The Importance of Business Ethics and Accounting Ethics Education - Case Study Example

The Importance of Business Ethics and Accounting Ethics Education Introduction As the business environment becomes more complex and competitive, business owners are taking significant measures to ensure that they not only survive but also thrive in their respective niches. Most of them are exploring markets that have remained untouched for a long time. Yet others are simply improving on the quality of the products that they offer to the market. Increasingly, these and other strategies have made them to improve and sustain optimal productivity. However, some measures that are being taken in a bid to attain this goal have far reaching moral as well as legal implications. One of the emerging trends which has raised various controversies pertains to the issue of price gouging. It is against this background that this paper provides an in depth evaluation of the price gouging in light of the Joshua Thompsons case study. To ensure a coherent analysis, it begins by analyzing the case study. Then, it proceeds to reviewing the respective study in light of the moral as well as legal implications. In the recent past, it cannot be disputed that the movie industry has raised the prices of drinks and snacks. Such prices are simply outrageous and have adversely affected the welfare of consumers. In the first case study, Thompson feels that the prices of the snacks are outrageous and decides to seek legal help. This happened when the movie theater, to which he was an avid goer, announced that clients were no longer needed to bring with them snacks. Previously, he had carried his snacks in a bid to avoid the then exorbitant prices. He then decided to file a law suit in court to address the issue. Thompson’s decision in this regard was based on the need to protect the other consumers from the unethical practices of movie theater owners. His argument was based on the provisions of the Michigan Consumer Protection Act, a state statute that seeks to curb price gouging and protect the holistic welfare of the consumers1. His lawyers demanded that the particular movie owners compensate all the consumers whose rights had been violated in this regard. This decision has been surrounded by various contentions. In his research, Arnold notes that some of the experts argue that the practice of price gouging is within the legal limits2. In this regard, they argue that the movie owners are exempted from this price gouging statute because of the fact that they are not regulated by the state. Recent researches ascertain that indeed, the movie owners have hiked the price of snacks at the expense of the consumers3. Seemingly, the consumers are expected to pay up to four or five times more than what they would find in the normal market place. In defense of their actions, the movie owners argue that the price that they pay for sustenance of their business is high. The running costs from their point of view are extremely high and thus they need to devise viable ways to address the issue. However, Adkins and Radtke assert that the prices that the movie owners charge are exorbitantly high4. In this respect, the movie owners make a significant 85% profit from the charges of food and drinks. This is on the higher side and has diverse moral and legal implications. In his research, Berrman indicates that the moral aspects of price gouging are very complex5. In this respect, it is worth acknowledging that ethics and morals have undergone developments over time especially with regard to perceptions. Literarily, they have evolved and are currently perceived differently by the society. At this point in time, it is worth appreciating that as social contexts change, so do the social contracts and relative behaviors. Essentially, the rules, norms and regulations that govern the respective behaviors also change over time. Social scientists agree that civilization has had a significant impact on the holistic wellbeing of the society. In particular, it has impacted significantly on the social values and virtues that the society holds in high regard. It is widely agreed that current social conditions have led to the erosion of values that were initially considered critical for social survival. In return, this has ingrained a state of laxity in the society and currently, most social behaviors are centered on individual selfish interests. Also worth acknowledging is the impact of economic costs on the welfare of the society. The soaring costs have made it difficult for individuals in the business sphere to put up with the trends. Competition has increased to high levels and increasingly, stakeholders in this sector are finding the moral values and ethical rules constraining. Conversely, opportunists are taking this chance to reap and enjoy easy profits6. This is because their behaviors are free of the ethical and moral rules that are considered constraining. The preceding state of affairs directly defines the current behavior of the movie owners in Michigan. They are opportunists taking the chance and defying ethical rules and regulations in a bid to reap huge profits from their businesses. Since minimal efforts have been undertaken in the past to curb the behavior, the respective business persons have been persistent. At this point, it is certain that the behavior has been tolerated by the compromising social rules. To a great extent, the society needs to be blamed for not curbing this during its early stages. In particular, the consumers need to take responsibility for failing to take the required action during the initial stages. Thompson’s effort on the other hand needs to be supported and encouraged. This is because it is within the moral and ethical provisions that guide and check human behavior. From a utilitarian point of view, philosophers assert that an activity or a behavior is morally acceptable if the implications have positive impacts on the affected individuals. Thus behavior and activities whose outcomes have negative impacts on humans is socially unacceptable. Agle, Donaldson and Freeman ascertain that exploitation of consumers by business owners is socially as well as legally unacceptable7. It is the responsibility of the relevant authorities to check the behavior and ensure that the welfare of the consumers in this case is taken into consideration. This type of price gouging is referred to as predatory gouging. According to Abrams, this occurs when the business owners consistently extract money from the consumers in excess of the industry standards8. The profits that are being made by the movie owners imply that the money they are extracting from the consumers is indeed far in excess of market rates. Seemingly, their behavior is well defined by the Darwinian Ethics regarding the tooth and claw principles. This principle postulates that getting caught in the act of doing wrong is the sole moral prohibition that influences human behavior. Since the movie owners have never been questioned in the past, it is unlikely that they would have ceased the practice. Thompson’s decision at this point in time can therefore be considered to be timely. If well implemented, it can go a long way in addressing the relative issues that have compounded the industry. Certainly, the practice is immoral and needs to be addressed accordingly. The Michigan Consumer Protection Act has its roots in the 1914’s Federal Trade Commission Act. The Act seeks to cushion the consumer against the negative implications of the business malpractices that are propagated by the business persons. Essentially, it prohibits deceptive business practices and unfair competition. In total, the Act prohibits a significant twenty nine unconscionable, deceptive and unfair trade practices. Specific acts, practices and methods are well defined by the Act. This Act applies to all individuals, commerce or trade and does not have specific provisions for a particular industry. To this effect, Trevino and Nelson cite that the Act has gaps that need to be bridged in a bid to make it more effective9. In light of Thompson’s case, bridging the inherent gaps can be important in making the act more effective. From De George’s point of view, it is instrumental in checking the behavior of the over ambitious businessmen10. It is also important in determining whether the conduct of the seller in given circumstances is unlawful. If the behavior under any circumstance is found to be unlawful, the respective person is supposed to be taken to court and charged accordingly. Certainly, the behavior of the movie owners in Michigan is unbecoming. Thompson’s decision to go to court is legal. It is grounded on the provisions of the law and as well as the moral values. Ultimately, this would go a long way in enhancing the wellbeing of the entire population. In essence, it would increase the degree of happiness of the populations that have suffered in the hands of the movie owners11. Conclusion In sum, the business environment is compounded by various moral and ethical issues. In order to enhance sustainability, the moral concerns need to be addressed in a timely and effective manner. Currently, the consumers of the movie industry are grappling with the effects of the exorbitant prices being charged by the movie owners. This has made specific individuals such as Thompson to take a legal action in an effort to safeguard his wellbeing as well as the wellbeing of the consumer community. As it has come out from the study, the movie owners charge high prices for food and drinks. Further, they do not allow the consumers to carry their own snacks to the movie houses. As aforementioned, the economic pressure and increased competition influence the business owners to make immoral decisions. In particular, this has made them to hike prices in an effort to make profits. The immoral acts contravene the provisions of the Michigan Consumer Protection Act that seeks to protect the rights of the consumers. Nonetheless, this Act is compounded by certain inconsistencies that need to be addressed in order for it to yield optimal outcomes. Works Cited Abrams John. Conscious growth. Business Ethics, 18.2 (2004): 9-11. Print. Adkins, Nell and Radtke Robin. Students and faculty members perceptions of the importance of the importance of business ethics and accounting ethics education: Is there an expectations gap? Journal of Business Ethics, 51.3 (2004): 279-300. Print. Agle Bradley and Van Buren Harry. God and Mammon. Business Ethics Quarterly 9.4 (1999): 563-582. Print. Agle Bradley, Donaldson Thomas and Freeman Edward. Dialogue: Toward superior stakeholder theory. Business Ethics Quarterly, 18.2 (2008): 153-157. Print. Alas Ruth and Tafel Kulliki. Conceptualizing the dynamics of social responsibility: Evidence from a case study of Estonia. Journal of Business Ethics, 81.2 (2008): 371-385. Print. Arnold, Dennis. The rights of employees. Business Ethics Quarterly, 16.3 (2006): 415-418. Print. Berrman Jack. Adequacy of international codes of behavior. Journal of Business Ethics, 31.1(2001): 51-64. Print De George Richard. Business ethics. USA: Prentice Hall, 1999. Print. Liuzzo Anthony. Essentials of business law. USA: Career Education, 2009. Print. Trevino Linda and Nelson Katherine. Managing business ethics. USA: Wiley, 2010. Print. Read More