Business Ethics Principles - Essay Example

Business Ethics Introduction Business ethics include principles and values used to conduct the activities of an organization and manage the workforce. They can be used to rectify any problems occurring in an organization. They apply to different operations of a business; they include international business ethics, strategy and ethics, corporate governance, stakeholder theory, ethics of finance, ethical issues in pricing, corporate citizenship and sustainability. According to the task, these ethics can be explained in many different theories of ethics that include virtue ethics, rationality, utilitarianism, communitarianism, social ethics and normative ethics. Hence, international business ethics and corporate governance can be explained in various ways (Casson 95). International Business Ethics These entail rules and regulations set forth to control the business between countries in the world in order to enhance trade between them, bringing out globalization. Globalization diminishes the set barriers between countries on the globe for trade to occur smoothly. Examples of transactions that fall within the ambit of international business ethics include fair trade movement and transfer pricing. The factors looked at to come up with significant international business ethics include the exchange rates, economic growth and rates, working environment, the government control involved and the social ethics involved (Casson 97). International corporations operating in host countries may be perplexed by the customs, rules and laws of the country, some of which conflict with cultural guidelines of their home states. This presents numerous ethical complexities universally; for example, the certain governments’ expectations. Different employees in the many departments in a foreign culture cannot be accorded same salary standards and promotional standards as the ones back home. This is due to different working conditions and environments in the different countries, and also various rules and regulations in conducting business in different countries. For example, economic status of developed countries tends to differ with that of developing countries and the currencies of countries have different values (Casson 97). Various theories of ethics involved include rationality, social ethics and communitarism. Rationality This is a concept used in business, which involves the reasoning of people involved in a business with the motive of solving a problem or achieving a goal in business. As noted by Casson, in international business, the concept of bounded rationality is a key element in the transaction cost theory version of Williamson’s (1975). It also underpins the Hedland’s (1993) arguments that favor the network firm (Casson 98). Various countries’ representatives come together and discuss certain issues affecting international trade and come up with certain guidelines, which benefit each and every player involved in the international business. The various issues discussed include the exchange rates of different currencies of all world countries. In addition, there has been the formation of various organizations that maintain stability of the different world currencies. These include the World Bank and the International Monetary Fund, which assist countries in maintaining a superior economic position and help in times of economic crisis (Casson 98). Social ethics These include the appropriate behaviors of certain peoples as a whole, especially with regard to their different perspectives on things and beliefs in their various cultures. In such societies, the current principles and values dictate how people should act and deal with one another by setting certain behaviors or standards that should be followed by members of society. Factors considered within social ethics include language, race, gender, culture, religion and education, among others. In international business, social ethics is a vital issue as various countries have different cultures and education backgrounds. Certain standards and principles have to be set to allow for agreeable business between countries without conflicts with the respective countries’ laws and regulations in business (Casson 100). Communitarianism This refers to a theoretical perspective, which aims at lessening the focus on the rights of individuals and becoming more focused on the responsibilities of the entire community. There tends to be various definitions of the term community; for instance, it can refer to the nuclear or extended family or even the entire nation. While using this approach, ethical thought tends to focus on established social standards, traditions, communal values, as well as the considerations for the entire society (Casson 102). Communitarians place a lot of emphasis on the influence that society has on individuals; they also argue that common history and tradition tend to the basis of values. It recognizes society as a set of intersecting communities with differing moral values and standards and need for certain common principles applying to different communities enabling them to act together. Communitarianism perspective in international business emphasizes strong connections between different communities, collaborations, diminished individualism in different countries and sacrifice in order to achieve a common set of global and local values (Casson 102). Corporate governance This includes the way of running, controlling and directing a business company. It involves the regulations, market mechanisms and the roles and relationships between a company’s management and its shareholders and its goals. A company achieves complete corporate governance by setting ways to go about processes, customs, policies, laws and institutions to be followed in learning a Corporation. This outlines the ways in which business is to be run, its transparency and how people involved in its various stages should be treated and what their responsibilities are. Various ethical theories involved include virtue ethics, utilitarianism and ethics of care (Casson 103). Virtue ethics This emphasizes the role and character of certain individuals carrying out certain actions. In corporate governance, it emphasizes the roles played by different players in a company; they include shareholders, stakeholders, executives, employees, directors, debtors, creditors, suppliers, customers and communities affected by the Corporation’s activities. It ensures that every player is accountable for their actions in the business and also each one of them fulfils his or her role. It brings out the rules and ways on how to conduct their activities in the business and how to work to develop the business and allow for attractive output and prevent accounting fraud and corruption (Casson 103). Utilitarianism This refers to a theoretical explanation of a way to perform tasks in order to come up with the desired results. This is like a way of planning a production process in order to produce a certain product with a set of required properties. Corporate governance brings out utilitarianism by setting standards and principles to bring about certain set results in a business. A corporation clearly outlines the guidelines to be followed by each and every player of business; this helps in the realization of the set goals. Also, a business outlines its value and utility to the community involved at large and ensures it is followed and established (Casson 104). Ethics of care This entails a theoretical approach bringing out the ethical and dishonest practices in a business. Corporate governance outlines the rules and regulations of a company. It outlines the ways followed to achieve a set of goals and also outlines crimes that can be committed while pursuing the various goals. These involve getting high profits by running a business legally without involvement in illegal activities such as corruption, bribes, deceptive advertising and violation of corrupt practices and acts within a business. Business leaders should consider that the greatest danger to the organizations does not lie in discovering or exposing any serious misconduct or illegal activities that may be lurking. This ensures that corporations are run with transparency, fairness, openness and honesty dealings of the employees, directors and management. This ensures that the business is run within the given laws and regulations and also within the governmental statutory instruments (Casson 105). Works Cited Casson, Mark. Economics of International Business: A New Research Agenda. London: Edward Elgar Publishing, 2000. Print. Read More