IntroductionGovernment and otherowners of the business are asserting the relevance of ethical practices by businessorganizations. In recent years, we have seen many unethical behaviors takingplace in the operations of certain businesses worldwide. This makes the societyunsafe for upcoming businesses, healthy competition, and consumers.
Business ethicalpractice is an issue which is increasingly being given proper attention in thebusiness world today. Businesses are knowing that more and more customers arebecoming ethically sure day-in-day-out.It is now being proved in recent studies that many investors use the ethicalbehavior of a company in the society as a standard for choosing company toinvest in. In order to remain sustainable and competitive in the global market,many businesses have recognized the need to adopt good ethical practice. Theoreticalapproaches to business ethicsDifferent philosophersand theorists have propounded various theories on what can be consideredmorally acceptable and unacceptable. Among these theories are: a. Telecological theoryThe telecological approachto ethical reasoning involves justifying an action by the results achieved by such action. From thisfact, it is evident that telecology isbased on two principles:What is morally rightor wrong depends only on the outcomes or results of an act.
The more goodconsequences can be produced by an act, the better that act.According theconsequentialists, the results achieved by an action or a decision determineswhether to categorize it as an ethical or unethical one. In assessing what thebest consequences are, consequentialism is not very informative unless combinedwith other theory. Utilitarianism and egoism are the most influential forms ofconsequentialism.Ø UtilitarianismIn the utilitarianapproach to ethical consideration, emphasis is laid on the amount of good andharm which might be derived from an action or a decision i.e. judge aparticular action or decision by the total amount of happiness or unhappinessit creates. For example, when a company decide to move its manufacturing plantfrom one location to another, what would be the amount of good i.
e. happinesscaused and amount of harm i.e. unhappiness that the movement would create. Theutilitarian approach to business ethics is also evident when analyzing aparticular action or decision on cost benefit basis. For example, when all thecosts incurred from an action are added and compared with the resultingbenefits. If the benefit is more than the cost, the action may be consideredethical.
Ø EgoismEgoist theories defineright and wrong in terms of the consequences to one’s self. In any ethicaldecision making situation, an egoist would weigh and choose among alternativesthose that would contribute in the largest amount to his/her personal selfinterest. Before doing this, critical consideration would have been done inassessing the effects of such action or decision on his/her physical, mental oremotional welfare. An egoist theories is evident in today’s business where aparticular organization base its ethical values on actions and decisions whichit can to a very large extent, derive its primary purpose or objectives.
b. Deontological TheoryThis theory is alsoreferred to as “duty-based theory” of business ethics. This isbecause the word deontological was derived from the Greek word deon meaningduty. Rather than focusing and attaching what is morally right or wrong to theconsequence that an action or a decision brings, deontologists based theirdecisions about moral right and wrong on broad and universally acceptableethical values such as honesty, fairness, duty, respect for human beings etc.According to the deontological approach, some actions or decisions would beconsidered wrong even they created consequences that were good while otherswould be viewed as good even when bad results were achieved.
For example, anauditor embracing deontological approach would likely insist on telling thetruth about a company’s financial difficulties even if doing so might put thecompany out of business and his/her job on the line.c. Virtue TheoryVirtue ethics are normative ethical theories whichemphasize virtues of mind and character. Virtue ethics is abroad term for theories that emphasize the role of character and virtue inmoral philosophy rather than either doing one’s duty or acting in order tobring about good consequences. A virtue ethics is likely to give you this kind of moraladvice: “Act as a virtuous person would act in your situation.”Most virtue ethics theories take their inspirationfrom Aristotle who declared that a virtuous person is someone who has idealcharacter traits.
These traits derive from natural internal tendencies, butneed to be nurtured; however, once established, they will become stable. Forexample, a virtuous person is someone who is kind across many situations over alifetime because that is her character and not because she wants to maximizeutility or gain favors or simply do her duty. Chapter 2Ethicalissues that can affect the operational activities of today’s businessAn ethical issue can bedescribed as a problem, situation or opportunity which requires individuals,group or an organization to choose among several actions those which must be evaluatedas right or wrong, ethical or unethical. Hence, an ethical issue from businesspoint of view is a subject matter which raises questions about the standards ofconduct or behaviors which are being adhered to by the company separate fromthe financial motives. In some situations, certain ethical issues may require thecompany to undertake behavior which is unprofitable if it adheres to one set ofstandards or profitable if adheres to another set of standards.
For example inthe UK, while employing women at lower rates of pay than men may have beenconsidered acceptable according to the business ethics of the 1960s, it was notby the 1970s and indeed the Equal Pay Act which was passed in 1970. Examples ofethical issues faced by today’s businesses are: a. Environmental IssuesEnvironmental issue isbecoming an area of increasing concern for every business nowadays. Consideringthe growing concerns of global warming, many businesses now strive hard toreduce their emissions of carbon dioxide and encourage the production of moreenergy-efficient equipments andappliances. The objective is to stabilize greenhouse gas concentration in theatmosphere at a level considered less able to trigger dangerous climate change.
Other environmental issues that can affect the operational activities oftoday’s business are in the aspects of water utilization and pollution,responsible sourcing and waste management i.e. recycling. For example, theCoca-Cola Company has environmental issue in India when it was reported by somecommunities that its operation has led to shortage of water, water pollutionand 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 IssuesThese are issuesrelating to working for, or taking up a role in an organization. Examples ofissues arising from discharging one’s duties in the workplace are:Discrimination: Thisoccurs when individuals are not being treated accordingly in the workplace.Examples of areas where discrimination may occur are in pay, promotion andperformance evaluation. Also, racial and sexual discriminations in anorganization create ethical issues which can in turn affect the operations ofsuch organization.
In the UK, employers must not discriminate base on theaforementioned factors and if found guilty in any aspect by any employer, suchemployer will be liable.Equal Opportunities andDiversity: On the ground of being operating ethically, many organization giveproper attention to equal opportunity during the process of recruitment,selection, staff training etc. They also promote diversity in every aspects oftheir business operation by employing and dealing with different people ofdifferent 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 MarketingThe process of creatingawareness for products and services, the means of distribution, the ways inwhich product/service are priced and the promotional strategies adopted arebusiness area that generates potential ethical issues. For example, false ormisleading marketing communications i.e. the use of deceptive sales tactics canjeopardize customer’s trust in a company. Also, charging unnecessary andunjustifiable high price or engaging in price fixing for a product or servicemay be considered unethical by buyers or users. These can affect businessoperations.
Many businesses try to adopt ethical standards for advertising andmarketing and this goes a long in influencing how they operate. Labor UtilizationThe manners in whichlabor is being used and paid for in the production of goods and provision ofservices constitute a major issue to business ethics. For example, utilizinglabor 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 toworkers by companies in some part of Asian and African countries are by far toolow compared to the amount of labor utilized for production.d. ConsumerismIn the UK and otherparts of the world e.
g. US, consumers have rights to quality products andservices. That is the reason why businesses, during their process of productiongive proper attention to methods adopted in the process of production andstandards laid down by regulations. On the ground of being ethical inoperation, businesses now engage in proper product labeling, packaging, honestadvertisement, safe and quality products etc. all for protecting consumer’sinterest. Conclusionand recommendationsThis report hasrevealed that good ethical practices by businesses are very significant to therealization of organizational success. A business organization that embracesethical ways of conducting its business affairs is more likely to achieveemployees’ commitment, loyalty and satisfaction which in turn lead to qualityof works and increased performance than unethical one.
Such business will alsoportray good organizational value in the eyes of the stakeholders. It is alsoconcluded that adopting good ethical behavior will increase being competitive,business sales, profit, customers retention and loyalty and investments tomention a few.Since the relevanceof business ethics cannot be downgraded in today’s business world, it is highlyrecommended that business organization embrace ethical practices. Businessesshould handle ethical issues such as discrimination and equal opportunities inthe workplace in the best possible manners. Obviously business do operates in vacuum,environmental issues such as energy utilization, minimizing waste and recyclingshould be properly addressed so that business operations will not be negativelyinfluenced by owners.