Ethics in Business as an Important Requirement in Everyday Requirement - Case Study Example

Ethics in Business Name Institution Name Date Table of Contents Table of Contents 2 Executive Summary 3 Section 2: Body 5 Case Study Questions 5 The Most Important Stakeholder 5 Impartiality of BBB 6 Prevention of “Pay for Play” 7 Group Assignment Questions 7 What are the key ethical challenges facing businesses on the 21st century? Why? 7 What recommendations would you make to companies (such as in your case) to improve and create a more ethical culture? 9 Section 3: Conclusion 12 References 13 Executive Summary Ethics is an important requirement in every day requirement. Ethics in business is also important but there instances of dilemma. For example, an organisation weighs between what is right from what is wrong. Businesses should integrate ethics into how the business operates. BBB plays a crucial role in ensuring the information presented is authentic and complaints are addressed promptly. The main stakeholders of BBB are consumers because the customers present complaints and support and also consume products and services produced by different organisations. BBB should also be impartial but currently BBB is not impartial. It does not adhere to its aims and objectives exhaustively and in the right manner based on its vision and mission requirements. For example, BBB favours some organisations relative to other organisations because of the status of the company. Therefore, BBB should restructure and ensure it adheres to operational requirements. BBB should restructure on how to bring new clients rather than the current approach they use especially in the case of Los Angeles. Corruption and other unethical behaviours are associated with how the businesses operate and should be rectified promptly. Ethics is an important requirement and should be integrated into 21st century business. Some of the challenges include transparency, accountability, discrimination, influence of technology and other challenges. Organisations should change these challenges into avenues of ensuring the organisations adhere to rules and requirements crafted from ethics. Section 1: Introduction Organisations and companies operate based on clearly defined principles and philosophies. However, the legislations differ based on industries in that legislation might not be applicable to another industry. The most important legislative or business requirement is that of ethics. Ethics also called moral philosophy involve systematisation, defence and recommendation of concepts that defines right and wrong conduct. It is the expectation of doing right from wrong and ensuring adherence to moral principles. Businesses have to adhere to certain ethics that are specific to their situation and circumstances; for example, the ethics that governs motor industry and completely different from ethics that cover food and beverage industry. The paper discusses three questions from the case study of Better Business Bureau (BBB). It elaborates on some of the ethical considerations that BBB should have adhered. The second part discusses two questions, which are application of ethics to a 21st century business and recommendations to a business on how to embrace ethical requirements. Section 2: Body Case Study Questions The Most Important Stakeholder In any business, consumers are the most important stakeholders. Stakeholders comes in different forms and in the case of BBB, the stakeholders includes corporate, executives, agencies and other interested parties. In the case of BBB, the most important stakeholders are the consumers. Business that are financing the activities of BBB through subscriptions might be seen as the important stakeholders since they fund the BBB and also BBB have to analyse these businesses in terms of transparency, accuracy, and openness. In addition, the businesses offer resources that consumers use in their day to day activities. It means the consumers are supposed to utilise these products and services before they present their complaints or ratings. If the customers do not complain, BBB will not have activity to accomplish and therefore, the customers’ views are integral to the success of BBB. Furthermore, the definition of customer in this perspective should be analysed. Consumers come in different forms and an organisation can be a consumer to another organisation and a single individual can be a consumer to another company. Businesses also cannot benefit from BBB without the contribution of customers. For example, reviews presented by the customers will be reviewed by BBB and determine the rating of a company. The high ratings will be utilised by a company for public relation purposes. The ratings are for branding and creating a positive image. Therefore, the businesses that pay subscriptions to BBB require the support of consumers to succeed. Bad publicity from the customers means the business would go down and lack of financing from the business towards fulfilling the requirements of BBB. Impartiality of BBB Impartiality of a business or any other organisation is determined by revenue streams and sometimes the nature of the business determines whether are impartial or not. BBB is not impartial. It is attributed on two important factors or approaches towards fulfilling its obligations. BBB cannot operate without the support of payments from the businesses that they are supposed to oversee. The success of the business means that BBB would continue generating revenues that would support their operations and without the financial support, BBB could not exist. For example, if BBB adheres to the policies and regulations that business should follow without flexibility, it means that most business would close shop and reduction of revenues would limit its operations. In addition, reasons should exist for organisations to invest in BBB. For example, some of the reasons are image, brand and public relations and if these components are not achieved a business may decided to opt out. Therefore, BBB is flexible in implementing regulations and policies to create a reason why the business should work with BBB. BBB is also impartial on how it treats non-members. The members are treated favourably especially those businesses that are associated to managers of BBB. For example, some companies that operate businesses that are fishy or do not exist receive ratings of A-. Conversely, those businesses that are operating with excellent customer services receive bad publicity and negative review of F. From these analyses, it is evident that BBB is not impartial and the regulations and policies should be changed to ensure the non-profit organisation fulfils effectively its objectives and aims. Prevention of “Pay for Play” BBB approach in attracting new members into BBB is wrong. For example, 45% commission for sales person who sold first year membership is not a viable approach towards attracting new members. In addition, it would disadvantage some of the employees who were unable to bring in new members. Therefore, the reward system should be changed and a new strategy developed to avoid “pay for play” issue. An example of such strategy is based on pitching of memberships. In addition, all the employees should be compensated without basing on the pay only but also the contribution of the individual into the entire team. It means teams should be created and the benefits should be taken by the entire rather than a single individual. This strategy would allow team work, which is important to the success of any organisation. Group Assignment Questions What are the key ethical challenges facing businesses on the 21st century? Why? Even though some of the ethical challenges are specific companies within certain industries or companies, other ethical type issues are relevant to all companies. For the companies, handling ethical decisions prudently is important and crucial to the success for the business (Hartman, DesJardins & MacDonald, 2008). However, if the ethical decisions are made unwisely, the business can be affected immensely. The section discusses some of the common ethical challenges that are relevant to most businesses. One of the major concerns in how the business managers manage employees expenses when it comes to health and safety interests. For example, workplaces such as manufacturing plants in which employees frequently use dangerous tools or sometimes engage in physically demanding tasks requires safety and healthy consideration (Hartman, DesJardins & MacDonald, 2008). The health and safety requirements should fulfil the federal or state requirements but the structures in place should be able to eliminate accidents. Moreover, standard office workplaces are also risky since employees sometimes are required to stand or sit for long. Sometimes, some businesses decide to cut corners on training, equipment and safety controls with the aim of saving costs. This approach is potentially damaging and unethical in instances of occurrence of accidents. Technology is also another issue that affects the way business operates in perspective of ethical consideration especially due to the growth of Internet and other technological means in the early 21st century. The business leaders have to weigh or balance the freedom and privacy of employees and at the same time maintain standards that are crucial for the company technology to legitimise its business purposes (Hartman, DesJardins & MacDonald, 2008). Instances exist whereby some businesses monitor all email and online use communication from the workers computer and other work related accounts. Critics may argue the business has the right to snoop into these accounts but the business should chances exist concerning autonomy and privacy among employees. Numerous accounting scandals and prominent businesses are supposed to operate with transparency and openness. In the case of corporations that are public, it includes complete, accurate and honest reporting based on financial accounting and reports (Nicholson & DeMoss, 2009). In the case of small and large businesses, the transparency includes communication messages that incorporate marketing messages that are accessible by to the public and may be interpreted differently. The messages should be clear and it is a representation of the company intentions and expectations (Holjevac, 2008). In most business, when found lying or avoidance of full disclosure would mean dire consequences to the reputation of the business. Transparency is crucial to the success of any business whether government, small or big business. Businesses are supposed to create an environment of fair working conditions for their workers. Treating employees fairly or create a fair working conditions would me higher resource utilisation and higher labour costs: many businesses are against utilising resources, which means providing fair working conditions is not viable. Benefits and fair pay for the employees are some of the common elements of fair workplace. Furthermore, the business environment should be non-discriminatory that has additional costs involved in ensuring training and diversity management. In general, ethics is crucial to the success of any business but the level of ethical requirements differs because of the industry in which the business operates. However, some of the important and common ethical requirements include health and safety, technology, transparency, and fair working conditions. Hence, businesses should devise strategies and approaches to ensure the business operates within the standards of ethical requirements. What recommendations would you make to companies (such as in your case) to improve and create a more ethical culture? Business should create a culture of responsibility rather than with the aim of maximising or capitalising on profits at all cost (Kurpis, Beqiri & Helgeson, 2008). However, this approach cannot fulfil the requirements of other industries such as the banking whereby social benefits are merely considered rather economic profits. The social function that can be fulfilled by the banks is ensuring the deposits are stored accordingly and are available to the depositors and facilitate other social requirements such as loans with the purpose of allowing the borrowers to generate wealth. The aspect of social impact was used by governments to bail out banks during the financial crisis (Jalil, Azam & Rahman, 2010). The banking sector is an example and there other industries that peg their responsibility on the nature of business it operates. The business should be able to explain any information and operate in a transparency manner. Many businesses have defined regulations and framework of informing about the business and health status of the business (Parker, Rosen & Nielsen, 2009). For example, accounting standards are in place to determine the financial status of a company or business while the same records are used for tax related transactions. Each business should adhere to the directives of such standards in ensuring transparency and openness is encouraged (Scherer & Palazzo, 2008). Moreover, it is crucial to communicate in a manner that is unambiguous were by the recipient understands the requirements of the message and can act based on the message. The aspect also applies to the way top management communities with other employees and vice verse. A business operates when all the employees are safe and healthy. Frequent sick offs and lack of motivation affects the way employees accomplish different activities or tasks (Freeman, Stewart, & Moriarty, 2009). The business should create an environment that fulfils the requirements of safety and health requirements. Across the world and based on industry, there are different levels requirements of safety and health and each business should adhere with these regulations (Evans & Weiss, 2008). Therefore, no business can operate optimally without considering and championing safety and health requirements (Waples et al., 2009). In addition, technology is inherent in today’s economy and business. The use of technology is not only within the use of the technology itself but information contained within the technologies. Many organisations supervise the workings of employees over Internet while others snoops information that passes through the Internet (Robin, 2009). The business should prevent abuse of employees’ information and the business should understand and appreciate privacy and confidentiality of the employees. Due to globalisation, most information are stored online and contain personal information of the customers and other stakeholders (Ferrell & Fraedrich, 2014). It is important for these businesses to understand the importance of the information stored, prevent the information from access by unauthorised persons whether within the business or outside the business. For examples, unauthorised employees may access customer information and utilise the information to their advantage while at the same time, hackers may utilise the information for their person gains. Hence, business should guarantee the security of information stored in their technologies. Discrimination, diversity and fair working are also crucial to fulfilling the ethical requirements of a business. Businesses should appreciate benefits associated with diversity since a diverse working employees are an asset to a business (Crane & Matten, 2010). Diversity comes handy with discrimination since discriminations such as sexual abuse and other workplace abuses impacts negatively the business (Brooks & Dunn, 2011). Fair working environment includes salary, wages and other benefits that are important to employees’ workings. Hence, business should appreciate diversity and fair working environment to become successful. In general, businesses should appreciate the benefits of embracing frameworks that appreciate and champion ethical requirements (Griseri & Seppala, 2010). Transparency both to the employees and consumers ensures respect and trust to the business, which translates to additional revenues to the business. Moreover, laws have been created against discrimination and businesses should adhere to these policies to avoid litigation and other challenges associated with breaking of these laws (Kaptein & Schwartz, 2008). The businesses should embrace technology but create structures and frameworks in which personal, private and confidential information cannot be accessed by unauthorised persons (Fassin, Van Rossem & Buelens, 2011). Section 3: Conclusion Ethics is an important requirement but is applicable to different industries differently. From the BBB case study, numerous ethical issues exist in which it should be rectified to ensure the non-profit organisation operates effectively. BBB should understand customers are the most important stakeholders since they play a crucial role in the value chain of the business. Since without customers, business would not be able to operate meaning loss of revenue to BBB. In addition, BBB is not impartial because it favours businesses especially those that have membership. BBB should change the rewarding systems to prevent future complications and for critics to have trust with the organisation. In the 21st century, ethics guides the businesses towards achieving required goals. However, some of the ethical challenges include technology, transparency, discrimination and health and safety. The recommendations for a company to succeed in terms of ethics should embrace some of the following components that include health and safety, discrimination, transparency and technology. References Brooks, L. J., & Dunn, P. (2011). Business & professional ethics. Cengage Learning. Crane, A., & Matten, D. (2010). Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press. Evans, F. J., & Weiss, E. J. (2008). Views on the importance of ethics in business education. Advancing business ethics education, 43-66. Fassin, Y., Van Rossem, A., & Buelens, M. (2011). Small-business owner-managers’ perceptions of business ethics and CSR-related concepts. Journal of Business Ethics, 98(3), 425-453. Ferrell, O. C., & Fraedrich, J. (2014). Business ethics: Ethical decision making & cases. Cengage Learning. Freeman, R. E., Stewart, L., & Moriarty, B. (2009). Teaching business ethics in the age of Madoff. Change: The Magazine of Higher Learning, 41(6), 37-42. Griseri, P., & Seppala, N. (2010). Business ethics and corporate social responsibility. Cengage Learning. Hartman, L. P., DesJardins, J. R., & MacDonald, C. (2008). Business ethics: Decision-making for personal integrity and social responsibility. New York, NY: McGraw-Hill/Irwin. Holjevac, I. A. (2008). Business ethics in tourism–as a dimension of TQM. Total Quality Management & Business Excellence, 19(10), 1029-1041. Jalil, M. A., Azam, F., & Rahman, M. K. (2010). Implementation mechanism of ethics in business organizations. International Business Research, 3(4), P145. Kaptein, M., & Schwartz, M. S. (2008). The effectiveness of business codes: A critical examination of existing studies and the development of an integrated research model. Journal of Business Ethics, 77(2), 111-127. Kurpis, L. V., Beqiri, M. S., & Helgeson, J. G. (2008). The effects of commitment to moral self-improvement and religiosity on ethics of business students. Journal of Business Ethics, 80(3), 447-463. Nicholson, C. Y., & DeMoss, M. (2009). Teaching ethics and social responsibility: an evaluation of undergraduate business education at the discipline level. Journal of Education for Business, 84(4), 213-218. Parker, C. E., Rosen, R. E., & Nielsen, V. L. (2009). Two Faces of Lawyers: Professional Ethics and Business Compliance with Regulation, The. Geo. J. Legal Ethics, 22, 201. Robin, D. (2009). Toward an applied meaning for ethics in business. Journal of Business Ethics, 89(1), 139-150. Scherer, A. G., & Palazzo, G. (Eds.). (2008). Handbook of research on global corporate citizenship. Edward Elgar Publishing. Waples, E. P., Antes, A. L., Murphy, S. T., Connelly, S., & Mumford, M. D. (2009). A meta-analytic investigation of business ethics instruction. Journal of Business Ethics, 87(1), 133-151. Read More

Businesses have to adhere to certain ethics that are specific to their situation and circumstances; for example, the ethics that governs motor industry and completely different from ethics that cover food and beverage industry. The paper discusses three questions from the case study of Better Business Bureau (BBB). It elaborates on some of the ethical considerations that BBB should have adhered. The second part discusses two questions, which are application of ethics to a 21st century business and recommendations to a business on how to embrace ethical requirements.

Section 2: Body Case Study Questions The Most Important Stakeholder In any business, consumers are the most important stakeholders. Stakeholders comes in different forms and in the case of BBB, the stakeholders includes corporate, executives, agencies and other interested parties. In the case of BBB, the most important stakeholders are the consumers. Business that are financing the activities of BBB through subscriptions might be seen as the important stakeholders since they fund the BBB and also BBB have to analyse these businesses in terms of transparency, accuracy, and openness.

In addition, the businesses offer resources that consumers use in their day to day activities. It means the consumers are supposed to utilise these products and services before they present their complaints or ratings. If the customers do not complain, BBB will not have activity to accomplish and therefore, the customers’ views are integral to the success of BBB. Furthermore, the definition of customer in this perspective should be analysed. Consumers come in different forms and an organisation can be a consumer to another organisation and a single individual can be a consumer to another company.

Businesses also cannot benefit from BBB without the contribution of customers. For example, reviews presented by the customers will be reviewed by BBB and determine the rating of a company. The high ratings will be utilised by a company for public relation purposes. The ratings are for branding and creating a positive image. Therefore, the businesses that pay subscriptions to BBB require the support of consumers to succeed. Bad publicity from the customers means the business would go down and lack of financing from the business towards fulfilling the requirements of BBB.

Impartiality of BBB Impartiality of a business or any other organisation is determined by revenue streams and sometimes the nature of the business determines whether are impartial or not. BBB is not impartial. It is attributed on two important factors or approaches towards fulfilling its obligations. BBB cannot operate without the support of payments from the businesses that they are supposed to oversee. The success of the business means that BBB would continue generating revenues that would support their operations and without the financial support, BBB could not exist.

For example, if BBB adheres to the policies and regulations that business should follow without flexibility, it means that most business would close shop and reduction of revenues would limit its operations. In addition, reasons should exist for organisations to invest in BBB. For example, some of the reasons are image, brand and public relations and if these components are not achieved a business may decided to opt out. Therefore, BBB is flexible in implementing regulations and policies to create a reason why the business should work with BBB.

BBB is also impartial on how it treats non-members. The members are treated favourably especially those businesses that are associated to managers of BBB. For example, some companies that operate businesses that are fishy or do not exist receive ratings of A-. Conversely, those businesses that are operating with excellent customer services receive bad publicity and negative review of F. From these analyses, it is evident that BBB is not impartial and the regulations and policies should be changed to ensure the non-profit organisation fulfils effectively its objectives and aims.

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