Development of Theoretical Ethical Approaches - Essay Example

Topic: Lecturer: Presentation: Introduction Contemporary organisations operate in a highly competitive global environment hence need to keep up to date with current trends in the industry. In recent decades, there has been incereased awareness of ethical issues affecting organisations and their stakeholders especially consumers. This coupled with pressure for transparency and environmental impact awareness has forced organisations to embrace social values and the idea of acting in a socially responsible and ethical way. Business ethics has thus become a norm and is concerned with “moral issues and individual choices of right and wrong and values of what is good and bad in conduct of business affairs” (Needles, 2010, 299). It is about doing the right thing and embraces corporate social responsibility and ethics relating to accounting practices, marketing, human resource management and production. Ethics involves investigation into how people ought to live and in this regards, ethical theory provides a set of related ideas that explains how people ought to live. Many theories have been developed with each theory producing different rules, principles, standards, guidelines, beliefs or values that guide people how to live. These ethics are developed as people reflect on intentions and consequences of their actions. As such, these theories can be divided into deontological, teleological, utilitarianism and egoism. The ethical stance that an organisation takes impacts on all its activities and also on its wide range of stakeholders including shareholders, employees, customers, government, non governmental organisations and communities or society at large. It is therefore imperative for an organisation to make proper ethical decisions that can improve the triple bottom line of the organisation: financial, social and environmental goals. This essay will evaluate how development of ethical values and taking an ethical stance impacts business behaviour by utilising the case study of Primark a global retailer. Developmentof Theoretical Ethical Approaches Diffferent ethical perspectives have developed over time due to considerations and reflections of people on the intentions and consequences of their actions. Ethics can be divided into absolute or relative depending on the perspective one takes. Absolutists like Immanuel Kant consider actions to be universally either right or wrong or good or bad. For example, to lie, steal, or murder is wrong despite the intentions or consequences of such acts (Birsch, 2014, 107; MacIntyre, 2005). In relative terms, some actions can be considered to be right or wrong depending on the intentions of the doer or the consequences of such actions. For example, to lie is wrong but if the lie was intended to bring some good or hapiness to those concerned, then it is justified or if lying actually benefits the person to whom the lie is told, then it is justified. It all depends on whether one takes a deontological or teleological perspective (Birsch, 2014). Since ethics is derived from moral values and principles and these originate from society or traditions, this means ethics is relative. Different societies have different values and beliefs hence what is considered good in one society may be bad in another society. In this sense, ethical principles are defined by traditions, personal opinions and circumstances of present moment. This creates an ethical dilemma when one is making ethical decisions and has to make a choice which either contradicts with personal values or which one knows there is equally another choice which is right or the choice may hurt others. Business ethics was not always considered in organisations but has developed over time. Traditional organisations took the instrumental approach to business ethics and corporate social responsibility (CSR). This approach which views the sole objective of the business as to maximise profits for shareholders in provision of goods and services that meet needs of customers was influenced by economist Milton Friedman (Friedman, 1962). As such, organisations gave less importance to other stakeholders like employees, customers and the community at large. These stakeholders thus did not seem to have any vested interests in the business and if they had, then these interests were not given priority let alone being considered. During this period, there was ni separation between ownership and management as owners performed all the functions of the business including human resource and clerical duties. However, with industrialisation in the eighteenth and nineteenth century upto 1960s, businesses began taking more interest in the welfare of employees mostly due to the state welfarism prevalent in the time. In this case, companies only aimed at complying with the rules rather than taking an ethical stand as such (Juholin, 2004). Companies thus paid taxes and provided basic services such as health to employees in addition to maximising profit. In this period, employees were very loyal to employers as they provided them with jobs and their relationship was determined by contractual agreements. In the decade from 1960s, social changes began taking place in Europe giving rise to new developments in ethics. Formations of social movements that started pressurizing companies to respond to their needs and social unrest became rampant and employment relationship turned from that of loyalty to employer to an adversarial relationship (Carroll & Shabana, 2010). Old values were forgotten as ideas took center stage. This was a period when environmental awareness was realised hence dealing with environmental issues became part of organisations responsibilities. The environmental movement was demanding for more responsive environmental policies and systems which were achieved in 1990s. The decade was also dominated by civil rights issues and tensions between employers and employees as employees sought for empowerment. Women rights and consumer rights movements were also crucial in bringing about change. It was during this period that in response to ethical challenges that the companies began developing codes of conduct and value statements in addition to addressing ethical issues through legal or personnel departments (Birsch, 2014; Needle, 2010). The code of conduct is essential in companies as it gives guidelines on acceptable business behaviour and outlines the values that the organisation embraces. For example, the code of conduct forPrimark is based on the International Labour Organisation (ILO) code and entails the standards to be followed in its operations as well as the orperations of its over 600 suppliers in 16 countries and its manufacturers. The decade also witnessed the birth of social responsibility movement. The 1970s was a period marked by globalisation and growth of multinational corporations and consequently increased ethical issues and scandals. Issues such as forced labour, unsafe working conditions and practices and substandard wages were prevalent in addition to heightened environmnetal concerns (Needle, 2010). The public thus began pushing organisations to be ethically responsible leading to a period of ethical or social responsiveness. Corporations used management discretion in dealing with ethical issues although there was realisation that such efforts were beneficial to the company. It was also during this era and specifically in 1977 that the Ethical Resource Center (ERC) was established. Values and ethics to responsiveness became vital in the 1980s as companies began moving away from compliance top exceeding the minimum legal responsibilities. This ethical stance was referred as corporate social responsibility or “a situation where the firm goes beyond compliance and engages in actions that appear to further some social good beyond the interests of the firm and that which is required by law” (Needles, 2010, 299). CSR is based on social contract theory which assumes that organisations have a responsibility to society and must gain legitimacy to operate from the society in which they operate. In this sense, organisations began realising the need to identify the different stakeholders with vested interests in their business and to balance those interests. The 1990s and 2000s was a period of global expansion accompanied with new ethical challenges such as child labour in developing countries as companies moved their operations to Third World countries where labour is cheap. Environmental issues also gained center stage especially as regards to sourcing of materials, genetically modified foods, and carbon footprint (Needle, 2010). Moreover, the development of the internet complicated matters further as it broke cultrural barriers. MNCs in developing countries were accused of applying unsafe work practices especially in sweatshops. Cases of financial mismanagement and fraud, loss of privacy and intellectual property theft marked this period (Birsch, 2014). To deal with issues, some business ethical developments were crucial such as establishment of international business ethics centers and federal sentencing guidelines of 1991, anticorruption efforts and emphasis on CSR. These measures continue operating today and organisations embrace incorporating CSR in all their activities to gain competitive advantage through brand and company reputation. In order to gain competitive advantage, organisations need to take an ethical stand which determines how all its activities are performed. However, there are many ethical perspectives which can determine business behaviour; it all depends on the beliefs of company directors.The first step to acting responsibly was the separation of ownership and management thereby making managers responsible to owners of the business and enhancing their ability to balance interests of the different stakeholders. There are two perspectives to business ethics: descriptive and prescriptive. The descriptive approcah entails recording what is happening while normative or prescriptive entails evaluating degree to which observed customs, attitudes and rules can be said to be ethical or what should be happening. CSR is prescriptive in nature. The virtue ethics perspective was advanced by Aristotle (384-322 BCE). The starting point of such ethics according to Birsch (2014, 155) is human good. In this case, all human actions are geared towards achieving certain ends, goals, or objectives. For example, excercising is aimed at achieving good health. What is bad is thus whatever hinders the accomplishment of this aim. End thus determines what is good or bad. This can be considered as the teleological ethics or consequentialist theory which focuses on consequences of actions. This consequentialist stance is attributed to Jeremy Bentham and later John Stuart Mill. However, while Bentham and Immanuel Kant focus on moral rules and actions, Aristotle focused on virtues and character. He believed that human end must be found in human function. This shared human function according to Aristotle was reasoning and also asserted that human excellence is superiority in reasoning (Birsch, 2014, 163). This execllence allowed a person to develop virtues and good character which in turn enable a person to live well or flourish. This living well (happinness or Eudaimonia) is the ultimate goal of Aristotle’s ethics. Morality in this case entails using reason to act wisely and avoid excessive emotion and desire while intellectual virtues involve accurate beliefs about things which are universal, necesary and eternal achieved through observing, reasoning and logic (p. 162). Aristotle thus asserts that the end of reasoning is truth. For him, certain passions (spite, envy, shamelessness) and actions such as adultery, theft, and murder are always wrong. This is in line with Kant’s categorical imperative. Jeremy Bentham also conrtibuted to development of consequentialist (Utilitarianism) theory which is based on the belief that a person’s actions are good or bad depending on the consequences an action produces (Needle, 2010). For Bentham, what is good is what produces the greatest good for the greatest number or greatest happiness. He believed life is dictated by pleasure and pain and is all about balancing pleasure and pain such as pleasure is more than pain. Good things or right actions are those that bring pleasure while bad things bring pain. As such, when making ethical decisions or ethical reasoning, a person should not be concerned about the means by which the ends are achieved but the end itself provided it is for the common good of all; an act is right if the majority benefit from it. It could be said that the end justifies the means. Contrary to utilitarianism, egoism is about judging economic actions based on personal or corporate benefits (self-interest). This makes organisations to engage only in ethical actions that benefit the company only such as profit maximisation goals. For deontologists like Immanuel Kant, consequences or outcomes of actions are not important, what matters is if actions are morally justified (MacIntyre, 2005; Birsch, 2014). In this case, the end does not justify the means. For example, telling a lie is wrong regardless of whether it benefits one to tell a lie rather than the truth. Ethical reasoning in this case requires one to have a sense of duty and responsibility. Following moral rules is thus crucial if actions are to be considered ethical. These moral values are absolute in nature or are religious absolutes; they are given. Modern organisations are more involved in ethics of care as propagated by feminists like Nel Noddings and Gillian. The feminist view is that there is a morally ideal relatioship between persons: caring (Birsch, 2014, 182). This is shown through receptivity, relatedness and responsiveness. As such, the source of ethical behaviour according to this theory is human relations and human emotional response. Care ethics is based on moral language such that masculine or male language represents universal ethics while female is towards caring for persons. The feminists reject universal moral rules and impartiality in making ethical evaluationsin favour of relations between people. This means that moral development can be grouped into stages of relations. Lawrence Kohlberg’s stages of moral development were advanced in the 1970s and entail three basic levels: preconventional, conventional and post-conventional (Birsch, 2014, p. 179). The preconventional stage is divided into punishment and obedience as well as instrumentalist relativist stage. In punishment and obedience, people behave ethically to avoid physical punishment hence they end up obeying authority. On the other hand, instrumental relativist stage is whereby people behave in ways that allow them to satisfy self-interest. The conventional level is classified into interpersonal conformity and law and order. Through interpersonal conformity, people act to gain approval from family members, friends and society. Law and order involve obeying laws, moral rules and authority figures. The last stage is post-conventional entailing social contract and principled conscience. In this case, behaving ethically is part of social responsibility or contract between the society and organisations as well as excellent moral reasoning. Managers should have a moral compass that guides them to behave ethically in different situations and be able to stand by their moral principles. Businesses have goals and objectives and these are affected by ethical considerations of decision makers. Primark as a large retailer who sources raw materials globally is very clear about where it stands on business ethics and this affects all its decisions or strategies aimed at meeting its business objectives. Primark views itself as “having the responsibility to act ethically. We embrace this responsibility as an opportunity to be a great force for good. We are committed to providing the best possible value for our customers but not at the expense of people who make our products (Pimark, 2015). This shows that Primark does not allow the ends to justify means but looks at the ends to be achieved as well as the means to achieving them. References Birsch, D (2014), Introduction to ethical theories: a procedural approach, Long Grove, IL: Waveland Press, Inc. Carrol, A.B and Shabana, K.M (2010). The business case for corporate social responsibility: A review of concepts, research and practice. International Journal of Management Reviews, 85-105. Friedman, M (1962). The social responsibility of business is to increase its profits. New York Times, September, 126. MacIntyre, A.C (2005), A short history of ethics, Great Britain: Taylor & Francis. Needle, D (2010), Business in context: an introduction to business and its environment, 5ed, Cengage. Primark (2015), www.primark.co.uk Read More