BUSINESS ETHICS AND THEIR INPACT ON BUSINESS COMMUNICATION - Essay Example

? “BUSINESS ETHICS AND THEIR INPACT ON BUSINESS COMMUNICATION” The hub of this paper is to know about the ethical codes of business and the importance of ethical practices in the real life. It also gives a brief idea on how to implement required ethical practices in business organizations? It has been rationally proved that practice of ethics within business organizations helps a lot creating constructive interaction with other organizations customers. Descriptive and analytical research methodology is applied in this research paper. The findings of paper are purely based on a code of business ethics which should be implemented in every single organization in objective and effective way. The subject of Ethics is from the subject of Philosophy. It is liable to addresses questions about morality and no doubt it is an important part of every one’s life. There are two levels of ethics; theoretical and applied ethics. Business ethics is one of the most imperative parts of the applied ethics. In this paper, I will try to discuss some of the major ethical philosophies that are applied to business ethics such as teleological ethics, utilitarianism, egoism, deontological ethics, etc. The purpose of this study is to represent which ethical approach is appropriated in business. Keywords: Ethics, Business Organizations, Code of Ethics, Ethics in business, Communication, Ethical theories. Introduction Governments of all countries of the world have either prepared a strong code of business ethics for the organizations to follow these codes to deal with the customer and to handle the daily activities of organization, or they ask business entities to schedule their own code of business ethics to implement it but this code of ethics must be within the rules and laws made by the government of that country. But the best method among these two is that government should itself prepare a strict code of ethics for the business entities to follow with the consultation of the association of business organizations. In this way, government will be allowed to look after the ethical affairs of business and to ask them to follow those ethical principles effectively, strictly and completely (Jalil, Azam, & Rahman, 2010). As the most brilliant creator of the Lord, we live to progress, to grow and to move ahead. All of us are in an age of innovation, where the free markets are getting rapid growth, and so the economy of the entire world. Latest technological products, roles of the government bodies, and every person on this globe is facing new challenges, exploring new opportunities for making growth, facing the demands from public and bearing the limitation. Most of the people are working to make their life error free and nations are working collectively having an aim of spreading freedom and democratic principles; to look after the free markets of the economy, to protect the individual’s rights, and to encourage respect for human rights, the rule of law, and the environment (Siltaoja & Lamsa, 2011). Every person wants to live in a good and well mannered society and this why a majority of people is worry about the ethics within the society. Any organization is related to each individual of the society and the entire economy. Behavior of an individual is a central to the business life and ethical principles have an important influence on individual’s behavior. For that reason, it is clear that the entire business is influenced by the individual’s behavior. Now each of the organization has completely or partially prepared their own code of ethics (Gulcan, 2011). Businesses on this planet are developing and apply ethics in their business dealings in order to address the legal, ethical, social responsibility, and environmental issues they face. If a business analyze and evaluate these problems in a more systematic way, it can improve its own business performance with ease. The ethical codes can also help expanding opportunities for growth, and contribute to the development of social capital in their markets (business ethics). Each business entity can easily realize specific business benefits, such as: • Enhanced reputations and good will and increased customer’s satisfaction. • Reduced elements of risks and less factory and overhead costs. • Protection from their own employees and agents of any kind of fraud and corruption. • Stronger competitive positions and increased shares in the free market. • Expanded access to capital, credit, and foreign investment. • Increased profits. • Sustained long-term growth and chances of development. • International respect for enterprises and emerging markets. Enterprises that use to outrival in the above mentioned areas, they will become able of creating an atmosphere of high excellence all for their employees, shareholders, and communities, and they can easily contribute to the economic wellbeing of their countries (business ethics). Why Should One Be Ethical? Ethics and ethical behavior are the issues of almost all the organizations, which is all the time more focused on the business community of today. People are coming to know a lot of things and they are quickly learning about the Right and Wrong, and they are now more concerned with the exact happenings of an organization with whom they are connected as a shareholders, stakeholders, employees or as customers. They wanted to know about the competition, growth, and profitability of their concerned organization. Whereas the organization’s only concern has been limited to the profit and growth of their company to get the number one position and to fulfill this requirement, organizations are now crossing the red zone of ethics and ethical behaviors (Jalil, Azam, & Rahman, 2010). The growing numbers of businesses are constantly conducting surveys to evaluate the unethical practice in business organizations worldwide. To say that an individual is doing something accurate in all manners is another way of saying it is ethical. If it is not ethical, then one should not do it. Perhaps when business people ask why they should be ethical, they have a different question in mind: what is the motivation for being good? Is there some benefit in it for them? It makes a sense if an individual associated to an organization ask whether there is any reward for them for being good. But it has nothing to do with whether one should be good or not as no one can force other to behave in a good manner. But it makes no sense to try convincing people that they should be good by pointing to the rewards that may follow. One should be good because “good” is, by definition, that which one should be (Hooker, 2003). As for motivation, good behavior often brings a reward, but not every time. If it were always in one’s interest to be good, there would be no need for ethics. Anyone can simply act self-interestedly and not for the responsibility. For such individuals, researchers have invented ethics accurately because it does not always match with self interest (Hooker, 2003). An intelligent businessman includes concepts of ethics in his business which is necessary to help busy owners and managers in designing and implementing business ethics programs for their unique enterprises. These ethics are built on three core concepts, which are: Responsible business conduct: It includes the thoughts and actions of employees and agents which promote the reasonable expectations of enterprise’s stakeholders and help business in achieving those expectations to please them (business ethics). Responsible business enterprise: An enterprise is characterized by its governance policies and management practices, whether good or bad. And it also can be categorized on the culture of responsible business conduct. It is proficient in dealing with the new challenges and complexities of the business environment, both internal and external, but it closely grip to its purpose, core values, and vision (business ethics). Business ethics program: A way by which owners, leaders and managers use to inspire, motivate, encourage, and support responsible business conduct, to meet the short term and long term goals of the business. There is, of course, no one is 100% at the right way in order to design and implement a business ethics program, let alone to achieve a culture of responsible business conduct. It does not effect by the size or purpose of business, as businesses of each size have to set some standards to meet their goals and vision. Irrespective of business size, each business owner try to put his designed ethics into practice, and learns from experience (business ethics). Standards and Procedures The first question owners and managers ask themselves is, “What norms, values, and standards should we set to guide our members in order to pull up the hope and satisfaction of stakeholders?” The answer of this query defines how a business can improve its performance, and how it can make high expectations of its stakeholders. It’s not the question whether an enterprise is large or small; the question is “what standards, procedures, and expectations will be suitable to their business size with a vision to touches all feature of an enterprise (Structuring the Business Ethics Program). It can be done by keeping in view the following points: Setting Employee Expectations Employee relations are better to based on some clear-cut principles about the management, as how managers encourage employees to make good use of available opportunity to earn according to their productivity. Managers should deal employee in polite manners which reflect courtesy and thus the employee will feel confident and will be able to perform their task more perfectly. Employees must have an avenue of appeal when they believe they are being treated unfairly (Structuring the Business Ethics Program). Setting up the Core Values: Responsible management defines four or five values to guide the choices and actions for all employees and agents. Each business set core value according to its structure, Royal Dutch/Shell, for example, has set three core values: honesty, integrity, and respect for people. Another international brand, Chiquita Brands, has programmed four core values as: integrity, respect, opportunity, and responsibility. Whereas another example of another multicultural company, Alcatel, tells that this business is based upon four values as well: customer focus, innovation, teamwork, and accountability (Structuring the Business Ethics Program). Thus each organization is allowed to set some core values for itself to put itself in a favorable situation. Business Ethics Communications For a responsible business entity, all stakeholders must be known to their responsibilities and duties which should be within the ethics infrastructure of the business. Furthermore, the leading bodies of the organization must be known to the standards and limitations of the business so that they could achieve their goals with more ease (Structuring the Business Ethics Program). Communication is the backbone of each single organization and the standards should be prepared for the managers as how they could communicate to employees, shareholders and stakeholders? And also for the employees as how they could put their idea in front of managers and each organization should also respect the customer’s feedback and accept criticize to improve them. It is, undoubtedly, a way leading you and your business towards the success. Communicating Standards and Fostering Reasonable Expectations: A primary cultural obligation of each organization is the extent to which knowledge is shared. Communication can be top-down, down-top or horizontal which flows in all directions, it can be chosen according to the organization purpose. (Structuring the Business Ethics Program). Developing a Communications Program Communication is of two types by its nature, Formal communication and Informal communication. Formal communication can include announcements for the program, company newsletters, new employee orientation, training programs, posters, annual and social responsibility reports, speeches, and meetings. It would be an appreciating step of any organization to develop communication programs as the formal communications are the most obvious feature of it. On the other hand, the informal communication may include managers explaining how they arrived at a decision, experienced workers telling the newly hired employee and all forms of rumor and gossip. Owners and managers must be alert and they should be known to the both forms of communication which is directly or indirectly related to the business. If formal communications tell one story while informal communications tell another, stakeholders often become frustrated and sarcastic (Structuring the Business Ethics Program). In planning the communications program, owners and managers need to identify their stakeholders and prioritize communication efforts among them. They must consider how best to reach particular stakeholders. As with every other aspect of a business ethics program, the communications program must reflect an accurate understanding of the relevant context and organizational culture (Structuring the Business Ethics Program). Communicating Standards, Procedures, and Expectations Standards, procedures, and expectations of responsible business conduct should be communicated through as many means as are likely to be well received by the target audience. Importance of Feedback It does not happen all the times that each stakeholder is agree with the decisions of managers; some of them would be disagree at the same time. And thus they would find a need to get information about compliance with its standards, procedures, and expectations (Structuring the Business Ethics Program). Employees Seeking Advice and Reporting Concerns Many of the employees and agents recognize that the legitimate need from management for some information, if the enterprise is to meet the reasonable expectations of its stakeholders (Structuring the Business Ethics Program). The reporting concerns of the business conduct of co-workers are hard for most employees. Indeed, research suggests that substantial numbers of employees, even in developed economies, are extremely reluctant to report their concerns (Structuring the Business Ethics Program). It is vital for the betterment of the business and to increase its abilities for the aim to meet the goals of business that the owners and managers should be aware and known to the core values of the business and should make courtesy their golden rule while talking to the customers and employees. Owners, leaders and managers of any organization should develop a valuable procedure for communicating with stakeholders, employees and customers. They can do so by finding answers of two basic questions: 1. How can we most efficiently be in touched with our standards and procedures? 2. How can we know that our members follow our standards and reasonable stakeholder expectations are met? Ethical Theories The theories for the business ethics has been arisen in almost all the era and it can be found in many different contexts, as they address with the different problems. They also represent some ethical principles (Gulcan, 2011). There are many ethical theories which can be easily found and some of them are discussed in this paper. 1- Teleological Theories Teleological Theories of business ethics is the basic type of business ethics theories. The most common teleological theories of ethics are egoism and utilitarianism. Both of these theories strictly focus on the result of an action taken. On the other hand, there is some difference between the utilitarianism and egoism theories. While the consequences to one’s self define actions as ethical or unethical in egoism, in utilitarianism the consequences to others define actions as ethical or not (Gulcan, 2011). a. Ethical Egoism This theory elaborates the self interest of an individual and its needs and this theory was given by the Ayn Rand, and Adam Smith. According to the Egoism Theory, one should chose the manner to adopt which can conduce his self interest and one should be aware of the things which makes something good or bad, right or wrong, is that it satisfies one’s desires, or meets one’s needs. The business activities of an individual should not be affected by his own interest and wanting and it should be purely for the betterment of business only. Although the conception of Rational Self-Interest is basic component of capitalist economy and business models (Sadler, 2011). b. Utilitarianism Theory It is the second theory comes under the head of Teleological Theories. Utilitarianism is a belief that an action has been taken in the righter way. This theory has two basic and fundamental questions as, what is good? And what is Right? The Utilitarianism theory is based upon the rightness and goodness of an action which gives ultimate pleasure, calmness, and welfare of others. 2- Deontology Theory Deontological theories of ethics are different from utilitarian theories of ethics. This theory is based upon the duty researched by the famous Immanuel Kant, and W.D. Ross. It highly focuses on what makes an action good or bad, and right or wrong. The basic principle of this theory is fulfilling one’s duties towards self or other persons, like business. The Kant’s version regarding this theory is to reveals the reasons of one’s duty. On the other hand, the Ross’s version focuses on the common sense intuition which reveals one’s prima facie duties. The other duties should be based upon the fidelity, reparation, gratitude, beneficence, justice, self-improvement (Sadler, 2011). The principles of deontological ethics can be summed up by the phrase, “treat others as you would be treated”. According to Kantian ethics, if an action passes the test of categorical imperative, the action is ethical (Gulcan, 2011). a. Care Ethics The care ethics depends upon the relationships, vulnerability, and empathy. This theory was revealed by the Carol Gilligan, Virginia Held, and Michael Slote. It tells that what makes one’s actions good or bad, right or wrong, is that it involves caring for another, and supports relationship with other people. And the basic principle hidden in this theory is about that action which is caring towards those who are vulnerable or need support (Sadler, 2011). b. Virtue Ethics This theory is based upon one’s character. How he work, and what intention he has while working for a business entity. It was given by Aristotle, and Confucius. It is purely depend on one’s thoughts, values, and on some intangible characteristics of one’s personality as what makes something good or bad, right or wrong, is that it actually embodies or promotes traits culturally acknowledged as good or bad (e.g. courage, justice). The basic principle depends upon the actions reflective or productive of good or bad character, embodied in developed and lasting traits or habits (Sadler, 2011). Ethics to follow by managers There are four basic elements of one’s personality which can lead him towards the success and betterment and these four elements are: Trust, Honesty, Special treatment and Courage. More over the leaders and managers should also have some more qualities which include: The leadership with all the Values and Norms of one’s behavior The leaders as team builder and Developer of the people It also includes the element of Trust, Respect and the Caring conflicts All these elements are made for the practical use of one’s job in which people come, participate in team work and learn a lot of new things and skills. In my opinion, this is a good point which really has the capability to turn a management in a good management. Be a good manager, a person has to be a decision maker to take the job up. Conclusion and recommendation This paper has identified all of those ethical practices which can make a business ethical and the proper implementation of ethical practices are very important for organizational goodwill. It is also obvious and seems error free that an ethical organization’s employees are more satisfied and loyal to the company than those of an unethical one. With strong ethical enforcement, companies can build long term profitable relationships with their stakeholders. On the other hand, a good number of cases of unethical practices are being reported each year all over the world. The reason might be the wrong implementation and communication of ethical standards. By nature, human beings are greedy. So it is not possible to completely remove unethical practices. But it can be minimized through continuous reminders. In the present business atmosphere, there are some organizations that are ethical and in some organizations ethics are not practiced as rationally expected. Despite this type of mixed attitude towards business ethics, it can be said that ethical trend will change an organization’s internal and external reputation. In future, ethical considerations will move from individual awareness to organizational practice for the purpose of better business strategy. It is much significant to have a code of business ethics for each and every company and the corporate managers must adopt appropriate means to implement the contents of that code of business ethics. There should have adequate emphasis on the implementation of the code of business ethics in business organizations. To have a proper code of business ethics and to undertake effective method of implementing business ethics can ensure success in the business organization as well as to the society where it operates. Proper implementation of business ethics can ensure satisfaction of all stakeholders of the business organization. It is the ultimate desire of all stakeholders of a business organization that it will implement its code of business ethics in the true sense. Future research may be conducted in this area as this is a significant area of business environment. References Business Ethics. (n.d.). Retrieved from http://ita.doc.gov/goodgovernance/adobe/bem_introduction/forward.pdf Gulcan, D. N. (2011). Some Ethical Approaches in Business. Kastamonu, Turkey: Kastamonu University. Retrieved 07 23, 2012, from http://icongfesr2011.tolgaerdogan.net/documents/internatonal_presantations/KIN17.pdf Hooker, j. (2003). Why Business Ethics? Retrieved from http://web.tepper.cmu.edu/ethics/whybizethics.pdf Jalil, M. A., Azam, F., & Rahman, M. K. (2010). International Business Research. Implementation Mchanism of Ethics in business Organizations, 3. Sadler, Gregory B. (2011). Five ethical theories. Retrieved from http://missionparalegal.pbworks.com/f/Five+Ethical+Theories.pdf Siltaoja, M., & Lamsa, A.-M. (Eds.). (2011). EJBO - Electronic Journal of Business Ethics and Organization Studies. From Theory to Practice in Business Ethics, 16. Retrieved 07 23, 2012, from http://ejbo.jyu.fi/pdf/ejbo_vol16_no1_pages_4-5.pdf Structuring the Business Ethics Program. (n.d.). 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