Business Ethics - Ethical Theories and Their Application in Business - Case Study Example

Business Ethics - Ethical Theories and Their Application in Business   Part 1: Some convincing ethical theories and their application in business Business Ethics is the study of business circumstances, actions and resolutions where subject matters of right or wrong are dealt with (Crane and Matten, 2007, p.5).  In our daily lives, we incessantly come about against circumstances where principles are in conflict and where we have to make a selection what is right or wrong. In a business framework, situations are much more intricate. In a business situation, there is often a requirement for the decisions to be based on a methodical, balanced, and widely comprehensible argument so that they can be sufficiently safeguarded, justified and explained to appropriate stakeholders. Likewise, if we consider that an organization has done wrong, we need some real basis from which to argue our situation. This is when normative moral theories come into play. Normative moral theories suggest proper way of acting ethically. Richard De George proposes 2 extreme points for locating a place for moral theory. One is ethical absolutism. This asserts that there are everlasting, universally acknowledged ethical principles (Crane and Matten, 2007, p. 86). According to this view, right and wrong are objective characters that can be realistically determined. The other one is ethical relativism, which claims that ethics is context-reliant and subjective. The concept of relativism arises in global business issues, where it is debated that a moral decision about behavior is another culture that cannot be formed from outside. It is because ethics is culturally determined (Crane and Matten, 2007, p. 87).  Most conventional ethical theories tend to be absolutist in nature. They seek to embark on universal rules that can be useful in any circumstances to provide the answer as to what is correct or incorrect. Contemporary moral theories often are inclined towards a more relativistic place. Thus, in making effectual decisions in business, both these points are not mainly useful. Pluralism is a kind of a situation, which appears in between absolutism and relativism. It accepts ethical convictions and backdrops while simultaneously proposing that an agreement on basic values in a certain social background can be arrived at. In making good business decisions, we need to appreciate this range of viewpoints so as to establish an agreement on the solution to moral problems (Crane and Matten, 2007, p. 87). There are other certain theories like consequentialist and non-consequentialist theories. The former is based on the proposed outcomes, which governs the actions. The latter is based on the moral decision on fundamental principles of the decision maker’s inspiration. Consequentialist theories are of two types- egoism and utilitarianism (Crane and Matten, 2007, p. 91). Egoism is one of the oldest theoretical ideas. The validation for egoism lies in the basic concept of man (Crane and Matten, 2007, p. 93). Alternatively, utilitarianism is based on single act and ethical judgment. The non-consequentialist theories incorporate ethics of duties and ethics of rights and justice (Crane and Matten, 2007, p. 97). How ethical theories help in solving dilemmas at work? In trying to make ethics quantifiable, one may accept the action-based approach to moral theory, where the hypothesis tells us how we should respond to ethical dilemmas. The moral theories are useful in deciding the ethical dilemmas. Investors review an investment as valuable or not, based on its anticipated return. If the actual return is less than/more than the investor’s anticipation, then it is believed to be a good investment decision. Likewise, ethical goodness or badness is based on the results of the moral decision. Morally good decisions cause positive endings whereas morally bad decisions bring about either less positive or negative effects (Brooks and Dunn, 2009, p. 149). Thus the concept of consequential theory of business ethics is most acceptable to me especially in the business decision-making.  My own experience and ethical theory application I have faced a similar situation at my workplace where I was placed as an intern in a globally located KPO (Knowledge Process Outsourcing) organization. Here my job was that of a team leader. I often faced dilemmas when my team members some of whom were my closest friends, asked me for a permission to leave early and send me the work later in the night from his home. My organizational responsibilities did not permit me to let them go but the problems, though personal, were genuine. Sometimes I had to adjust and I did because I took my decision based on the expected consequence. All of them were very efficient and I knew they would give me the work for sure by the night. The project finally ended well, thanks to all of them. The consequentialist approach gave me the right direction in my decision-making and the final desirable outcome. Part 2: The critical incident at my workplace The altering nature of the place of work is driving ethics training to institutional priority. The work force of recent times is composed of individuals who are more different in terms of ethnic group, traditions, religious conviction, age, education, and socioeconomic status. These individuals enter the work force with contradictory backgrounds, principles, objectives, and opinions of acceptable behaviors. Lots of them have career anticipations that will be hard, if not unattainable, to realize in today's world. This varied, multicultural group of personnel is being asked to work together with a spirit of collaboration and reverence for the good of the organization as well as the clients it serves. Conversely, on the job, personnel face decisions that have insinuations for their job protection, their remunerations, and the achievement of their organization. Some decisions are taken which bring pressures on them to defend their own benefits, sometimes at the risk of losing their individual and corporate honor. There is more pressure on individuals in corporations and people tend to adapt to the changes very rapidly. People tend to react to that pressure by cutting corners or engaging in maneuver (Lankard, 1991).  Now, I am going to discuss an incident, which revolves around ethical dilemma and is related to ethical theory. I have been working in a multinational corporation, which is located in London. The domain in which I am working is Knowledge Process Outsourcing (KPO). I have been working in this organization for over one and half years. The kind of incident, which has taken place, was because of feeling of resentment and suspicion. The incident occurred nearly one year ago. One of the senior colleagues of mine asked me to keep a track on the websites which one of my junior colleagues used to surf. According to my senior, my junior colleague spends too much time on surfing the Internet. He told me that my junior sometimes visits the social networking sites, which are not allowed to be accessed in an organization. He had even seen him accessing some indecent sites. I was asked to keep an eye on all the e-mail, websites and download from his computer. I was in an ethical dilemma whether to poke into the privacy of my colleague as this is against the work ethics. I was thinking of seeking opinion from the corporate counsel. Then I thought of going through the employee guidelines and decided to seek for advice from the top-level managers in our organization. This implies that a situation which compels someone to choose between ethics and the orders. However this was also a chance for me to gain special favor of my senior. In an organization, I am not supposed to interfere into the private matters of anyone. However, I was forced to do so by my senior. The Dilemma of Knowledge Power is another dilemma that was faced by me. Owing to my capability, position and status, everyone in my organization considers me as a source of appropriate information. However, I can withhold some correct information and can create false impression to those individuals who have faith in me. Thus, I could have provided wrong information to my senior about my junior even after knowing that he is addicted to wrong websites. The Dilemma of Subordination entrapped me. I was bound to do whatever I was told to do by my superior. I knew that I might be doing something wrong. I was going against the company policy. On the other hand, if I fail to obey the instruction of my senior, then I will be penalized. I was in a dilemma of responsibility- whether to listen to whatever I was told to do or try to come out of that problem. At the beginning, I thought of refusing my senior to carry out his instructions. It is because this incident might give rise to several controversies within the office. I was in a dilemma of a flawed system. I was finding my senior contending against my wishes. I did not want to interfere in the personal matter of my junior. I was in a dilemma of values conflict. I was thinking whether to go against my senior or to decide on the grounds of ethical principle and business judgment (Andrews, 2000, p. 73).  Reflection on my decision After that, I thought of strategically handling this situation. I told my senior that it would be wrong to interfere and interrupt into the desk and the privacy of my junior. This will be against the company policy. If we all were to work harmoniously in an organization, then we were not supposed to do those things. I suggested him to discuss this directly with my junior. I knew that my junior had the capability to be a part of this organization. He sat next to my desk and I often found him working seriously. Besides this was just a strong doubt and if it was proven wrong after interference into his privacy then the matters will be worse for us. So, I thought of taking decision on my own to make my senior understand that he had some kind of wrong impression about that colleague.  I wanted to make sure that the interests of the organization are protected.  I made up my mind that if my senior were not convinced, then I would approach to the top-level management of our company. Why I did the right thing A company needs to set clear guidelines for everyone. The rewards and the punishments should be equally and fairly distributed to all the employees of an organization. Any senior employee should not think that any rule is not applied to him or her. (Andrews, 2000, p. 74) Rules should be same for all the employees working within an organization. If this goes on, then the organization will be affected in an adverse way. Thus, we need to defend the values of an organization. Following consequentialist approach it would have been correct perhaps to track the sites and the suspected person’s computer because all was to arrive at a positive outcome. But once again it was only a doubt and in that case everyone’s machines needed a thorough check. I even suspected that my senior might be having some personal grudge against the boy whom he wanted me to track. I therefore thought of listening carefully to my senior whatever he was trying to say against my junior. After that, I succeeded in convincing my senior to inform this matter to the higher-level managers. Then the company took the decision of tracking down the sites that all of the employees were accessing. They found that a majority of the employees visit the networking sites. Necessary steps were hence taken to prevent this.   How such issues should be tackled in future? Such issues should be handled in a similar fashion as it occurred in my case. Every member of the management should ensure that no one’s dignity is hurt in the process of decision-making and any rule should be applicable for all. As far as seniors are concerned, they should also ensure that personal grudges should not be taken out through unethical actions. Relation to ethical theory The theory of consequentialism is applicable here because every right action will have a right outcome and vice versa. So in this case, if I had fallen prey to subordination dilemma then the outcome might not have been so perfect and ethically right. One needs to think about the expected possibilities of outcome and choose only that action which will certainly lead to positive outcome for the organisation. Part 3: Initial mindset before starting the course Business ethics in general provide a realistic guide to help proprietors and managers in meeting rising international standards and anticipations for an effectual business ethics program. Such a step-by-step channel should have immense utility in the rising market economies encompass the earth. Many are new players in the modern international economy. They lack experience to function professionally and to deliver the jobs, goods, services, customer choices, and common prosperity that are anticipated from democratic capitalism. Even developed market economies, in addition, are looking for better means to meet market confrontations. A basic component of any flourishing market economy is respect towards fundamental human principles, namely, integrity, faith, and equality. These principles must become an essential element of business society and practice for markets to stay free and to work efficiently (Business Ethics, n.d., p. iii). At the beginning of the course I had a background in my mind against which I wanted to learn the ethical of business. I wanted to establish that link between theory and practice as I learn. How has the course changed my outlook? Has it change din a substantial manner? Ethical issues are often strategic matters in disguise. The organization, at first, needs to recognize that its workers often face ethical dilemmas. Thus, it is the duty of an organization to offer strategy and support to curtail misunderstanding about organizational anticipations. Ethical negotiation often has inducing short-term advantages but always has long-term results-either private or organizational. The organization should intentionally fire those employees who do not abide by the ethics and morality of an organization. Only abiding by the rules and the laws does not ensure ethical behavior. There may be several other organizations, which strictly follow the ethical rules and regulations. Thus, an organization needs to respect its individual principles and the ethics of the employees. Similarly, it is the liability of every worker to protect organizational and communal well being (Andrews, 2000, p. 74-75). My views have not altered much because I was by my conscience always ethical or at least tried to be ethical rather than following rule sand orders blindly. However studying these theories helped in convincing me about the right action and justified decision. How ethical should the workplace be? Business ethics relate to human communications, which occur during the life cycle of manufactured goods or services and the associations between management and the stakeholders and community. It has been hypothesized that inquiry into ethics is exclusively based on the valuable or harmful consequences of the behavior itself, that is, utilitarianism. This is a theory of utility, which affirms that individuals have to act only to support the net expected utility for the widest society. This utility is influenced by their actions. Some eminent authors define unprincipled behavior based on the theory of utilitarianism as actions, which have damaging impacts on others. These actions may also be illegitimate or not tolerable by the larger community. The moral decision making procedure occupies moral consciousness or ethical sensitivity. This leads to ethical judgment, ethical inspiration and ethical character. This procedure is difficult to perform in an organizational situation where communal harmony and the outcome of effects profoundly influence employees. Ethics are developed to suit specific circumstances. The core principles are lost in the efforts for economic deliverance. Workers within organizations depend on each other for moral indications. However, a worker is more concerned with incorporating himself with the organization to advance instead of practicing their internal core principles. Thus moral indications are vague, and people are not eager to take responsibility for their acts, so as to avoid blame. Basically, the bureaucratic principles are formed by the classifications of success and failures within the organizational community where people have to assume a character, which is supported with the corporate principles. It is obvious that an individual must be connected to his core principles so as to find the way through the ethical maze. It is vital to apply self-reflection and self-inquiry to distinguish moral dilemmas and be able to recognize the individual and communal ethics, which are held significant by each employee (Kamal, 2006).  Several authors propose that it is probable for organizations to incorporate personal values to produce a set of shared principles, which would act as an ethical compass, both in household and international settings. This requires moral leadership since an ethical setting must be produced in organizations to uphold moral behavior. This can be achieved by setting up a culture that exceeds beyond conforming to legal processes alone. Good business ethics are not only favored from an ethical standpoint but are an indispensable provider to survive in an international economy. They enhance the end result. Scholars have found experiential support that communal responsibility and corporate economic performance are not essentially trade-offs. They must, in reality, coexist for an organization's achievement. There is a need for honesty in business deals and decisions. If that trust is acutely violated, the lives of many individuals may be negatively affected by the lack of honesty. These assurances have a clear active role in preventing dishonesty, financial frivolity and underhand transactions. Eventually, businesses must meet the sine qua non. As businesses begin to appreciate the association between good business ethics and their outcome, they will put greater stress on combined act to address community's concerns. Corporate responsibility at this stage covers innumerable communal issues and reaches beyond domestic boundaries. There has been a recent drift for corporations to put into practice business social initiatives to remain cutthroat despite increased superiority of the moral markets around the globe. Improved competition in the course of trade liberalization and the extension of Internet technology has driven corporations to highlight on establishing their reputation assets. The underlying principle is to achieve competitive advantage. Therefore, it is essential to have the clear idea about good business ethics so as to survive and be unbeaten today and particularly in the future (Kamal, 2006). How has the course changed my opinion about business ethics? Thus, all the employees of any organizational structure need to undergo business ethics training program so as work in an ethical and moral way. Ethics should be taught both to the adults as well as children. Personal ideals are generally set in youth. Families, educational institutions, churches, and peers delicately guide toddlers as they mature. However, the rationale of business ethics training is not so much to transform adults. Rather, this training is based on supporting, admonishing, or strengthening the understanding of the adults. They should be made aware of the organization’s obligation to enforcing its principles, processes, and anticipations (Business Ethics, n.d., p. 159). My opinions about business ethics have changed to some extent although I was impulsively ethical at my workplace. However the existence of such strong theories and ethical foundations in the business scenario have instilled in me an inspiration to not only incorporate these within myself but also train other about these approaches.               References:  1. Crane, A, Matten, D, 2007. Business ethics: managing corporate citizenship and sustainability in the age of globalization. Oxford University Press (Oxford). 2. Anderson, M, Anderson, S.L, n.d. “Computing an Ethical Theory with Multiple Prima Facie Duties”. Available at: http://ethicalife.dynalias.org/andersons.pdf. (Accessed on Nov. 3, 2009). 3. http://worldroom.tamu.edu/Workshops/CommOfRespect07/MoralDilemmas/Ethical%20Decision%20Making%20in%20Organizations.pdf 4. Brooks, L.J, Dunn, P, 2009. Business & Professional Ethics for Directors, Executives & Accountants. Cengage Learning (Connecticut). 5. Lankard, B.A, 1991. “Resolving Ethical Dilemmas in the Workplace: A New Focus for Career Development”. ERIC Digest No. 112. Available at: http://www.ericdigests.org/pre-9220/focus.htm (Accessed on Nov. 3, 2009). 6. Andrews, W.A, 2000. “Identifying, Resolving, and Managing Common Ethical Dilemmas in the Workplace: An Experiential Approach”. Developments in Business Simulation & Experiential Learning, Volume 27. Available at: http://sbaweb.wayne.edu/~absel/bkl/vol27/27ao.pdf (Accessed on Nov. 7, 2009). 7. Kamal, F, June 15, 2006. “Business Ethics Needed More than Ever”. Indus Business Journal. Available at: http://www.indusbusinessjournal.com/ME2/Audiences/dirmod.asp?sid=&nm=&type=Publishing&mod=Publications%3A%3AArticle&mid=8F3A7027421841978F18BE895F87F791&tier=4&id=C0BFB2B575A14328A812D7A8DEAB15B0&AudID=2A49137C8BBB4CAB9F23C2A2692E1395 (Accessed on Nov. 7, 2009). 8. “Business Ethics”, n.d. U.S. Department of Commerce. Available at: http://www.trade.gov/goodgovernance/adobe/bem_manual.pdf (Accessed on Nov. 7, 2009). Read More