Defining and Communicating Ethics in Business - Article Example

Defining and Communicating Ethics in Business Abstract Ethics plays an important role in defining moral and requirements of humanity. Various dominant theories such as deontology, virtue and utilitarianism play an important role in determining decision-making process. Theories define the way and approach towards achieving a given goal bring into consideration components such as integrity, justice and trust. Various academicians and researchers have different view towards achievement of ethically corrected decision. To solve this divergent approach, it is only through bridging the differences of the various ethical theories into one e.g. pluralism. Identify and define dominant ethical theories Ethical theories are the foundations of any ethical analysis since it derives the viewpoints in which guidance can be achieved towards making a decision. The different type of ethical theories tries to emphasize different perspectives in ensuring that decisions that are made are ethically correct. However, the success of any ethical theory is dependent in its utilization to achieve a given objective. For the success of ethical theories, it requires principles that are that give the given theory. The choice of a theory to a person depends on their individual choice in relation to their life experiences. For example, utilitarianism theory principle lies on its ability to predict the result or impact of a given action, hence a form of consequentialism. This doctrine brings together various views as explained by Bailey (1997) “…is not a single doctrine but a family of doctrines defined by the following four characteristics...” (p. 4), he further states that the four characteristics are the theory of the personal good, evaluative consequentialism, distributive indifference about the good and the interpersonal comparability. Thus, from this perspective the ultimate goal of the theory is pleasure or happiness. In fact, utilitarianism goes handy with the phrase “the greatest good for the greatest number”, which is achieved from the act type of utilitarianism. The act utilitarianism is dependent on evaluation of specific circumstances. Houser, Wilcsenski and Ham (2006) reference Harris (2002) who states that “Act utilitarianism is based solely on evaluation of the specific circumstances” (p. 27). Rule utilitarianism is based on the assumption that general rules govern ethical behavior. Rule theory is from the perspective that the consequence of a given utility is determined by how everyone else usually acts. Utilitarianism theory champions’ happiness or pleasure and lies on believe that the right ethical decision is dependent on greatest benefit. A different perspective is taken by the deontological theory that requires people to adhere to the rules that are in place in determining the direction of an ethical dilemma. The person should follow individual or societal directives in upholding a requirement that is considered ethically correct. Deontological theories bring into consideration religious and duty ethics that stresses doing only the right and does not place into consideration its consequences. Reichet & Lambiase (2003) states, “Deontological theory states that the rightness or wrongness of actions and behaviors should be judged by the actions themselves without regard to the outcomes” (p. 98). This theory is governed by acts or rules that should be accepted as obligations as explained by Porter (2001) “An act is not right by virtue of its outcome, that is, by the fact that it promotes some good end, but because of some innate and excellent features” (p. 186). The aim of this theory is to act and act according to identifiable facts about the act itself (Porter, 2001). Like utilitarianism, the deontology theory is grouped into two: act and rule deontology. Act deontology relies on the fact that judgment depends on appropriate actions that are taken at a given time and in a unique place. This is because each situation is unique and different from any other. On the other perspective, rule deontology believes that general principles override particular judgments and gives the guidelines to show the appropriate strategy of a given ethical dilemma. Deontology theories fundamental point is the obligation of decision taken when faced with ethical dilemma. Deontology theories do not point in the nature and direction of a person’s character, which is clearly dictated by virtue theory. Virtue theory judges a person not by action that he/she has taken, but by the person’s character. The ethical behavior of a given person and especially when decisions are made factors into consideration person’s reputation, morals and motivation. Warburton (1999) states that “virtue theorists focus on character and are interested in the individual’s life as a whole” (p. 54). Most theorists asks themselves questions such as “How should I live?” and the answer from a virtue perspective is to cultivate the virtues. Thus, cultivation of virtues controls is paramount for a human being to flourish. Warburton (1999) states, “A virtue isn’t an unthinking habit, but rather involves an intelligent judgment about the appropriate response to the situation you are in” (p. 55). Ethical theories bring important characteristics to the process of decision-making. Most of these ethical theories try to accomplish a certain aim, but usually there are complex failings and flaws. This problem can be rectified by bringing together the various ethical theories in achieving the most ethically correct answer that suite a given scenario. Analyze business issues using fundamental ethical theories Business issues and ethical theories go hand in hand in determining the satisfaction of a given issue. However, most employees usually are accosted with questions that revolve on ethics and fairness. For example, are promotions based on merit or favoritism? Should I place myself at risk by helping an employee who is at a risk of being fired? What about a sexist boss? In most cases, the workplace may be termed, as “target-rich environment” since there are many ethical and moral issues that occurs daily. Most activities in business sector are concerned with making profits and creating revenues as said by Budd & Scoville (2005), “For business ethics to mean anything, it must at least sometimes lead managers to do something that cuts against their otherwise dominant drive to maximize profits” (p. 277). If this happens, ethics will have achieved its goals. Moreover, if the managers pursue ethics, does it have any relation with improving profit? Alternatively, do a child who was raised be told “be nice” and “share” and then grew up to learn about economy crisis and labor market problems. Theoretical basis that are in place to guide through the intuitive perception, one of them been the utilitarianism. The main aim of utilitarianism is “the greatest good for the greatest number”. However, looking on the way that business operates, such that it seeks to increase wealth for the owners and improve payments for the upper management and at the same time ignoring the other masses, this shows that business cannot pass the basic requirement of utilitarian ethics. From another perspective, the manager encourages treating the customer well, and at the same time says that the approach will benefit the two of them – worker and manager. This illustrates the overall idea of consequences. Utilitarianism defines the way to approach an issue and provide the appropriate act to be fulfilled. Fredrick (2000) states “It cautions us not to act on our mere intuitions as to what is right and wrong, and requires us to enumerate alternatives, consider all their consequences, calculate utilities, and then act to maximize utility” (p. 22). Moreover, if a plant wants to relocate, the management will have to analyze the benefits, harms, and consequences to parties involved, which is a point that is fundamental to utility. Economists’ champions “free market” because it maximizes their own utility. Nevertheless, the idea of profits originates from efficiency, which justifies utilitarianism. Utilitarianism champions consequences or utility and ensures good for most people. The second commonly utilized basis is deontology, which revolves on treating others correctly. Deontology follows the beliefs that treat others the way that you want to be treated. This golden rule fails in most organizations and business, because everyone wants more profits, greater control and more wages. Nevertheless, many people want to move to the management level to prevent the bossed around and underpaid nature of low-level workers. However, the common problem is the difficulty in trying to separate psychological motivation from justification, i.e. how deep to search for a requirement of person – what the person “deserves” or being on crossroads in choosing between ethically based standards. This problem can be illustrated by the workers demand for better working conditions or better pay. The amount of better pay or wage cannot easily be understood, or the means to gauge what is meant by better wage, this creates a moral dilemma. In most cases, business activities bases most of its activities on deontological view, Kline (2005) view that deontology backs certain activities, rules or boundaries, even if it inhibits maximum profits. An example is contractual agreement, which generally supersedes and transcends any outcome of a specific outcome. Robinson et al (2007) reference Emmanuel Kant (1964) by stating, “Right actions are prescribed by duties – keep promises, be truthful, be fair, avoid inflicting suffering on others and reciprocate the kindness of others” (p. 31). The root of this theory is do to others want you want others to do for. This aspect is commonly seen in religious books and teachings; however, this aspect is complex, for example, most companies require loyal workers, but what about the company commits an immoral action, will the worker remain loyal, what about when two actions are just but not compatible? Foreseeing all actions of a given circumstances and in most cases are those that are not similar poses further ethical questions. Deontology theory lies on the believe that obligations should be fulfilled and self-consciousness guides the approach to successful judge an ethical dilemma. Thus, what is the self-consciousness? Alternatively, what brings about the fulfillment of the obligation or else morality? Virtue theory bases foundation of morality on the development of appropriate character trait, which becomes virtues – it is commonly said that a person with virtue is good. Virtue theory does not promote rights and duties, an aspect that deontology specialize, rather it specializes on the cultivation of character, and champions individual and collective responsibility. However, the theory merely touches on rights and duties, but the rights moves away from self to the rights of others. Arjoon (2000) view that virtue is shown in organizations through defining roles and responsibilities for each person to accomplish. Arjoon further states, “In fact, it is the virtue of responsibility or justice that allows us to recognize and respect the rights of others, which is the source of our obligations and a sense of duty for the welfare and happiness of others” (p. 162). Virtue controls the way that people fulfills their obligations resulting into strength and superiority. Virtue occurs through practice or repetitive activities. The character of a person determines the approach and perspective that other people will see the person rather not from the incident at hand. For example, a person may plagiarism some work, because of the persons good character, the person may be charged leniently giving doubts to the reason of plagiarizing. Ethical theories shapes the way that business issues are fulfilled and requirements are achieved. Most businesses utilize ethical theories to achieve the goals that the company expects and fulfillment of requirements of the given organization. Nevertheless, the ethical theories illustrate the ethical dilemmas that experienced by many people trying to make decisions. Personal intuition guides and lays down the approach that specific approaches towards achieving a given goal are laid down. Identify ethical components of contemporary business issues Contemporary business issues have some ethical bases that make them unique and relevant to the application of the appropriate ethical theories. Activities that are undertaken by organizations especially in making profits is against believe of Confucian ethics. In his writings, Chan (2008) link the relationship that exists between “inferior man” and profits and the idea of righteousness and benevolence over profit. In fact, Chan states, “a man of humanity develops his personality by means of his wealth, while the inhumane person develops wealth at the sacrifice of his personality” (p. 349). Thus, Chan tries to champion that components of business ethics should revolve on benevolence, righteousness, humanity and the development of one’s personality. Many businesses have reduced the aim of developing human virtues and turned to profit making, which tends towards attaining material wealth rather than living virtuously. However, this theory is not against making profits rather require that the profits that are made is for the community’s own good – not for self purposes. Virtues are an important consideration in contemporary business issues as reflected by Small and Dickie (1999), “In a business context, people who exhibit high moral principles and reflect a concern for values such as fairness, trustworthiness, honesty, integrity and justice are usually highly valued” (p. 628). Nevertheless, the idea of virtues utilized by Aristotelian group of virtues: courage, wittiness, shame, trustfulness, and just. All these perspectives shape the business in terms of virtues to achieve self-interest and organization interests. Virtues cannot accomplish alone the requirements of business issues and it may be supported by trust. Trust may be defined as the willingness of a party to be vulnerable to actions of other parties. Hosmer (1995) proposes five components that makes up trust: integrity – truthfulness and honesty on the part of the trusted individual, consistency – reliability, predictability and good judgment, openness – willingness to share ideas and information freely with others, loyalty – willingness to protect and help others and competence – technical knowledge and interpersonal skill that is needed to perform and accomplish a given task. Trust plays an important role in development and dynamism of economies. Those economies or business that have minimal trust are run by specific persons e.g. Latin America business are run by family members while in developed economies such as US and Germany are run by independent bodies. The trust and the willingness to fulfill a given task define ethical considerations towards the achievement of the given goal. Thus, without trust human affairs could likely break down. In the case of vulnerability, it is a two edged idea, people put trust to other people in which they are then put in position of vulnerability themselves. Trust allows people to fulfill the tasks and duties that they are accorded. However, trust cannot work without integrity. Small & Dickie (1999) reference the writings of Benjamin Franklin stating that “integrity as an integrated triad consisting of a reasonably coherent stable set of values and principles, verbal behavior expressing these values and principles, and conduct embodying one’s values and principles consistent with what one says” (p. 633). Small and Dickie breaks down integrity into four groups: moral conscientiousness e.g. trustworthy, follow rules and are against all illegal practices, moral accountability e.g. self-awareness and self-control, moral commitment e.g. strongly holding commitments and moral coherence e.g. people should be consisted both in word and in deed. Ethical components play an important role in shaping business activities. Even justice is fundamental in the way that businesses are run. Small & Dickie (1999) trace the writing of Aristotle’s (circa 325 BC) that defies justice. He further splits justice into two categories: distributive and corrective. Distributive means the distribution of wealth and all members of the community are served equally. Corrective brings into consideration the idea of private transactions, which are voluntary and involuntary. Thus, justice can be viewed as what the requirements of humanity, just and reason ought to do not what the lawyer wants to be done. An example is taxation in Australia in which it is termed as fair distribution and just. However, the success of justice is inhibited by self-sufficiency, moderate life styles, level of generosity that is demonstrated and vulnerability between persons (Hume, 1711-1776). Compare and contrast the current literature related to ethics on the topic Business ethical complexities are been expressed in both sides e.g. ethical and unethical sides. Various authors tend to rely their writings on some specific point rather than analyzing the entire process. Crane (2000) analyzes this perspective by writing on ethics in marketing, “Research investigating ethical issues in this sense has tended to focus on the harmful consequences of transactions, and in particular on analyzing specific high profile cases such as the Ford Pinto, Proctor and Gamble’s Rely tampon, and Nestle infant formula” (p. 16). However, Crane (2000) supports the idea that social and environmental awareness plays an important role in arising ethical concerns not only in the individual transactions rather the entire exchange process. Still in marketing, various studies have focused on unethical decisions that is frequently seen in decisions and practices in the marketing process. Most authors conquer in the marketing mix, market research techniques, and market segmentation. These practices, especially segmentation, give attention to unethical targeting practices and especially to the ‘vulnerable’ groups e.g. patients and children. Crane (2000) supports the idea as other writers such as (Robin and Reidenbach, 1993) in supporting that marketing ethics as been analyzed by various theories giving examples of deontology, utilitarianism and virtue. Academics and authors have been successful in the mobilization of theories that condemns moral deficiencies especially unethical marketing decisions sanctioned by managers and has improved the standing of ethics in marketing. Specifically, (Crane 2000) states, “it is important for theoretical development to move away from such ethical judgments drawn from a lofty philosophical plane, and move more towards an understanding of morality located more directly in marketing practice” (p. 17). Sharma and Bhal (2004) references (Murphy and Laczniak, 1981) an aspect that is supported by many authors that the different ethical theories have different conclusions. For example, Sharma and Bhal (2004) give the example of teleological and deontological theories in that, the end goal of teleological is consequences of actions while deontology is based on obligations. Religion especially in a normative ethics consideration in decision making results in people conceptualizing different frame works. In fact, Sharma and Bhal (2004) gives two frameworks, one rooted in worldly logic (pragmatic) and religious (religious) frameworks. Osborne (2006) conquers in this perspective of religion and pragmatic framework “…pragmatism dominates at the workplace, the religious conviction of the managers too, is important and expected to directly or indirectly influence their behavior in situations of ethical dilemma at the workplace” (p. 206). Nevertheless, authors from different parts of the globe e.g. British and America textbooks necessity for theory in business shows some differences. Some common differences that are highlighted include individual versus institutional morality, questioning versus accepting capitalism and justifying versus applying moral norms in fulfilling a business ethic dilemma. Most academicians and researchers accept that ethical theories plays paramount role in explaining and helping why some decisions are made. They accept that theories shape the way of life, but they differ on the direction and approach to analyze ethical dilemmas and concentration on certain sides. Some authors’ emphasis on only one aspect of the ethical dilemma creating an impression at the end that something is unethical but have not conclusively pinpoint all factors that brings this issue into happening. Formulate informed responses to complex organizational issues using ethical theory Ethical theories approach ethical dilemmas from different perspectives and sometimes resulting in making different ethical decisions. An example is the case of President Lincoln’s decision to sign the emancipation proclamation (Garofalo and Geuras, 2006). Let us see this decision in utilitarian consideration and deontologist perspective. If he used utilitarian considerations, he saw that humanity could be better without slavery. Thus, is this decision immoral because the considerations of deontology were not factored? It is the obligation of the president to govern the people without bias, thus it is his obligation to sign the article. However, did the president factor the issue of the people who utilized the benefits of these slaves e.g. their masters? This clearly exhibits utilitarian theoretical perspective. Another example that illustrates the complexities that are associated with ethical theories and morality is the idea of whistleblowers. There is no neutral stand for whistleblowers in that how far this practice can be regarded as ‘obligatory’ or ‘permissible’. In few instances, whistleblowers can be regarded as obligatory. This is because it is believed that someone who give/withhold support or aid to another person does not gain from the act itself (Lewis 2001). This problem can be witnessed is situations such as ‘stealing’. For example, a person’s wife is sick and there is certain drug that can heal her. However, the production cost of the drug is $200 but the seller increases the price to $2000, when the person comes to purchase it. The person then raises $1000 from friends to meet the value of the drug. Nevertheless, the drug dealer refuses to take this amount as a down payment. The person looses temper, breaks into the drug shop, and steals the drug. From an ethical perspective, is this person immoral? Utilitarianism will view this as such that it has not interfered ethical considerations because it utilizes the idea of utility – the most benefit. However, a deontologist and virtuous approach view this as immoral because it contradicts with the requirements of obligations and infringes virtue part of do not steal. Thus, the different theories come with different approach towards fulfilling ethical dilemmas. Nevertheless, a neutral ground should be arrived in which the different ethical theories can come into agreement. Crane and Matten (2007) reference De George (1999) bringing into considerations two extreme positions in ethical theories can be grouped: absolutism and relativism. Ethical absolutism claims that there are universally applicable and eternal moral principles; wrong and right are objective qualities. Ethical relativism claims that morality is subjective and context dependent; ethics depends on the person making the decision and the culture that the person is located. Crane and Matten (2007) champions a position that is pluralism in that it occupies middle ground between relativism and absolutism. Thus, Crane and Matten (2007) states, “Pluralism accepts different moral convictions and backgrounds while at the same time suggesting that a consensus on basic principles and rules in a certain social context can, and should, be reached” (p. 87). This enables solving decisions that are made by more than one person with different moral presuppositions. References Arjoon, S. (2000). Virtue theory as a dynamic theory of business. Journal of Business Ethics, 28,159-178. Bailey, W. (1997). Utilitarianism, Institutions and Justice. Retrieved from http://books.google.com/books?id=D7ErH95lEkkC&pg=PA3&dq=what+is+utilitarianism&lr=#PPA4,M1 Budd, J. & Scoville, J. (2005). The ethics of human resources and industrial relations. Retrieved from http://books.google.com/books?id=56dE7nLMNdoC&pg=PA277&dq=utilitarianism+in+business#PPA275,M1 Bourgeois, L.J., & Brodwin, D.R. (1984). Strategic Implementation: Five Approaches to a Elusive Phenomenon. Strategic Management Journal, 5(3), 241-264. Crane, A. (2000). Marketing, Morality and the Natural Environment. Retrieved from http://books.google.com/books?id=6AUVNzsdhr4C&pg=PA16&dq=literature+on+ethical+theories Crane, A. & Matten, D. (2007). Business Ethics. Retrieved from http://books.google.com/books?id=n455iCqILW4C&pg=PA86&dq=complex+organizational+issues+using+ethical+theory#PPA104,M1 Chan, Y. (2008). The Relevance and value of Confucianism in Contemporary Business Ethics. Journal of Business Ethics, 77, 347 – 360. DOI 10.1007/5/0551-007-9354-z. Dwyer, R., & Welsh, M. (1985). Environmental Relationships of the Internal Political Economy of Marketing Channels. Journal of Marketing Research, 22(4), 397-414. 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Retrieved from http://books.google.com/books?id=lsWIy-T-0B4C&pg=PA205&dq=literature+ethical+theories+and+decsion+making#PPA207,M1 Warburto, N. (1999). Philosophy: The basics. Retrieved from http://books.google.com/books?id=jNotC2OQocIC&pg=PA54&dq=virtue+theory#PPA55,M1 Read More