Government and other
owners  of the business are asserting  the relevance of ethical practices by business
organizations. In recent years, we have seen many unethical behaviors taking
place in the operations of certain businesses worldwide. This makes the society
unsafe for upcoming businesses, healthy competition, and consumers.

Business ethical
practice is an issue which is increasingly being given proper attention in the
business world today. Businesses are knowing that more and more customers are
becoming ethically sure  day-in-day-out.
It is now being proved in recent studies that many investors use the ethical
behavior of a company in the society as a standard for choosing company to
invest in. In order to remain sustainable and competitive in the global market,
many businesses have recognized the need to adopt good ethical practice.


approaches to business ethics

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Different philosophers
and theorists have propounded various theories on what can be considered
morally acceptable and unacceptable. Among these theories are:

a.     Telecological theory

The telecological approach
to ethical reasoning involves justifying an action by the  results achieved by such action. From this
fact, it is evident that telecology  is
based on two principles:

What is morally right
or wrong depends only on the outcomes or results of an act.

The more good
consequences can be produced by an act, the better that act.

According the
consequentialists, the results achieved by an action or a decision determines
whether to categorize it as an ethical or unethical one. In assessing what the
best consequences are, consequentialism is not very informative unless combined
with other theory. Utilitarianism and egoism are the most influential forms of

Ø Utilitarianism

In the utilitarian
approach to ethical consideration, emphasis is laid on the amount of good and
harm which might be derived from an action or a decision i.e. judge a
particular action or decision by the total amount of happiness or unhappiness
it creates. For example, when a company decide to move its manufacturing plant
from one location to another, what would be the amount of good i.e. happiness
caused and amount of harm i.e. unhappiness that the movement would create. The
utilitarian approach to business ethics is also evident when analyzing a
particular action or decision on cost benefit basis. For example, when all the
costs incurred from an action are added and compared with the resulting
benefits. If the benefit is more than the cost, the action may be considered


Ø Egoism

Egoist theories define
right and wrong in terms of the consequences to one’s self. In any ethical
decision making situation, an egoist would weigh and choose among alternatives
those that would contribute in the largest amount to his/her personal self
interest. Before doing this, critical consideration would have been done in
assessing the effects of such action or decision on his/her physical, mental or
emotional welfare. An egoist theories is evident in today’s business where a
particular organization base its ethical values on actions and decisions which
it can to a very large extent, derive its primary purpose or objectives.

b.    Deontological Theory

This theory is also
referred to as “duty-based theory” of business ethics. This is
because the word deontological was derived from the Greek word deon meaning
duty. Rather than focusing and attaching what is morally right or wrong to the
consequence that an action or a decision brings, deontologists based their
decisions about moral right and wrong on broad and universally acceptable
ethical values such as honesty, fairness, duty, respect for human beings etc.
According to the deontological approach, some actions or decisions would be
considered wrong even they created consequences that were good while others
would be viewed as good even when bad results were achieved. For example, an
auditor embracing deontological approach would likely insist on telling the
truth about a company’s financial difficulties even if doing so might put the
company out of business and his/her job on the line.

c.      Virtue Theory

Virtue ethics are normative ethical theories which
emphasize virtues of mind and character. Virtue ethics is a
broad term for theories that emphasize the role of character and virtue in
moral philosophy rather than either doing one’s duty or acting in order to
bring about good consequences. A virtue ethics  is likely to give you this kind of moral
advice: “Act as a virtuous person would act in your situation.”

Most virtue ethics theories take their inspiration
from Aristotle who declared that a virtuous person is someone who has ideal
character traits. These traits derive from natural internal tendencies, but
need to be nurtured; however, once established, they will become stable. For
example, a virtuous person is someone who is kind across many situations over a
lifetime because that is her character and not because she wants to maximize
utility or gain favors or simply do her duty.
























Chapter 2

issues that can affect the operational activities of today’s business

An ethical issue can be
described as a problem, situation or opportunity which requires individuals,
group or an organization to choose among several actions those which must be evaluated
as right or wrong, ethical or unethical. Hence, an ethical issue from business
point of view is a subject matter which raises questions about the standards of
conduct or behaviors which are being adhered to by the company separate from
the financial motives. In some situations, certain ethical issues may require the
company to undertake behavior which is unprofitable if it adheres to one set of
standards or profitable if adheres to another set of standards. For example in
the UK, while employing women at lower rates of pay than men may have been
considered acceptable according to the business ethics of the 1960s, it was not
by the 1970s and indeed the Equal Pay Act which was passed in 1970. Examples of
ethical issues faced by today’s businesses are:

a.     Environmental Issues

Environmental issue is
becoming an area of increasing concern for every business nowadays. Considering
the growing concerns of global warming, many businesses now strive hard to
reduce their emissions of carbon dioxide and encourage the production of more
energy-efficient equipments  and
appliances. The objective is to stabilize greenhouse gas concentration in the
atmosphere at a level considered less able to trigger dangerous climate change.
Other environmental issues that can affect the operational activities of
today’s business are in the aspects of water utilization and pollution,
responsible sourcing and waste management i.e. recycling. For example, the
Coca-Cola Company has environmental issue in India when it was reported by some
communities that its operation has led to shortage of water, water pollution
and illegal toxic dumping. This really affects the operation of the company.
Other recent issue that raised ethical questions is that of BP Gulf oil spills.

b.    Employment Issues

These are issues
relating to working for, or taking up a role in an organization. Examples of
issues arising from discharging one’s duties in the workplace are:

Discrimination: This
occurs when individuals are not being treated accordingly in the workplace.
Examples of areas where discrimination may occur are in pay, promotion and
performance evaluation. Also, racial and sexual discriminations in an
organization create ethical issues which can in turn affect the operations of
such organization. In the UK, employers must not discriminate base on the
aforementioned factors and if found guilty in any aspect by any employer, such
employer will be liable.

Equal Opportunities and
Diversity: On the ground of being operating ethically, many organization give
proper attention to equal opportunity during the process of recruitment,
selection, staff training etc. They also promote diversity in every aspects of
their business operation by employing and dealing with different people of
different nationalities, backgrounds, cultures, people with disabilities etc.
All these go a long way in influencing business operations. For example,
failure to give equal opportunities may leads to high rate of staff turnover,
reduce employee morale and the rate of absenteeism in an organization.

c.      Advertisement and Marketing

The process of creating
awareness for products and services, the means of distribution, the ways in
which product/service are priced and the promotional strategies adopted are
business area that generates potential ethical issues. For example, false or
misleading marketing communications i.e. the use of deceptive sales tactics can
jeopardize customer’s trust in a company. Also, charging unnecessary and
unjustifiable high price or engaging in price fixing for a product or service
may be considered unethical by buyers or users. These can affect business
operations. Many businesses try to adopt ethical standards for advertising and
marketing and this goes a long in influencing how they operate.  Labor Utilization

The manners in which
labor is being used and paid for in the production of goods and provision of
services constitute a major issue to business ethics. For example, utilizing
labor at below minimum wage, not complying with health and safety standards,
poor working conditions etc. are current ethical issues in today’s business.
Also, it was revealed recently that the amounts of money paid as wages to
workers by companies in some part of Asian and African countries are by far too
low compared to the amount of labor utilized for production.

d.    Consumerism

In the UK and other
parts of the world e.g. US, consumers have rights to quality products and
services. That is the reason why businesses, during their process of production
give proper attention to methods adopted in the process of production and
standards laid down by regulations. On the ground of being ethical in
operation, businesses now engage in proper product labeling, packaging, honest
advertisement, safe and quality products etc. all for protecting consumer’s



and recommendations

This report has
revealed that good ethical practices by businesses are very significant to the
realization of organizational success. A business organization that embraces
ethical ways of conducting its business affairs is more likely to achieve
employees’ commitment, loyalty and satisfaction which in turn lead to quality
of works and increased performance than unethical one. Such business will also
portray good organizational value in the eyes of the stakeholders. It is also
concluded that adopting good ethical behavior will increase being competitive,
business sales, profit, customers retention and loyalty and investments to
mention a few.

Since the relevance
of business ethics cannot be downgraded in today’s business world, it is highly
recommended that business organization embrace ethical practices. Businesses
should handle ethical issues such as discrimination and equal opportunities in
the workplace in the best possible manners. Obviously business do operates in vacuum,
environmental issues such as energy utilization, minimizing waste and recycling
should be properly addressed so that business operations will not be negatively
influenced by owners.


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