Business Ethics

Beliefs on what is right and wrong:

Many are of the opinion that business and ethics do not go hand in hand because adherences to ethical practices do not accrue profits to the firm. They believe that a perfectly ethical company will not be able to reap the benefits offered by the business environment and so will not be able to capitalize on the opportunities that are provided by circumstances. However, real life examples have shown that business ethics do create high returns for the company. Reputation of a company and its share price also rise if they act upon on corporate social responsibility (CSR) and fulfill ethical values diligently and honestly, take care of society, customers, and in nutshell of all stakeholders’ interest and benefit over their own business objectives and goals. Corporate history of many multinational corporations (MNCs) have shown that companies that follow ethical practices provide double the value to their shareholders than companies that do not adhere to ethics.

Good, Bad, and Unethical behavior:

It is very difficult to define; good and bad behavior within a business sense because good and bad are arbitrary attributes and varied from one person to another. A person may view the activities of a company as good while another may believe that the activities of the company are bad. For example a company that makes pesticides may be considered as bad by environmentalists, while the company may help environmental restoration in some part of the world where the local residents may consider its actions as good. However, there are certain actions that may always be considered as unethical in spite of the regional differences in perspectives. For example it is considered unethical to influence people in power in order to get things done, or for political favors. This has been taken very seriously by governments that have initiated measures to discourage companies from resorting to unethical practices. For example the cost of unethical practices in the United States may be a corporate fine of more than 290 million dollars which is a sufficient excuse for companies to not to indulge in unethical practices US statistics affirm it.

Business behavior:

Management gurus talk of a few cardinal values that every executive must practice in order to administer good business ethics. They are justice, temperance, courage and wisdom. If fully developed in executives, these virtues guide them to make not just ethical, but morally superior decisions. That means that virtuous executives will advance employee interests if it is possible to do so. These values in a business perspective are not inherited. These virtues are developed in by being exposed to testing times. These characters develop when people make it a habit to act morally and learn from their past mistakes.

Business and managerial Ethics:

An organization is characterized by group interaction and mutual respect. Hence, the importance of a team and the effort that is invested in the team building process is very important to ensure the growth of a good organization. Without a good team that is able to perform on its own, a great organization never comes into existence. Organizations work on principle of synergy and delegation. It is the feeling of oneness with the company, which is called as feeling of ownership that enhances the sincerity of a worker to an organization. Organizations cannot work in a manner where the employees are not given due importance in the affairs of the organization.

Behavior toward the organization:

An organization is essentially a team and so the dynamics of ethics in an organization can be considered as ethical relations with many people. It has been argued by many management experts that good teams are vital to the success of any business venture. Only good teams can raise the standard of the work that it is assigned to. A bad team with members at loggerheads with each other will soon destroy the initiative of the team and cause irreparable damages to the whole team. In fact, team building is considered in the management circles, as a very effective motivational technique because it encourages the following qualities in the employees:

* Collaboration
* Communication
* Recognizing individuality and appreciating it
* A goal oriented approach to tackling tasks

Hence, it may be seen that the closeness that one feels to the organization is very important to further the interests of the organization and to ensure that the employee feels one with the environment in which they are working.

Behavior toward employees:

The ethical behavior of the company must not be restricted to its partners or business associates. In fact the attitude of the management to its employees also matters a lot when considering the ethical status of the company. Of course ethical perspectives are varied and subject to much criticism. In the recent times ethical attitudes of companies and employees have been much discussed and commented upon. In their Book Moral Issues in Business, Shaw and Barry refer to the morality and ethics of professional obligation of employees to their company. The authors mentions that such a mentality of putting the company first before any other personal or professional interest is not required because in today’s world, the equation between the company and the worker has changed a lot. The employee in the modern context is just a resource and hence the employee also need not dedicate himself entirely to the firm. Ethics in the work place is important because it reflects on the internal organization of the company. Work Ethics is a wide domain that covers a large number of specific subjects. It is involved in the creation and maintenance of company policies and strategies. Business ethics is also used to model human resources activities in a company. Since the human resources are the most vital asset of any firm, it is only natural that the company concentrates on developing a strong HR policy based on strong ethical values. It therefore can be seen that work ethics affect the internal as well as external image of the company and hence is very important for the firm.

Behavior toward other economic agents:

In a world where competition decides the quality of employees it is but natural that people are tempted to stretch their limits and do anything to gather enough recognition in the organization. Hence, people often bypass rules and appropriate behavior to attain goals that are not ethical in nature.

Assessment of Ethics:

As mentioned before, it is not easy to assess ethical behavior owing to the fact that good and bad qualities are arbitrary in nature. However, there are some basic guidelines that can help one to assess whether the path taken by him/her is ethical or not. Many experts believe that ethical dilemmas occur not because of lack of compliance with accepted rules and stipulations or conditions. On the contrary, ethical misdemeanors happen because people fail to place professional needs above personal needs. Hence, ethical misappropriation happens when there is a strong conflict between personal wants and official restrictions. Many behaviorists believe that one simple test to check one’s ethical content is to ask whether one is placing the interests of the company above personal needs. Secondly one need to check one’s past and proposed actions to see if there is some serious ethical slips in it. In most cases an ethical decision is one which does not cause harm to others and is utterly selfless.

Making a judgment:

More often than not, managers get themselves into a quandary on the ethical side of their actions. For example a decision to halt a process in a company because of concerns for the environment may backfire on the manager because the company believes that profits are more important than the environment. Here the manager will have to make a careful analysis of whether the proposed action is in terms with the vision and mission goals of the firm. If that is not so, he need not do a job even when pressured by some managerial position above him because ultimately a man is responsible for his actions.

ZAIN UL ABIDEEN, MS LEADING TO PHD SCHOLAR, SZABIST, ISLAMABAD CAMPUS

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on Dec 26 2009. Filed under Business. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry