Instituting a Normative Ethical Principle in Guiding - Essay Example

?Normative Ethics: Ethical Dilemma 11 (Always good to have friends in politics The necessity of instituting a normative ethical principle in guiding the acts of a business enterprise is imperative because if its acts will not be prescribed by any ethical principle, business will tend to become unscrupulous in its dealings in pursuit of realizing its economic objective. Our news had been filled with corporate scandals lately that ranged from the stock manipulation of ImClone Systems stock (Sclafani, Jennifer 2009), to exotic accounting practices of Enron to Andersen’s destruction of documents it was supposed to keep. The application of ethics in business will not only provide guidelines on how should a business enterprise as an entity acts but also will clarify ambiguous ethical issues which every business entity confronts as it pursue its objective of enhancing its bottom line (Crane and Matten 2006). The case in Chapter 11 entitled Ethical Dilemma: Always good to have friends in politics? of the book of Crane and Matten (2006) presents to us a classic instance of how an unscrupulous business person deals with an equally corrupt government official. Although the case only highlights Costa’s predicament on how to deal with the mayor’s (Dionisis who also happens to be his childhood friend) insinuation of building a swimming pool in his backyard, the contractor himself is guilty of one of business unethical practice of paying bribes. Reading between the lines of the case however, the contractor’s dilemma was not really about the corrupt tendency of the mayor but his anxiety on the prospect of losing the project because the recent project presented to him has now a competitor who is agressive enough to offer Dionisis, Costa’s childhood friend and the mayor, a pool that will be built in his backyard if he gets the project. He is now disturbed not because he is about to get into an irregular business arrangement but rather felt the brunt of the cost of building the pool in Dionisis backyard. He is bothered not about ethical propriety of the mayor’s insinuation but on how he could conceal the cost of the construction of the pool in the accounting record considering that the amount is significant hence, will be obvious. Indeed Crane and Matten was right when they mentioned in their book “Business Ethics: Business ethics: managing corporate citizenship and sustainability in the age of globalization” that business ethics can be an oxymoron because the words are contradiction in terms because business, when left on its own, can be permissive to unacceptable practice such as deception and lying in its pursuit for profit (2006). The increasing awareness of the various stakeholders in society about responsible corporate citizenship however compels business to integrate ethics into its practice to earn public trust that is necessary to increase and maintain its revenue (Palazzo and Andreas 2008). The slew of corporate scandals that slid this country into recession has made the public more sensitive against business malpractice that the slightest news of corporate impropriety will have a tremendous negative impact on the company’s bottomline which will register in the value of its stocks and sales (Timonen and Luoma-aho 2010). Thus, the necessity of practicing business ethics is not only about being nice to the customers but also in consideration of the negative impact that the absence of ethics can do to a business. The application of normative ethics in evaluating a certain business dilemma is ideal because the guidelines present in normative ethical principles can serve as a beacon or a guide among business people in managing and operating their business. The application of such normative ethics in justifying and judging a certain ethical dilemma shall be illustrated in the case, the Ethical Dilemma 11: Always good to have friends in politics? whereby the ethical justification of normative decision of a certain ethical dilemma shall be applied. The normative ethics are virtue ethics, consequentialism, utilitarianism, deontological ethics and Kant’s Categorical imperative. Virtue ethics is the ideal form of ethical practice because this makes an individual or a business person to do good for the sake of doing good. Virtue ethics“emphasizes the virtues, or moral character, in contrast to the approach which emphasizes duties or rules (deontology) or that which emphasizes the consequences of actions (consequentialism)(Stanford Encyclopedia of Philosophy a 2011). While this type of normative ethic can be suggested to Costa in dealing with the mayor, the concept may be too alien for the contractor thus may be rendered futile considering how his mindset is. In the case, he was bothered about the mayor’s insinuation of building a pool in his backyard not because it is unethical but rather he find it difficult to conceal it in his accounting record not to mention the rising cost of bribing the official. Suggesting to him to become virtuous as what the normative virtue ethical principle posits is plainly not workable. Costa ise susceptible to utilitarianism in evaluating a certain ethical dilemma because it characterizes his value system. Utilitarianism is the view that “the morally right action is the action that produces the most good” (Stanford Encyclopedia of Philosophy b 2011) and this defined Costa’s relationship with Dionisis. It is important to note that while Dionisis is Costa’s childhood friend, their discussion did not revolve about their youth but rather on the municipality’s projects so he can fit his bid to them. He also cultivated dependency on the mayor when he sends somebody to fix anything that is broken in the mayors’ house. Costa also bribes his friend in a form of a gift by covering the catering of Dionisis 50th birthday. So when Dionisis insinuated for a pool to be built in his backyard, Costa is part to be blamed because he created the slippery slope of corrupton where irregularity starts from seemingly harmless gift to big time bribes (Lode 1999) Realistically, consequentalism may be the normative ethics that would work for Costa in the case. Consequentialism holds that the “rightness of acts. . . depends only on the consequences of that act or of something related to that act” (Stanford Encyclopedia of Philosophy c 2011). Costa was bothered by Dionisis insinuation not because of its impropriety of the act but because of the anxiety of losing the project. If he will not build the pool for Dionisis, the competing contractor who brought up the idea will build it for Dionisis thus taking the project away from him. If he gives in, Costa knew that it would benefit his business and the only problem that he has to deal with is how to hide its cost and what will his employee say or think about the transaction. Giving in to Dionisis may be profitable to Costas in the short-term but Costas has to think about its pros and cons in the long-haul. Costas may profit today but if the government regulators will catch him which is very likely to happen because the pool is just very obvious to hide. One of his employees may also report him to the authorities and that would be more costly to him because of the fines that may be imposed and worst, his business may be closed. Andersen Consulting suffered the same fate of closing shop after it got involved in the Enron scandal. The profit that Costas may derive from the transaction that involves the building of the pool can easily be defrayed by the ill consequences of this corrupt transaction. He should not build the pool and should tell Dionisis directly and state his reason why. It is now high time for Costas to stop involving in corrupt practices before the law catches on him. In addition, the cost of doing business with Dionisis is already getting atrocious that it would be no longer profitable to deal with him. Dionisis is getting greedy and it is eating up his margin with business getting less profitable while the risk is getting high. Dionisis may award the next project to the competing contractor and cut his friendship, but this will do Costas more good in the long-run. Yes he may lose the project but he saved his company from being entangled in a transaction that has the potential cost of losing his reputation and even business in the future. The profit and friendship forgone can be regained when customer’s trust Costas more as more people will contract his services because they know he can be trusted. Having a good customer base who patronizes Costa’s business because of his service and integrity is more reliable source of revenue than relying on the awarding of projects of Dionisis which is not only precarious, but also costly not to mention risky. In the final analysis, it is really the market that will determine the profitability and sustainability of a business. Having friends in politics may be good for a business in the short run but it can do more harm in the long-term. Instead of kowtowing to Dionsis, Costa should spend his energy to make his business efficient and cost-effective beating all his competitors because of his quality and price. This will guarantee him that his business will still be around even if Dionsis term as a mayor has already lapsed. Bibliography Crane, Andrew; Matten, Dirk (2006). Business Ethics, 2nd edition, Oxford: Oxford University Press. Lode, Eric (1999). “Slippery Slope Arguments and Legal Reasoning”. California Law Review 87(6):1469-1543. Palazzo, Guido; Scherer, Andreas Georg (2008). Corporate Social Responsibility, Democracy, and the Politicization of the Corporation.. Academy of Management Review, 33(3): 773-775 Sclafani, Jennifer (2009) Martha Stewart behaving Badly: Parody and the symbolic meaning of style. Journal of Sociolinguistics, 13(5):613-633. Stanford Encyclopedia of Philosophy a (2011). Virtue ethics. Online. Retrieve at http://plato.stanford.edu/entries/ethics-virtue/ [accessed February 25, 2012). 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