Business Ethics in an Organization - Essay Example

Business Ethics in an Organisation Introduction The extent to which ethical issues are being properly managed within any type of an organization canfairly easily be determined by exploring a number of specific factors, each of which are discussed within the following context of this assignment (Fisher and Lovell, 2006). The purpose of this paper is to, starting with a very brief background, select an organisation (could be a company or other organisation in the private or public sector) and critically evaluate its performance in relation to the key principles and approaches to business ethics. Background The organisation that was chosen for the purposes of this assignment is the global for-profit education giant known as Career Education Corporation. According to their website, "Since it was founded in 1994, CEC has progressed rapidly toward the goal of becoming the world's leading provider of quality educational services. CEC is the world's largest on-campus provider of private, for-profit postsecondary education and has a rapidly-growing presence in online education" (Career Education Corporation, 2008, pg. 1). Career Education Corporation has more than 95,000 students worldwide and is made up of a number of different, well-recognized, and widespread brand names of colleges, schools, and universities. Their main specialty is offering career-oriented degrees to their students in a short period of actual classroom time. "The 80-plus campuses that serve these students are located throughout the U. S., Canada, France, the United Kingdom, and the United Arab Emirates and offer doctoral, master's, bachelor's, and associate degrees and diploma and certificate programs. Approximately one third of students attend the web-based virtual campuses of American InterContinental University Online and Colorado Technical University Online" (Career Education Corporation, 2008, pg. 1) As mentioned above, Career Education Corporation operates under a number of brand names that span the entire globe, including the online environment. "Those brands include, among others, the Le Cordon Bleu schools of North America; the Harrington School of Design; the Brooks Institute; the Katharine Gibbs schools; American InterContinental University; Colorado Technical University and Sanford Brown" (Career Education Corporation, 2008, pg. 1). The company proudly displays its mission on its main website, claiming that, "The mission of CEC, through its schools, its educators, and its employees is education-their primary goal, to enable students to graduate successfully and pursue rewarding careers." Their mission statement itself declares, "We are a dynamic educational services company committed to quality, career-focused learning led by passionate professionals who inspire individual worth and lifelong achievement" (Career Education Corporation, 2008, pg. 1). Ethics In order to understand how an organization adheres to business ethics in values, it is first important to understand what those are. In this section, perspectives on business ethics and values, ethical issues in business, ethical theories and how to use them, personal values in the workplace, individual responses to ethical situations, corporate responsibility, corporate governance, corporate citizenship, sustainability and the responsible corporation, ethical conformance: codes standards, culture, leadership, and citizen power, global and local values and international business, and ethics in practice will be covered in detail (Fisher and Lovell, 2006, Ambrose and Schminke, 1999 and Boyle, 1990). According to Wikipedia, "Business ethics is a form of the art of applied ethics that examines ethical principles and moral or ethical problems that can arise in a business environment. In the increasingly conscience-focused marketplaces of the 21st century, the demand for more ethical business processes and actions (known as ethicism) is increasing. Simultaneously, pressure is applied on industry to improve business ethics through new public initiatives and laws (e.g. higher UK road tax for higher-emission vehicles)." (Wikipedia, 2008, pg. 1). Business ethics encompasses a wide array of concepts. These include corporate social responsibility, fiduciary responsibility, stakeholder responsibility, shareholder responsibility, ethical issues such as industrial espionage and hostile takeovers, leadership issues such as corporate governance, political contributions, law reform, corporate abuse, corporate crimes, and the abuse of corporate ethics policies, creative accounting, earnings management, misleading financial analysis, insider trading, securities fraud, bucket shop, forex scams, executive compensation concerns, bribery, kickbacks, facilitation payments, scandals, discrimination, union busting, strike breaking, employee privacy, whistle-blowing, slavery, employment law, indentured servitude, occupational safety and health, manipulative marketing, media ethics, price fixing, price discrimination, price skimming, anti-competitive practices, antitrust law, greenwash, bait and switch, shill, viral marketing, spam, pyramid schemes, planned obsolescence, attack ads, subliminal messages, false advertising, selling defective or dangerous products, environmental harm, new technology ethics, product testing ethics, infringement on patents or copyrights or trademarks, misuse of intellectual property, employee raiding, and bioprospecting (Wikipedia, 2008; Grace, 2006; Ludlum and Moskaaloinov, 2005; and Morgenson, 2006). There are certain international business ethics as well that should always be adhered to when a company does business on a global scale. These include, "The search for universal values as a basis for international commercial behavior, comparison of business ethical traditions in different countries, comparison of business ethical traditions from various religious perspectives, ethical issues arising out of international business transactions; e.g. bioprospecting and biopiracy in the pharmaceutical industry; the fair trade movement; transfer pricing, issues such as globalisation and cultural imperialism, varying global standards - e.g. the use of child labour, the way in which multinationals take advantage of international differences, such as outsourcing production (e.g. clothes) and services (e.g. call centres) to low-wage countries, and the permissibility of international commerce with pariah states (Wikipedia, 2008, pg. 2; Swanson, 2005; and Vickers, 2005). Theoretical issues in business ethics include conflicting interests and ethical issues and approaches. Many people think of something a little more when it comes to business ethics, including theorists. These individuals "contend that a business has moral duties that extend well beyond serving the interests of its owners or stockholders, and that these duties consist of more than simply obeying the law. They believe a business has moral responsibilities to so-called stakeholders, people who have an interest in the conduct of the business, which might include employees, customers, vendors, the local community, or even society as a whole" (Wikipedia, 2008, pg. 2 and Taylor, Kazakov, and Thompson, 1997). Many companies have developed ethics policies, and Career Education Corporation is no exception. According to their code of ethics, "Career Education Corporation (the "Company") is committed to conducting its business in compliance with all applicable laws and regulations and in accordance with high standards of business conduct. The Company strives to maintain the highest standards of accuracy, completeness and disclosure in its financial dealings, records and reports. These standards serve as the basis for managing the Company's business, for meeting the Company's duties to its stockholders and for maintaining compliance with financial reporting requirements. This Code of Ethics operates in addition to and supplements the Company's Employee Handbook" (Career Education Corporation, 2008, pg. 1). However, not everyone agrees with their claims. Ethical Dilemmas within the Organization Recently, the company has found itself in the spotlight facing alleged claims. They were investigated by the Justice Department for these claims. The company was accused of "overstated enrolment and manipulated financial statements" (Morgenson, 2006, pg. 1). The company declined to comment on these allegations. The company has definitely faced problems in the legal and regulatory fields lately. They are, however, cooperating with all investigations and maintaining that they have done nothing wrong. The company's recruitment practices and whether or not the needs of its students are being met are also under investigation. "California regulators have said that some high-pressure sales representatives at one school misled students on potential job opportunities and career placement services" (New York Times, 2004, pg. 1). According to Brown (2004), "In the last year, the Career Education Corporation of Hoffman Estates, Ill., has faced lawsuits, from shareholders and students, contending that, among other things, its colleges have inflated enrollment numbers. The company, which said it considered the suits groundless, acknowledged that it was under investigation by the Justice Department and the Securities and Exchange Commission. It declined to say what the federal officials were investigating. The Justice Department and S.E.C. declined to discuss this or any other active investigation" (pg. 1). Possible Ways to Manage and Resolve the Dilemmas and Conclusion Declining to comment on these allegations may avoid admitting guilt, but it also makes a company look very guilty. The company should carefully word press releases that defend themselves and, most importantly, remain ethical in all of their best dealings. Earning a negative reputation like they have is going to take some time to undo, but it can be done with the proper planning and management. Sometimes, people come first. This is especially true for those businesses who want continuous and/or repeat customers. Also, according to Wikipedia, "To be successful, most ethicists would suggest that an ethics policy should be: Given the unequivocal support of top management, by both word and example, explained in writing and orally, with periodic reinforcement, doable....something employees can both understand and perform, monitored by top management, with routine inspections for compliance and improvement, backed up by clearly stated consequences in the case of disobedience, and remain neutral and nonsexist" (Wikipedia, 2008, pg. 4). References 'About CEC', 2008. Career Education Corporation. [Online] http://www.careered.com/about.aspx Ambrose, M.L. and M. Schminke, 1999. 'Sex differences in business ethics: The importance of perceptions', Journal of Managerial Issues, Vol. 11. Boyle, P., 1990. 'Business ethics in ethics committees' The Hastings Center Report, Vol. 20. Brown, E., 2004. "Can for-profit schools pass an ethics test' New York Times. [Online] http://www.nytimes.com/2004/12/12/business/yourmoney/12school.html 'Company news; Justice Department is investigating Career Education', 2004, New York Times. [Online] httTop of FormDel.icio.ushttthp://query.nytimes.com/gst/fullpage.htmlres=950DE1DF1031F930A3575AC0A9629C8B63 Fisher, C. And Lovell, A., 2006. 'Business ethics and values; Individual corporate and international perspectives, 2nd ed. FT/Prentice Hall. Grace, D., 2006. 'For business ethics', Australian Journal of Management, Vol. 31. Ludlum, M.P. and S. Moskaaloinov, 2005. 'Russian student views on business ethics: Post-Enron', College Student Journal, Vol. 39. Morgenson, G., 2006. 'Can a for-profit college learn a lesson' New York Times. [Online] http://select.nytimes.com/2006/05/07/business/yourmoney/07gret.html Swanson, D.L., 2005. 'Business ethics education at bay: Addressing a crisis of legitimacy', Issues in Accounting Education, Vol. 20. Taylor, T.C.; A.Y. Kazakov; and C.M. Thompson, 1997. 'Business ethics and civil society in Russia', International Studies of Management and Organization, Vol. 27. Vickers, M.R., 2005. 'Business ethics and the HR role: Past, present, and future', Human Resource Planning, Vol. 28. Read More