Critical Analysis of Business Ethics - Coursework Example

Business Ethics Introduction Business ethics is a topic that has come under debate from academics and business professionals for the vague notions associated with the subject. Theoretically, it is much easier to promote the advantages of good business ethics. But in practice, business professionals face several circumstantial dilemmas which are not clearly addressed by those who profess business ethics. The multi-dimensional aspect of business ethics places the responsibility for ethical business conduct on the business professional, peers, organization and the various factors that influence a person to make a decision. Thesis It may be argued that the business professional is not solely responsible for proper business conduct, but the organization can assist ethical behavior of a business person by laying code of conduct which may be used for immediate reference when the individual is unsure of the step ahead. Critical analysis of Business Ethics Business ethics does not have a typical definition because the rightness or wrongness of a behavior in business is not agreed by all as morally right or wrong, ethical or unethical, good or bad. Ethics has evolved from ancient tradition based on cultural, religious and philosophical beliefs. Business ethics is an argumentative subject with disagreements erupting due to its dynamism, complexity and interdependence in business. Business operations usually involve compromise. There are two basic viewpoints about business ethics: (a) business ethics is inseparable from personal or other ethics and (b) business will not be more ethical than the people who conduct business. There are certain assumptions that form the basis for business ethical and unethical business conduct. It is assumed that profit is not the only motive of business, competition leads individuals to ignore ethics, pressure to compromise ethics occurs often at lower and middle management levels, a person who act ethically has a proper personal code, ethics is highest among youngest and those in the final stages of their careers, individuals with ethical superior tend to behave ethically, workplace pressures to exhibit performance can lead to unethical behavior and more managers and employees identify their ethical behavior with the policies of their organization(Lewis, P.V. 1985 p.377-383). Some scholars define ethics as an inquiry into the grounds and nature of morality where morality is considered as standards, moral judgements and rules of conduct. The confusion in understanding ethics is due to the inability to determine precisely the various factors of business ethics and leads to ethical conflict (Vitell, S.J. & Festervand, T.A. 1987 p.111-122). Business ethics is a highly critical subject though it is considered as a very critical issue for business conduct since the 1970’s due to the various logics and the lack of proper direction in setting theories. While individuals are bolstered to conduct business with ethics using concepts that describe factual state of affairs like organizational accountability structures, managerial motivation and relationship between financial performance and ethical behavior, normative concepts like code of conduct for a particular circumstance also has significance for ethical business management (Donaldson, T. & Dunfee, T.W. 1994 p.252-284). The renewed effort to draft well defined ethical measures has risen from the recurrence of concern over ethical issues like the inadequacy of ethical behavior exhibited by several individuals in responsible positions. Newspaper reports appear frequently about erring companies that are investigated for illegal business activities like bribes to foreign nations, illegal campaign contributions, insider training and the like. For these reasons policy statements are recommended by corporations, by recognizing the obvious facts that certain distinguished executives are not bothered about the means and methods to achieve business targets and goals even if it includes the breaking of law. The reinforcement of business ethics through well defined measures is important because the social environment is likely to become more disorderly and turbulent with development in all spheres. Corruption is the most popular word among investigations related to corporate fraud that take place in the form of golden parachutes, exorbitant bonuses, ego motivated takeover wars, greenmail and fraud. A research by Amitai Etzioni indicates that two-thirds of the 500 largest corporations in the United States are involved in illegal behavior of varying degrees. But the majority of critical circumstances faced by business executives currently do not include purely legal matters. Business people are forced to make judgments with respect to what is ethical or right to do. The task of distinguishing unethical and ethical business practices is not easy. As noted by Kenneth Andrews, it is easy to say no if the ethics are in black and white for a man of normal courage and security, but it is the grey areas that are likely to falter a businessman. It is a fact that most business decision includes the choice between two undesirable options or two or more products. A related question that daunt ethical decision making is the situation where good and evil appear to be a combined product. It may be said that a desirable outcome includes a negative one too (Tsalikis, J. & Fritzsche, D.J. 1989 p.695-743). There are various factors that drive business executives to make unethical decisions. Some of them are discussed below: Economic pressures The general public is of the view that business executives should follow absolute moral standard instead of following a moral standard as set by their peer group. It is noted that executives also strongly favour to follow ethical absolutes and they believe that sound ethics is better business in the long run. However, when it comes to practice, executives are unable to maintain and apply this ethical standard at work because they are overwhelmingly preoccupied to make business gain. There are two inferences observed from this failure to follow ethical standards: (i) though sound ethics has long run advantage, ethical business behaviour is not essentially recognized and rewarded in the society and in organisations. Superiors in business organizations are not concerned about the methods used to achieve results but are concerned only about the desired outcomes. (ii) The demand for competence and related pressure at work from outside the company leads a business professional to give less importance to ethical consideration. Stiff competition at the marketplace reflects on the conduct of business people who are forced to exhibit practices that are labelled shady but are crucial for survival in an organization or for the survival of a business (Malachowski, A.R. 2001 p.180). Societal factors The involvement of society in ensuring ethical business conduct has an impact on the standard of ethical conduct of business professionals. Higher standard of business ethics is exhibited when the management of a company gives education to business individuals and results in better sense of responsiveness and awareness of ethics. Lower standards of business ethics is exhibited when there is pressure from the organization for profit maximization. Public opinion surveyed through questionnaire reveals three clear messages. (i) Public response to the actions of business people and the anxiety among business people over unethical business conduct are significant factors that improve ethical standards (ii) Individual greed, hedonism and general decline in social standard influence a decrease in ethical standards (iii) The factors that cause change in ethical standards are the ones which cannot be directly controlled. Growing cynicism Executives are usually faced with ethical dilemmas and feel that even commonly accepted business practices are unethical. They are more likely to exhibit questionable business conduct that seem strange to business colleagues than for themselves (Malachowski, A.R. 2001 p.181). Reasons for unethical behaviour and how to restore confidence among executives to exhibit ethical business conduct? Business ethics is a topic that is subject to continued criticism from scholars and practitioners due to the multidimensional aspects of business operations. There cannot be an absolute rule for code of business conduct though better standards can be ensured through well laid down principles that encourage business professionals to view and practice ethics with ease, and reduce the instances of unethical acts. It is found that the behaviour of a superior is the basic reason for unethical conduct while company policy is a distance secondary reason that result unethical behaviour. That is, when a business professional is in ethical dilemma, the person first refers to the organizational framework to seek guidance. In case the unethical act of peers is the first option and a formal organizational policy is unavailable, there is likelihood for unethical business behaviour while making a decision. However, if the organization has a formal policy in terms of ethical code, the business person would highly benefit from such guideline for immediate ethical answers. Therefore, individual actions can be influenced by a well defined code of conduct of the organization. Similarly, business people prefer to have more general ethical codes and less specific ethical codes though specific codes can help executives to define the extent of acceptable conduct, improve the ethical level of the organization they represent and refuse unethical demands. Whether it is general or specific the mere presence of a code can improve the degree of business ethics due to its clarification factor that clearly defines ethical conduct (Malachowski, A.R. 2001 p.188) Erroneous caricature Business ethics has come under much debate with the non-acceptance of traditional ideologies that view business as a single dimensioned profit oriented institution. The current society does not fully endorse the ideology that business is meant to just stick to business. A major part of the society opine that social responsibility through ethical business is good only if it improves public relations and prevents governmental interferences (Malachowski, A.R. 2001 p.191). It is found from research that the study of business ethics for professional purposes undergoes a state of change into maturation as students move from undergraduate to graduate level. However, formal training in business ethics does not have relevance in professional circumstances. Ethical training improves ethical behaviour according to the expectation of the society only in the college circumstances and is not fully supportive in the practical business operation (Davis, J.R. & Welton, R.E. 1991 p.451-463). The education of business ethics in campuses is causing bewilderment to actual managers not due to the dislike to do the right thing but because business ethicists do not offer the required practical advice. When business ethics was not considered a formal discipline, supporters of the subject claimed that there would be widespread acceptance and recognition for ethical behaviour. But business interests and ethics has not fruitfully intersected in the real world leaving mangers to search in the dark for the correct ethical option. The ethics pays approach was highly criticized and academics were of the stand that business interests and ethics can and do conflict. However, scholars stood by an equally unrealistic stand. They believe that a manager’s motive has to be either self-interested or philanthropic but never to have both stances. It may be noted that ethicists are not addressing the complex moral dilemmas faced by manager in day to day business circumstances but steps are being initiated only off late. After few initial problems, ethicists are now changing their ideas about pure ethics and are seriously taking into account the cost of doing just the right thing. As a result new business ethics is evolving to accept and acknowledge the messy world that comprises of mixed motives. Novel concepts such as moderation, minimalism and pragmatism are springing up to assist business executives to clearly understand and practice business ethics (Stark A. 1993 p: 38-40, 43-4, 46-8). The ethical behaviour of business individuals is considered to be influenced by the religiousness of an individual. This view is strongly supported theoretically based on various aspects of religiousness such as conservatism, fundamentalism and intrinsic religiousness. On the basis of the dimensions of a religion, a person behaves ethically or unethically. Functionalist theory supports religion to serve numerous crucial purposes for individuals and society. Religion supports social solidarity that partially provides rules that decrease conflict and impose sanctions for antisocial behaviour. Religion also helps to legitimize prevailing social order that monitors social arrangements in the society. Therefore, religion is a significant social institution that controls beliefs and behaviours. The role of religion, as per major themes of functionalist theory is an integrative one where the society as a whole and the individuals are controlled. It was noted by scholars that people with religious inclinations carry a good rapport for attitude and conduct by facilitating social integration. The extent of religious inclination of an individual determines the extent of values of a person. Therefore, it is appropriate to assess the relation between religious characteristics, attitude of individuals and their values while carrying out business assignments and decision making (Kennedy, E.J. & Lawton, L. 1998 p.163-175). Conclusion It may be concluded that, business ethics is persistently in an evolving stage due to the multidimensional aspects of business decision making. However, ethical responsibility of an individual must be ensured through the self and through the support of the organisation, superior personnel and peer. Organisations must lay down code of conduct for business people because it is a crucial factor that ensures ethical conduct. The study of business ethics as a subject is not of much relevance because practical circumstances faced by business people are different and multiple. Personal qualities like religious inclination have an impact on ethical conduct. Therefore, a business person has the responsibility to exhibit ethical behaviour to the maximum possible extent. Reference Davis, J.R. & Welton, R.E. 1991 Professional Ethics: Business Students perceptions Journal of Business Ethics Vol:10 p.451-463Available: http://resources.metapress.com/pdf-preview.axd?code=k83m4m7336150675&size=largest. Retrieved on November 23, 2008 Donaldson, T. & Dunfee, T.W. 1994 Toward a Unified Conception of Business Ethics: Integrative Social Contracts Theory Academy of Management Vol.19 No.2 p.252-284 Available: http://www.jstor.org/pss/258705. Retrieved on November 23, 2008 Kennedy, E.J. & Lawton, L. 1998 Religiousness and Business Ethics Journal of Business Ethics Vol: 17 p.163-175 Available: http://resources.metapress.com/pdf-preview.axd?code=n36v2l2336358225&size=largest. Retrieved on November 23, 2008 Lewis, P.V. 1985 Defining ‘Business Ethics’: Like Nailing Jello to a Wall Journal of Business Ethics Vol.4 p.377-383 Available: http://resources.metapress.com/pdf-preview.axd?code=9604533j32rl1n5m&size=largest. Retrieved on November 23, 2008 Malachowski, A.R. 2001 Business ethics: critical perspectives on business and management Volume 1 of Business Ethics, London:Taylor & Francis Stark A. 1993 Whats the matter with business ethics? Harvard Business Review Vol:71 Iss.3 p:38-40, 43-4, 46-8 Available: http://www.ncbi.nlm.nih.gov/pubmed/10126154. Retrieved on November 23, 2008 Tsalikis, J. & Fritzsche, D.J. 1989 Business Ethics: A literature review with a focus on marketing ethics Journal of Business Ethics Vol.8 p.695-743 Available: http://resources.metapress.com/pdf-preview.axd?code=j171g85570072172&size=largest. Retrieved on November 23, 2008 Vitell, S.J. & Festervand, T.A. 1987 Business Ethics: Conflicts, Practices and beliefs of industrial executives Journal of Business ethics Vol:6 p.111-122 Available: http://resources.metapress.com/pdf-preview.axd?code=x6762v7077486082&size=largest. Retrieved on November 23, 2008 Read More