Importance of Ethical Behaviour in Business - Coursework Example

Topic: Given that the profit motive is a central feature of capitalism, explain the most important ways in which you, as a business leader, would expect to be able to motivate ethical behaviour. In so doing, explain how your approach draws upon your own personal abilities, strengths and ‘values’. Name: Class: Unit: Introduction Businesses in a capitalist system have a role to maximise profits for the owners. In fact, every well run business is expected to maximise profits making it a central motive. Capitalism can be looked as a system where the main aim is to accumulate property for the sake of profits (Huerta deSoto, 1999). It is a system that is based on Research shows that corporate and business capitalism has been becoming more unethical and immoral. Ethics is the study of morality and very vital in modern business (Hursthouse, 2013). Most of corporations and financial institutions have been found to violate ethics for the sake of profits. This is what has led to the current tension between democracy and capitalism. Corporate and business scandals have been common with cases such as Wells Fargo fraud and the collapse of Rana Plaza in Dhaka (Akhter, 2014). Given that the profit is a central feature in capitalism, this essay will explain the most important ways as a business leader one can motivate ethical behaviours. This will include using of personal approach drawing on own abilities, strengths and values. Capitalism, profits and ethics Business should be profit oriented but this should not be done at the expense of stakeholders since it is immoral. While, capitalism does not have morality, this can be enforced through relevant authorities (Suciu, 2009). As a business leader, there is need for moral education and enlightment when carrying out business. Unethical business explores the inherent loopholes that exist in a capitalist economy with an aim of maximising profits. In fact, high profits are vital for the survival of capitalism (Huerta deSoto, 1999). When the business underperforms or suffers loss, it is highly likely that the shareholders will sell the shares and join firms with higher profits. When firms focus only on earning the maximum profits, they fail to concern themselves with the welfare of others. They seek to earn the most money as possible without looking at the consequences this has on the society. Capitalism is dominated by such firms whose main aim is pursuit for profits (Suciu, 2009). The chain of scandals which has been witnessed of late in business has led to questions on the ability of capitalism to address greed, abuse and fraud in business. A case in point is the collapse of Rana Plaza which killed over 1000 workers and injuring a lot more. The business was operating with low disregard to workers life with an aim of maximising profits (Akhter, 2014). As a business leader, it is evident that there is a problem with capitalism view on profits. The single minded focus on earning maximum profits has led to erosion of ethics. This is due to fact that profit focus is morally suspect. This is due to fact that profit seeking motives leads to unintended consequences which can affect the society. Most important ways in which as a business leader, I expect to be able to motivate ethical behaviour Capitalism is seen in most cases as egoistic (Hursthouse, 2013).This is where the system works for profits where own needs are advanced at the expense of other stakeholders (Agbude et al., 2015). This has led to a lot of ethical issues. Despite the fact that capitalism is faced with ethical issues, I believe that as a business leader, ethical behaviour can be motivated. I believe that companies should worry less about making profits and become more responsible socially. This involves reducing the conflict between self-interest and the interest of all stakeholders. Business leaders must be ready to seek the interests of all stakeholders (Harris, Sapienza & Bowie, 2009). This is due to fact that one can succeed by being ethical in business. There are several ways in which as a business leader, one can motivate ethical behaviour. These are explained and analysed below. To begin with, there is need to encourage honesty in business. This is due to the positive association of ethics and honesty. Ethical business leaders are truthful and do not mislead others for profits (Jacobs, 2004). At the moment, there have been rise of cases of business dishonesty which has led to massive scandals. An example is the Wells Fargo scandal where lack of honesty lead to one of the largest corporate scandal. The business must be ready to train their workers on the need to have the highest moral standards (Harris, Sapienza & Bowie, 2009). This would ensure that they cannot be easily compromised to engage in scandal as it was in the case of Wells Fargo. As a business leader, I uphold honesty and truth in all dealings. Ethical behaviour in business can be enforced through integrity. Ethical business leaders and staff are able to show high level of personal integrity. They have courage in their convictions and do what they think is right for all stakeholders. According to Kant ethics, integrity makes it possible to withstand the pressure to do wrong due to positive principles (Harris, Sapienza & Bowie, 2009). In this case, an ethical business will fight for its beliefs and is not ready to sacrifice its principles for unscrupulous business conduct. This is a principle that I possess as a business leader which has helped a lot in ensuring ethical business. Ethical behaviour in business can be maintained and motivated through ensuring trustworthiness. This is due to fact that ethics and trust are related. Moreover, having trust ensures that there are low chances of misapprehensions of facts. It ensures that the business does not take advantage of the stakeholders in their quest for profit. Trust acts as a crucial need for the health of an economy. It eliminates the culture of dishonesty enhance eliminating chances of business scandals that have been witnessed (Huerta deSoto, 1999). I am a trustworthy business leader and always keep my promise. Trust in business is supported by mechanisms that ensure that there is no dishonesty. Loyalty can be used to enhance and motivate towards business ethics. This is due to fact that being loyal enhances trust and devotion to duty. Most of the unethical business conducts in capitalist system are supported by leaders who lack loyalty to stakeholders. Through loyalty, it is possible to avoid conflicts of interests which can undermine the business (Jacobs, 2004). It makes sure that workers do not take advantage of others or their positions. Accountability is very vital in enhancing business ethics in a capitalist society. Through accountability, ethical equality can be attained. When there is accountability, it becomes possible to make ethical quality decisions. When the business is accountable, there are low chances of misconduct. As a business leader, accountability has been a pillar to ethical conduct. It ensures that the integrity is upheld in business (Jacobs, 2004). Accountability ensures that one is able to function in an ethical manner. Moreover, ethical behaviour can also be motivated through commitment to excellence. Through pursuing excellence in business conduct, it becomes possible to be informed and prepared in carrying out business duties. It also helps in enhancing responsibility. When people are accountable, they are honest and look beyond their self needs (Carroll & Buchholtz, 2014). This leads to personal ethics and hence upholds business ethics. Ethical behaviour in a business can attract investors into a business. As a business leader, I believe that enhanced communications can improve ethics. This is due to fact that false communication is a major cause of poor business ethics (Bishop, 2000). For example, a business may falsify their accounts or fail to tell the whole truth. This involves feeding the public with wrong information with an aim of benefiting from them. Enron is an example of a business that gave wrong information on their loss. The business communicated wrong information to stakeholders’ with an aim of maintaining their stock prices. This led to one of the largest ethical scandals in business. Thus, giving true information is vital for business success. This is one of my strengths as a business leader. In a capitalist system, ensuring that there is no conflict of interest can help a lot in addressing ethical concerns (Carroll & Buchholtz, 2014). Private interests should not be used to interfere in the running of business. There is need to reduce pressure on workers to meet high expectations in order to encourage ethics. Research shows that unethical business conducts in a capitalist system are based on high pressure to meet unrealistic goals. The business may be under pressure to meet unrealistic objectives and deadlines with an aim of enhancing profits. For example, job pressure may lead to employees lying to customers or not following the quality control required for the products. As a business leader, I believe that business should not be forced to meet unattainable goals at the expense of the shareholders. In a capitalist system, it is common for the business to compete for scarce resources. This is aimed at enhancing the competitive position in a business (Carroll & Buchholtz, 2014). Leaders and staff may make immoral decisions due to competitive mindset at the expense of stakeholders’ interests. To ensure ethics in a business, the leader must maintain and uphold honest and ethical behaviours. The business leader has a role to ensure that they verbally promote business ethics and create an environment where business upholds stakeholders’ interest (Carroll & Buchholtz, 2014). Ethical behaviour must be made to be part of the organisation agenda. For example, the leader should hold regular meetings and teach employees on ethics and benefits of whistleblowing. It is important to explain to workers and shareholders that it is possible to make profits by being ethical. The motivation to do business in a capitalist system is to maximise profits and this can be attained through ethics (Carroll & Buchholtz, 2014). This is due to fact that being ethical leads to a positive business reputation which attracts investors. When business is made to understand the importance of ethical business, they will behave ethically. The profits and business success has to be looked as means to a greater end (Bishop, 2000). I believe in making the world a better place and it is possible to make profits through ethical business. At the moment, businesses have to be socially responsible. Being socially responsible, the business is able to gain a positive reputation (Shamir, 2010). Business which is perceived to be socially responsible has the ability to gain more benefits than the one that is not. Corporate social responsibility (CSR) promotes transparency and enhances accountability in a business (Garriga & Melé, 2004). It leads to mutual benefits for the business and stakeholders through sensible development and conduct. Over the years, CSR has been a vital tool for public relations and contribution to the society. As a business leader, I believe in sustainability and good governance. An organisation can balance their profits with the maintenance of social accountability. It is evident that employees and customers are attracted to organisations that are social responsible (Carroll & Buchholtz, 2014). The issue on sweat shops have been a common unethical practice which can be addressed through CSR and supply chain ethics (Garriga & Melé, 2004). Through discouraging customers from buying clothes made from sweatshops, it is possible to motivate ethics. This should include prosecuting business engaging in sweatshops. Sweatshops violate justice and are unethical. Capitalism has been exploiting workers inherently using the sweatshops. According to Marx, it is hard to make profits without exploitation (Wray-Bliss & Parker, 1998). This is done by modern capitalists through underpaying their workers. It is possible for the capitalism system to run without sweatshops. This is due to fact that sweatshops are built with an aim of enhancing profits at the expense of workers. The business leaders especially at the multinationals should carry out scrutiny at their own plants. There is need to set up code of conduct which sets the expectations for multinationals factories and contractors. These codes should have monitoring from outside contractors. Through this, it will be possible for the business to be ethical and avoid running sweatshops. The business should consider inviting the activities to play a role in the audits. This will enhance credibility and reduce the chances of business being caught running a sweatshop in its supply chain. An example of a firm that have been working to end sweatshops is Nike. After being caught in a scandal involving sweatshops in their supply chain, Nike has worked to enhance their standards. The business has worked hard to enhance their standards and involves use of outside organisations to enhance the supply chain (Akhter, 2014). As a business leader, I believe in putting people before profits. It is possible to have an ethical capitalism where people matters more than profits (Bishop, 2000). This ensures that there is happiness for the great majority. Business has to act morally in their pursuit for profits. The best thing that a business can do to the society is being good (Agbude et al., 2015). Ethics and business management are closely related. This is due to fact that business management involves making the right decisions. Management is thus part of ethics. It is hard for a business leader to make the right decision without having an understanding of business ethics (Wray-Bliss & Parker, 1998). I believe that business ethics is management which is carried out in the real world. With the rising loss of confidence on business ethics in a capitalist system, there is need to restore them (Shamir, 2010). Based on normative ethics, utilitarianism believes in working towards consequences where everyone best interests are advanced (William et al., 2016). Ethics education leads to a change in behaviours hence need to train employees to do good for the most of population. There is need for clear communication on what is expected from the employees as a part of reinforcement of ethics. Based on utilitarianism, business should aspire to attain profits in an ethical and moral environment (Fyke & Buzzanell, 2013). There is need for code of ethics to help deal with employees, customers and suppliers. The business must abide by the laws, rules and regulations which relates to their activities. The leadership is supposed to be conscious on the responsibilities and opportunities and create an environment where ethical conduct is highly appreciated. This involves self-regulation by those in the organisation to ensure ethical standard are maintained (Swedberg, 2005). I believe that placing ethics before profits makes it possible to succeed since it pays off. Conclusion In a capitalist system, the primary goal of a business is to make profits. Despite this, ethics and profits seem incompatible. This has led to a lot of ethical issues in business. Despite the sentiment, it is possible to mix ethics with profits. Business can place people ahead of profits and still succeed. There is no need for trade-off between ethics and profits in a capitalist system since they can be carried out together. This can be attained through use of ways which motivate ethical behaviours in a business. This includes honesty, integrity, trustworthiness, loyalty, fairness, concern for others, accountability, commitment to excellence and good leadership. Business in a capitalist system can implement CSR and end ethical issues. This is through using CSR to help community, end sweatshops, and improve business reputation. Drawing on my personal strengths and values, it is possible to be ethical and still maintain high profits in a capitalist system. References Agbude, G. A., Ogunwede, J. K., Godwyns-Agbude, J., Wogu, I. P. A., & Nchekwube, E. O. (2015). Kant’s categorical imperative and the “business” of profit maximization: The quest for service paradigm. Technology and Investment, 6(01), 1. Akhter, S. (2014). Endless misery of nimble fingers: The Rana Plaza disaster. Asian Journal of Women's Studies, 20(1), 137-147. Bishop, J. D. (2000). Ethics and capitalism. Toronto: University of Toronto Press. Carroll, A., & Buchholtz, A. (2014). Business and society: Ethics, sustainability, and stakeholder management. Mason: Nelson Education. Fyke, J. P., & Buzzanell, P. M. (2013). The ethics of conscious capitalism: Wicked problems in leading change and changing leaders. Human Relations, 66(12), 1619-1643. Garriga, E., & Melé, D. (2004). Corporate social responsibility theories: Mapping the territory. Journal of business ethics, 53(1), 51-71. Harris, J. D., Sapienza, H. J., & Bowie, N. E. (2009). Ethics and entrepreneurship. Journal of business venturing, 24(5), 407-418. Huerta deSoto, J. (1999). The ethics of capitalism. Journal of Markets and Morality, 2(2). Hursthouse, R. (2013). Normative virtue ethics. Ethica, 645. Jacobs, D. C. (2004). A pragmatist approach to integrity in business ethics. Journal of Management Inquiry, 13(3), 215-223. Shamir, R. (2010). Capitalism, governance, and authority: The case of corporate social responsibility. Annual Review of Law and Social Science, 6, 531-553. Suciu, T. (2009). Is Capitalism Ethical?. Bulletin of the Transilvania University of Brasov. Economic Sciences. Series V, 2, 237. Swedberg, R. (2005). Capitalism and ethics: how conflicts‐of‐interest legislation can be used to handle moral dilemmas in the economy. International Social Science Journal, 57(185), 481-492. William H. Shaw, Vincent Barry, Theodora Issa, Bevan Catley, Donata Muntean(2016). Moral Issues in Business, 3rd Asia-Pacific Edition, Cengage Learning, pp. 50-101 Wray-Bliss, E., & Parker, M. (1998). Marxism, capitalism and ethics. Ethics and organizations, 30-52. Read More