethics, Daryl Koehn (1996, vol. 6: 1) disagrees with an economist, Milton Friedman who suggests that the business’ sole social responsibility is to maximize profit as long as they observe the rules of the game and that there prevail an open and free competition without fraud or deception. Koehn disputes such parochial views and considers Friedman’s position as not only naïve, but also dangerous. As a result of all these hints, it is almost a consensus among the general public that companies are bound to defy the social contracts hence a need to curb or at least reduce extreme and unfortunate incidences of human rights or even environmental violation. The remedies that are applicable in case a company disregards these fundamental ethical values do exist but their implementation might experience an uphill task since they are predominantly radical or so they are widely considered. They are Internet, Ethical Funds, Activists Associations, Whistle –Blowers and introduction of ethics course in the university. The public may take them in bad faith especially when they are perceived to favour the companies. And since they are mainly propagated by the associations or organizations, the organizations involved in such activities could risk their public repute and largely considered a traitor in wider public domain. Their future activities may be in danger even if such activities will be for the public good. In most cases they are associated with violence hence treated with contempt. One of the remedies is the proposed introduction of an ethics course at the universities. This will assist to broaden the humanistic education in the universities (Cory 2004:3). He further observes that the astronomical sums of remuneration to top-level businessmen and businesswomen are at the foundation of corruption. This is widely so viewed since it is largely considered that there is only a very thin partition between corruption and ethics. Usually it is the holy alliance between the executives of the companies and the majority shareholders that propagate the unethical behaviours. It is largely so considered since it is them who appoint and remunerate the so-called CEOs and or managers. It is also suggested that technological advancement could make a perfect intervention in checking public exploitation by the unscrupulous businesses or companies. For example, the emergence of the internet to some appreciable level has given minority shareholders strength. They can surf the net and get information directly on their own, mainly those who can access the services in the net since most companies presently pour a lot of information regarding their operations in their websites. This promotes transparency on their operations and reduces if not finish unethical conducts that is rampant amongst managers (Cory 2004:5). Of late there is establishment of ethical funds in the U S. This fund aids in the implementation of ethics and as a result safeguards the ethics. They keep strict ethical screening especially those of listed companies in the Stock Exchange market. The companies are screened to reflect their contribution to social, ethical, environmental, political and moral values in the society. The minority’s participation here is just to identify such companies which promote ethics in the stock exchange market and buy their shares. Those shares belonging to unethical companies are usually shunned by the minority whose moral interest is jeopardized by the activities of such firms. Whistle-blowers in their attempts to curb unethical business conducts have neither done much in terms objective achievement. They have faced several constraints. They have been victims of abuse by their companies when suspected to have volunteered information in their company’s disfavour with respect to ethical conduct and some have face severe penalties including death, isolation and even being fired from work without any form of protection. However, all these mentioned intervention measures like organizations, ethical funds, whistle-blowers, introduction of ethics course in higher learning institutions, transparency and internet have not help to drastically reduce unethical behaviours amongst the notorious companies. More new restrictive measures need to be put in place to control absolutely such backward acts. For example in his book Activist Business Ethics, Cory (2004:6) proposes for the establishment of Board of Supervision or Supervision Board as well as the National Institute of Ethics. He hints that the minority members here will actively take charge. They will be allowed to elect about 50 percent of the Board of Directors from the Board of Supervision. This will enable them to vote for either hiring or firing of the CEOs whose conducts are questionable since the Board of Supervision and the institute of Ethics will be charged with the responsibility to hire or fire the CEOs. To a recognizable level the minority shareholders will have a voice and chart their destiny. This point for strengthened institutions. An economy where institutions are given more power to check and safeguard the interests and the aspirations of the public. To shield and protect the oblivious public from open deliberate attempts of exploitation by the so-called stakeholders who in most cases are the policy makers who even wield power to formulate principles. Then there is the National Institute of Ethics whose membership will be selected and elected by the national court and their conducts verified by the same. The members must have an impeccable ethical reputation. The said members are further disallowed to participate in any active business activities neither will they be shareholders of any company so as to avoid conflicting interests? Cory (2004:6) hints that the Institute of Ethics will be charged with the responsibility of establishing the ethics and by extension ethically rate companies. This make people evade investing in the poorly ethically rated company hence obliged strict adherence to set ethical standards by such companies. It is highly believed that with these additional measures, there is likelihood of improving business’ keen observation of the moral values in their daily dealings with the world. However, these listed measures still are subject to some further constraints. Some of the limitations that face achieving business arena where there is no moral violations include the laws of the society and at large the apparent impossible general ethical tenet in favour of honest dealing. The latter appears impossible to practice in the entire general public while the former tend to conflict with ethical requirements. Laws do not necessarily safeguard the societal moral values. The main players in the business field include but not limited to, majority and minority shareholders, stakeholders and the management. The stakeholders play a pivotal role in the smooth running of the business and in this respect include press, the law, the boards of directors, the SEC, society, independent directors, auditors, analysts, clients, employees, shareholders, suppliers, community, underwriters, nation or even the world (Cory 2004:9). Care must be taken especially by companies since the activities of these stakeholders could cause irreparable damage to the business’ public opinion. For example, if any ethical violation is committed by a company and the press brings the same to public domain it will be perceived in bad faith by the people who consequently will withdraw their association with such business even if the occurrence was accidental and that the press did not exaggerate. It is not only the press that is the most important of all, but their significance is of equal degree. They rate equally in terms of effectiveness to check companies or how a company’s operations affect all of them hence should be treated in same accord. There is an urgent need for the entire society to drop the economic classical way of thinking that merely narrow business to profit making as largely portrayed by once an economic Nobel Prize winner, Friedman. “Friedman argued that the social responsibility of business (the ethical obligation of business managers) is to seek profit for the stockbrokers” (Bowie 2002:2). The shareholders want more profit. The arena is also that of capitalism which only rewards individuals and this pressures the managers to mainly focus on profit, thereby they tend to ignore their social corporate responsibility and by extension deviate from societal norms and core values. As a matter of substitution, there is a necessity of formulating another economic theory based on moral education, communitarian values and public opinion. Another good alternative of ethics is achievable if we fail to completely overlook the utilitarian rationalization of honesty, cost effectiveness, penalties and bonuses on honesty (Cory 2004: 18). Furthermore companies should develop among their ethical standards, the concept of moral idealism. Moral idealism is defined as the degree to which individuals assume the desirable consequences can always be obtained with the correct actions (Forsyth, 1992). It coincided with the call for acting in good faith by players in the field. Vilcox, (2007:59) adds that Kant’s imperative states the action of good intention or good will is ethical. They just emphasize on honesty. These alternatives should be speedily put into practice to stop public exploitation by corrupt businesses. Since the repercussions of committing business amoral are far reaching then at all cost and time ethical standards must be observed by all. Business ethics should be practiced by conviction of their usefulness and not merely narrow and parochial application of the same at the applicant’s convenience to prevent ugly scenes. References Bowie, E. N. (2002). The Blackwell guide to business ethics. 2nd ed. Massachusetts. USA: Wiley-Blackwell. Cory, J. (2004). Activists Business Ethics. NY, NY: Spinger. Cory, J. (2005). Business ethics: the ethical revolution of minority shareholders. Springer. Donaldson, T et al. (1999). Ties that bind: A social contracts approach to the business ethics. USA: Harvard Business Press. Forsyth D, R. (1992). Judging the morality of business practices: the influence of personal moral philosophies. Journal of business ethics. 11, 461-470. Frederick, R. (2002). A companion to business ethics. UK: Wiley-Blackwell. Jennings, M. (2008). Business Ethics: Case Studies and Selected Readings. Cengage Learning. Jones, C. (2005). For business ethics .Routledge. Koehn, D. (1999). 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