Ethics in the Context of Business Behaviour - Essay Example

Ethics in Business: The Case of John Lewis Ethics in the context of business behaviour Ethics is applied to the different functions of business organisations and is binding to the management, employees and all the stakeholders in general (Lluka 2010, p. 4). The management usually sets the standards on how individuals should behave when working in an organisation. The standards are expected to guide the general manner in which a business operates. Theoretical approaches to business The first approach is utilitarianism, in which the rightness or wrongness of an action is determined by the extent to which its consequences are beneficial to a large number of people (Gulcan 2011, p. 2). Therefore, an action that leads to a large number of people experiencing pleasure or benefits for a long time is considered a better alternative to others that may not have similar consequences. On the other hand, an action whose consequences result to pain is considered unethical. In the second approach, egoism, the ethical value of an action is determined based on whether or not the action is beneficial to individual interests (Ferrell, Fraedrich & Ferrell 2010, p. 151). Therefore, under this approach, individuals only act in ways that are beneficial to their interests. Although the interests of individuals vary widely and depend on different factors, this theory suggests that ethical actions should take the wellbeing of the others into consideration as well. The third approach is ethics of rights and justice. In this approach, the rights of different individuals and the need for justice and fairness are used as the guiding principles in determining the wrongness or rightness of an action. Basically, there are three types of justice that are usually sought under this approach: procedural, interactional and distributive justice (Ferrell et al. 2010, p. 159). These provide the basis upon which individuals within a business context interact with each other. Application of theoretical approaches to the business environment There are different ways in which the various theoretical approaches to ethics are applied to the business environment. For example, the theories are usually used during the decision-making process within organisations (Fernando 2010, p. 8). The management of a business organisation as well as the other employees are usually required to make decisions as part of their work. Since the decisions normally affect different individuals and the whole organisation, they usually use different theories such as utilitarianism and egoism to make the most appropriate decisions. Secondly, the different theoretical approaches to ethics are applicable to the context of business organisations in that ethical considerations are usually used to guide the activities of different functions of organisations (Velentzas & Broni 2010, p. 798). Usually, the different fields of ethics of finance, ethics of human resource management, ethics of operations and ethics of sales and marketing correspond to the core functions of any business organisation. Therefore, organisations use the different theoretical approaches to develop different forms of business ethics that are used to guide operations in every department. Thirdly, the different approaches are usually used to develop values for organisations. The ethical values that are developed are usually meant to guide the actions of all the employees acting within the context of the organisation. According to Fernando (2010, p. 10), the importance of developing corporate values is that it helps organisations to incorporate ethics in their business strategies. This helps to avoid cases of misbehaviour, maintain good reputation, and generally maintain a sense of sustainability over the long term. Summary of principles and practices of John Lewis John Lewis is a large chain of departmental stores. The company operates different stores selling a wide range of products and located in different locations across the United Kingdom. The company has a number of operational policies and practices. These are summarised as follows. To start with, under the “Never knowingly undersold” theme, the company addresses three key issues in its operations: service, quality and price (John Lewis 2015). The policy of the company is to stock products that meet the highest standards of quality. This is ensured by monitoring the entire process by which the products are produced before being supplied to the stores. Further, the organisation seeks to charge its customers the lowest and fairest prices in the market. With regard to this, it commits itself to lowering its prices to match those of its direct competitors who are offering similar products in similar regions. With regard to service, John Lewis is committed to ensuring that its employees give helpful and impartial advice about the products to customers. Another point is that John Lewis is highly concerned with the safety of the customers who buy and use different products stocked in its stores. It is because of this that the company has a product recall policy in place. When concerns are raised about the safety of any product sold in the stores, the company takes responsibility not only to inform its customers about the concerns, but also correct the problem by either replacing or repairing the products. How the practices are related to theoretical approaches The approach of fairness and justice is demonstrated in the manner in which John Lewis seeks to address the needs of its clients. The company’s belief in delivering goods of the highest quality to clients, giving them impartial advice and seeking to replace any goods that are faulty or unsafe to use is a practical application of the ethics of justice and fairness theory. Furthermore, the company seeks to safeguard its own interests by ensuring that its suppliers adhere to strict standards. This can be interpreted in terms of the egoism theory of ethics. The interest of the company, which is to stock high quality goods for its clients, can be seen as the motivating factor in the way the company relates with its suppliers. Lastly, by lowering its prices to reflect what is being charged by the competition, the company seeks to ensure that the highest number of individuals benefit from its pricing policies. This can be interpreted in terms of the theory of utilitarianism. Lowering prices relative to those of competitors is seen as an action that the company takes because it guarantees to benefit many individuals for a long time. Critical examination of the ethical policies of John Lewis The ethical policies of the company are based on the need to safeguard the interests of the company by ensuring that the needs of customers are adequately met. Although this is a good approach, there is need for the company to consider and prioritise the interests of the other stakeholders such as employees and suppliers in the application of its ethical principles. (1098 words) References Fernando, AC 2010, Business ethics and corporate governance, Pearson, New Delhi. Ferrell, OC, Fraedrich, J & Ferrell, L 2010, Business ethics: ethical decision making and cases, Cengage, Mason. Gulcan, NY 2011, Some ethical approaches in business, viewed 17 June 2015, . John Lewis 2015, Never knowingly undersold, viewed 15 June 2015, . Lluka, V 2010, Business ethics: some theoretical issues, viewed 17 June 2015, . Velentzas, J & Broni, G 2010, ‘Ethical dimensions in the conduct of business: business ethics, corporate social responsibility and the law. The ethics in business as a sense of business ethics’, International Conference on Applied Economics, pp. 795-819. Read More