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Ethics and Values in Business

Suneet Mitra
....a sting operation, executed by a foreign channel, has brought to the fore, yet again, that
unless we do something Ethics and Values is fading fast and soon going to become
extinct from the Corporate World .... in my opinion it would be the bureaucracy(Govt),
and EV (Ethics and Values) which shall spell havoc on the corporate world....

....irrespective of any profession EV (Ethics and Values) is simply vapourising.... doctors


are chopping absolutely normal limbs (to "convert" these patients into "effective"
beggars) for a few thousands, politicians are willing to transport drugs and top notch
defense personnel are approving C grade rations for our soldiers who lay their lives for
us....

...recent incidents in the BPO industry must have put a questionmark in the minds of
offshore clients and the industry into a trauma centre.....Even if it may be a stunt or a
sting operation with a malafied intention but the fact remains that data has been made
available in the past.....and that doesnt speak good for the corporate world....

....the picture is so dismal that nowadays organisations have to hire Information services
(Good for them) to check the credibility of the employees especially at Middle,Senior and
definitely at the Top Management.....top jobs are not available unless the references
check out.The recent Job Portals accept profiles only if they come along with at least 3-5
references.....

....in every training project that we have executed the board/top management has always
given me requisitions for people with EV and ambition....Professionals with EV has
become a rare specie and therefore shall have an unprecedented premium and position in
the corporate world...but one cannot claim to be practising EV in professional life and not
implimenting it in personal life too....this reminds of a famous caption of a TV Ad...of
being a Complete Man/Woman....

As I always say...

Keep Smiling...
Introduction to Business Ethics
Jonathon Hardcastle
Is it possible for an individual with strong moral values to make ethically questionable
decisions in a business setting? What affects a person's inclination to make either ethical
or unethical decisions in a business organization? Although the answers to that question
are not entirely clear, there appear to be three general sets of factors that influence the
standards of behavior in an organization; individual factors, social factors and
opportunity.

Several individual factors influence the level of ethical behavior in an organization. An


individual's knowledge level regarding an issue can help to determine ethical behavior. A
decision maker with a greater amount of knowledge regarding an object or situation may
take steps to avoid ethical problems, whereas a less-informed person may unknowingly
take action that leads to an ethical conflict. One's moral values and central, value-related
attitudes clearly influence his or her business behavior. Most people join organizations to
accomplish personal goals. The types of personal goals an individual aspires to and the
manner in which these goals are pursued have significant impact on that individual's
behavior in an organization.

A person's behavior in the workplace is, to some degree, determined by cultural norms,
and these social factors vary from one culture to another. For example, in some countries
it is acceptable and ethical for customs agents to receive gratuities for performing
ordinary, legal tasks that are a part of jobs, whereas in other countries these practices
would be viewed as unethical and perhaps illegal. The actions and decisions of coworkers
is another social factor believed to shape a person's sense of business ethics. For example,
if your coworkers make long-distance telephone calls on company time and at company
expense, you might view that behavior as acceptable and ethical because everyone does
it. Significant others are persons to whom someone is emotionally attached-spouses,
friends, and relatives, for instance. Their moral values and attitudes can also affect an
employee's perception of what is ethical and unethical in the workplace.

Opportunity refers to the amount of freedom an organization gives an employee to


behave ethically if he or she makes that choice. In some organizations, certain company
policies and procedures reduce the opportunity to be unethical. For example, at some
fast-food restaurants, one person takes your order and receives your payment and another
person fills the order. This procedure reduces the opportunity to be unethical because the
person handling the money is not dispensing the product, and the person giving out the
product is not handling the money. The existence of an ethical code and the importance
management places on this code are other determinants of opportunity. The degree of
enforcement of company policies, procedures, and ethical codes is a major force affecting
opportunity. When violations are dealt with consistently and firmly, the opportunity to be
unethical is reduced.
What are business ethics and what is their
importance?
anthony church
Business ethics are a matter of much debate. Every MBA entrant is taught the meaning of
them, and yet many will never follow these guidelines in their real life careers. It has
become a vast and complex field, and is the subject of much research. Business ethics
encompass a large and significant portion of what it takes to do business today. Under the
umbrella of business ethics comes:

• The social responsibility that a business is supposed to have towards the community in
general, particularly the one in which it operates or has any interests. An example of this
would be the Exxon Mobil oil spill. It is the responsibility of a business to protect the
interests of the people, animals and environment where it uses resources. Due to
improper handling of the issue, it became a public relations nightmare for the company.
Exxon has now been ordered to clean up the area which it should have taken care not to
damage in the first place. Indifference to business ethics in this case, caused a negative
public image for the company and a huge lawsuit.

• Issues regarding a company's responsibility towards its shareholders. This is a heavily


regulated area but one that requires a lot of government intervention due to certain
unethical practices adopted by many companies in the past. The concept of increasing
shareholder value is part of the fundamental principles of a company and if business
ethics are not brought into play here, the business can collapse due to the pressure exerted
by shareholders.

• Inter-company dealings and negotiations. Often rivalries in business can turn ugly due
to the amount of money and ego riding on them. Hostile takeovers and business
espionage are some of the examples of unethical behavior within the business world. If
discovered, these deeds can be punishable by law or simply public opinion. To allow for
fair play and keeping the best interests of the consumers in mind, the government
regulates a great deal of what goes on in company dealings. Microsoft has been the target
of much abuse and outrage due to its allegedly monopolistic techniques of doing
business. While this has not sunk the IT giant, many say that it may have long term
repercussions. The government has also stepped in to make sure that other businesses and
consumers are not harmed.

• Stakeholder protection. Every business has stakeholders other than its owners - the
employees, the stockholders and the general public. The business has to ensure that the
rights and interests of all of these groups are adequately protected in the course of its
operations. The recent outcry about the harassment and bad working conditions of
employees in Wal-Mart led to the generation of a lot of negative press about the outsized
department store. This gives the competition the lead and rivals take the opportunity to
get ahead while the company is busy trying to do some damage control.
• Fundamental business practices of a company. Underhanded dealings, the use of
substandard products, spreading misinformation about the product, hiring illegal workers
at lower than minimum wage, etc. prove that a business is run in an unethical way and
that it is not a high quality work place or service provider. For instance, cigarette
companies that spent most of the seventies telling people that it was not unhealthy to
smoke, though they knew this to be untrue. In a recent judgment, one such company was
forced to pay out $28 billion.

Small Business Employees Sometimes


Lack Ethics
Cash Miller
Many small businesses are saddled with a very familiar problem. How do you find good
employees? For business this seems to be an age old question. A question that seems to
have a great deal of answers but no real solutions.

Hiring a good employee can be a hit or miss proposition. Hopefully though once you
have gained some experience and learned from your mistakes your percentage of good
hires will rise. But because good hires are so hard to find you must keep an eye out for
unethical behavior from your employees.

Many small businesses though are still going to be stuck with an unfortunately large
number of employees they'd rather do without. Many of these small businesses are ones
that rely on manual labor to get the job done.

The reason why is fairly simple. Skilled professions typically require some sort of
education. Whether it's a formal education requiring a college degree or a more hands on
education such as an apprenticeship with a business.

So what exactly does this difference mean when the question of ethics comes up? Simply
put getting an education in a particular field requires commitment. And people that make
such commitments are more likely to value the rewards they earn.

With education can come a better paying job and maybe what they consider a better life.
Now apply that fact to the workplace.

An employee that has made that commitment to improving their life now has something
to lose. And because they value what they have earned and they do not want to risk it
they are more conscious about acting ethically in their workplace. They consider the
consequences of doing something stupid.
Now let's look at the other end of the spectrum. A laborer working for a small business is
not looking at having a long term career with the company. More than likely it's just
another job to them.

It's possible they have spent some time at a particular company and they know the ins and
outs of it. And because they are familiar with the workings of the business they know
what they can and cannot get away with. This provides temptation.

Now just because someone doesn't have a more formal education it doesn't mean they are
bad people and are out to steal the company blind. But such a person does have less to
lose and they might be more willing to give in to their temptations even though they
know better.

If their own moral code of right and wrong is somewhat less than solid then they may not
really consider the consequences of acting inappropriately. This is where their ethics will
be tested each day.

The solution for someone in this situation is simple. You need to make them feel that
they are a part of the team. People want to belong to something. They need to feel that
their contributions no matter what they are are valued.

Once again a person needs to feel they have something to lose if they are to value they
have. And you are in a position to provide that value to them. If a person has a reason to
think twice before they do something they are more likely to going to act in an ethical
manner.

Greed: The Wild Card variable in


Business Ethics
Dr. Duane Scott
In all of my Business Ethics classes my students are always reminded of Enron. The
curious case of Enron Corporation is a case like no other. If you were a historian this case
would be like the statement “Remember the Alamo”. In business the Enron Case was a
case in deregulation, greed, and a twisted relationship between the dirty underbelly of
business and high minded politics. In hindsight the Enron debacle was an exercise in
greed and not asking why there was so much money being handed out to Merrill Lynch,
Arthur Andersen, Citibank and others. No one asked why until it was too late.

Now in 2008/2009 we are in a midst of another crisis so much larger than Enron
encompassing so many of the same players. This time these players like Merrill Lynch
and Citibank are not so lucky to get away unscathed. When the Reagan and Republican
revolution took control in both the 80's and 90's deregulation and a smaller government
stake was pushed, all of business applauded the idea and for the most part we prospered.
Yet that wild card kept getting in the way of true prosperity. During the Reagan, Bush,
Clinton and W. Bush era's greed did rear its ugly head in the form of the Savings and
Loan crisis, The Enron crisis, and now the Sub-prime mortgage and mortgage backed
securities crisis. Why is it that we still have not learned the lessons of the past that greed
always destroys (in the end) that of which it built.

The problem is that we never know when this wild card variable (greed) will take root.
We cannot account for it in all of our statistical analyses and because of this humanity
gets burned by it time and time again. Business in its present form knows it exists but at
times wants to pretend it is not there this pretense seems to always happen every ten
years, curious! Nevertheless, we know that greed is the root of all evil but it is also one of
the root causes of progress. The idea that we all want to come up with the next best and
biggest idea is in a lot of ways rooted in greed. It is a part of who we are as a species so
we tend to expect greed to surface in all of our lives and especially in business.

One of my favorite movies, “Wall Street” starring Michael Douglas has a fantastic line
where he says, “greed for a lack of a better word is good”, I believe he utters those very
words or something close to it but his words still ring true today. Yet, the character
played by Michael Douglas misses the point or fails to understand something very basic
and that is greed also consumes everything in its path look at the fragile planet we live on
its resources are being strained and it is being polluted beyond recognition by the time
our children's children will take custody. Will it be too late for my darling 2 year old
daughter that I so cherish; I am not willing to find out that answer. What I am willing to
do is believe in fairness in business, integrity in business, honesty in business, and justice
in business. All of these watch words contribute to sustainability in business that can be
shared by all; both business owners and consumers alike.

Greed to me is this: you work all day to try and keep up with your neighbor, your
neighbor is trying to keep with your boss' neighbor and that neighbor is living well
beyond his means in order to impress his latest girlfriend on the side. While you are
doing this you are stressed out, you cannot pay your bills, and you are worried about
losing your job or your business. While this is all happening your children are out of
control because they are mimicking you in pursuit of something that will never give you
happiness. Sure you think that million dollars or more you are in pursuit of is going to
give you happiness but you better think again, ask that billionaire that just committed
suicide because he lost all his billions. Greed has a funny way of doing things like that.
My advice to you is to enjoy life and help others to do the same; money is not always the
answer to that happiness. Family, friends, and your spiritual relationship with your God is
what will make you happy. Money, which we tend to think will make us happy is only
one of those tools that we use to facilitate our relationships with those who are important
in our life, cherish them not money and I'll bet greed won't take root in your life. Happy
living!

10 New Year's Resolutions for a More


Ethical, Ecological, Profitable, and
Successful Business
Shel Horowitz
In this age of business scandals, it's crucial to remember that businesses based
on ethics and quality actually work better. With that in mind, here are ten easy resolutions
to inspire your business to achieve a very profitable 2009.

1) I will base every aspect of my business on honesty, integrity, and quality.

2) I will make sure every employee, from janitor to CEO, is trained to view every
interaction with a customer as a key step in the marketing process, and to always give the
customer respect and attention.

3) I will train and empower every employee to let the customer go away feeling good
about the entire interaction.

4) I will stand behind my products and services. It is better to refund the money and
create a positive buzz.

5) Understanding that it costs an average of five times more to bring in a new customer as
to keep an existing one, I will see that the entire organization exceeds customer
expectations.

6) Recognizing that my competitors can be my strongest allies, I will initiate at least one
joint venture (after all, if FedEx and the Postal Service, Apple and IBM, and General
Motors and Toyota can
cooperate, surely I can too).

7) If my company is not the best answer to prospect's needs, I will refer that prospect to
the company that can best serve.

8) I will devote business resources to make the world a better place.


9) I will volunteer on a community project, and set up incentives for my employees to
volunteer on the projects of their choice.

10) I will base decisions on the Abundance Principle that there is enough to go around,
and not on market share.

11) I will reduce my firm's use of water and energy, and reduce my family's use at home,
and inform others of the easy changes I've made. (See sidebar for suggestions)

12) I will grow by marketing the advantages of doing business with a socially and
environmentally conscious, ethical company.
Ethics And Organizational Development

For many organisations 'ethics' is something to be defined and managed by senior


executives. Consider the arguments for and against this control-oriented position. In
today's world it is all too prevalent to see more and more people hungry to gain success at
an ever-increasing rate. Modern culture can and indeed is labelled 'greedy' and
'thoughtless'. Through my relatively short time spent in business, I have encountered
many of these types of people. But who are they hungry for? Who benefits from their
thoughtlessness, and why do they do what they do? More importantly, who is to blame
when things don't go according to plan? These are all questions asked constantly in the
business domain, questions that often seem to include the word 'ethics' in their answer.
Whether we look to consequentialism and always consider the outcome of a particular
action, or conform to a more deontological form of ethical thinking and focus on always
acting in a manner that seems 'right', I believe that a person cannot always be 'ethical', all
of the time. If it were that easy, ethics would be a very small area of study. So what does
the word 'ethical' mean? To me, it is to take into account every aspect involved in any
given situation, peoples' feelings, thoughts and well-being, both now and in the future,
and act as best one can to achieve the most satisfactory outcome for all concerned. From
my viewpoint, acting in an ethical manner comes from each and every individual, each
having learned from the environment in which they have grown and developed. Should
the judgement, therefore, always be left to the individual? This is certainly not the case,
as more and more organisations in the business world develop codes of ethics that they
expect each member to follow. This definition and management of ethics can be seen as a
control-oriented position. This control paradigm for organisational ethics is largely
concerned with extracting the best possible results for the organisation as a whole. When
acting within a certain environment, be it local, national or global, the organisation must
be seen to be 'socially acceptable'. I believe this idea of control of the organisation's self-
interest together with maintaining a good standing in the public eye to be the main factor
for preparing these ethical codes. Both of these can only be achieved through clearly
defined codes of ethics from which individuals' roles can conform through a manner of
standardisation. However, through the enforcement of ethical codes, people revoke to a
basic level of thinking, judgement and acting as identified in Lawrence Kohlberg's pre-
conventional level. When put simply, it allows little room for individual thought or
expression, only rewarding good actions and punishing those that are bad. Can it be right
to control tasks that involve ethical reasoning by individuals? This is certainly much
different than, say, controlling how someone operates a particular machine. Conversely,
the autonomy paradigm, present in some organisations' ethical policies, is put in place to
promote individual critique through their moral thought and judgement. It emphasises a
feeling of a 'moral community', seen before in Kant's work, and from which Kohlberg
developed his post-conventional level, that allows people to apply their own reasoning to
daily situations. As Durkheim suggests and with which I agree, individuals submit to the
environment in which they work and how others have previously cast out norms and
values. This applies to general situations and therefore the majority. At other times, in
more complex situations, an individual would then be left to choose their own actions.
McMahon identifies that the legitimacy of managerial authority lies within a contract or
promise. An employee, therefore, willingly submits to the thoughts and ideals of the
organisation when they sign the contract of employment. That is, the exchange of labour
for wages in which employment consists involves a promise on the part of employees to
accept the directives of managers. To be sure, employees may be expected to use their
own judgement in carrying out the tasks assigned to them. But if a managerial directive
conflicts with an employee's judgement, the directive must take precedence. Otherwise
the employee is attempting to renege on a morally binding agreement (McMahon, 1989).
Whilst this in law is true, I feel that it should be left wholly to the individual's own moral
judgement. What is to say that those who have prepared the code of ethics for a particular
organisation are better 'ethically equipped' to make the decisions for others? That is to
say, why is a senior manager more ethically right than a lower employee? I don't believe
that as a rule he/she is, more they and others responsible for making the decisions would
like to think they are. Yes they may have more experience in their particular industry or
even technical and conceptual skills, but that does not make them better suited to exert
their moral judgement over another individual's. Once again, this control is clearly
forcing employees back down to a Kohlbergian pre-conventional level. In such free-
speaking times as we now live therefore, why do organisations attempt to dictate our
thoughts and actions? As I earlier identified, the organisation does not want to be seen to
be 'socially unacceptable' whilst simultaneously achieving the best possible results.
Therefore, from where do the key decisions originate? Should it be left to the managers to
ensure that employees follow an ethical code or should it be left to the individual's
judgement? In my view, autonomy is the generally the best approach as I am a firm
believer in individual expression. We have moved from such times as to rule with an iron
fist, we should go on from here and not regress. Do many organisations simply issue a
code of ethics because it is the 'done thing', a reactive gesture rather than a proactive
exercise? Is it the case that they are only acting merely not to appear unethical? This
certainly is the case in many organisations in my opinion. What is left to examine is
which organisation subscribes to which approach and for what reasons? I consider the
major factor in this to be the issue of responsibility. The term responsible is firstly,
sometimes used to mean 'trustworthy' or 'dependable'…second, the term is used to mean
'obligation'. Third, responsibility is sometimes used to indicate that an action or its
consequences are attributable to a certain agent (Velasquez, 1983). It is this third
explanation that I shall focus on. Can corporations have moral responsibility? This is a
question that certainly needs addressing here, and one that has been previously
considered by Richard De George. He focused on collective responsibility as it related to
organisations, and identified two views, the organisational view and the moralistic view.
The organisational view maintains that moral responsibility cannot properly be assigned
either to a corporation, nor to the agents of a corporation when they act as corporate
agents. As legal entities corporations can be legally restrained and can have legal
responsibility. But they cannot logically be held morally responsible or have moral
responsibility. For they are not moral agents or entities (De George, 1981). His moralistic
view, as he claims, is extremely outrageous. In essence, it states that organisations have
moral immunity, whereby an individual could be morally condemned for their actions,
they could not if they were pursuing the goals of their organisation. De George lists the
example of morally condemning a murderer for their actions, but how Murders Inc.
cannot be faulted from a moral point of view for pursuing its goal, nor can its agents for
doing what is necessary to achieve the organisation's ends. Whilst this addresses the issue
of whether organisations can be morally responsible, it does not answer the question.
Therefore, we have to determine whether it is the organisation that acts, the management
or the people. Whenever organisations act, people act, and for every act of an
organisation there are at least some acts of individuals such that if these individuals had
not performed their acts, and no one else had, then the organisation would not have
performed the act attributed to it (Haworth, 1959). This quote, in my opinion begins to
attribute responsibility wholly to individuals, and thus removes any need for a control-
oriented approach. Since the organisation as an entity cannot be held responsible, why
then should any body of people seek to control the moral judgement and actions of
others? If I am likely to be held accountable for my actions, then I know I want to exert
my own moral judgement before acting. Therefore, as it appears to me, it is the actions of
the people (be it a manager or a cleaner) that are accountable, and consequently the
people who are responsible! So why do some organisations take this control-oriented
approach? I'm sure that with some it is simply to keep the power in their own hands;
these people think they need to have power in order to be successful. However, I think a
more pertinent reason as to why some organisations take this approach is to hide behind
the organisation themselves. Many individuals within organisations are scared of the
book stopping with them so they create a 'code of ethics' which, in terms of blame, is
large enough to hide behind. Surely then, with the control-oriented approach the
organisation should be responsible? On the contrary, with an organisation that employs
the autonomous approach, each individual must be responsible for their own actions since
they are solely attributable for every part of every move they make. In listing these two
types of approaches and the degree of control that they attempt to possess, can it be said
of any one organisation that it has successfully adopted a control-oriented or autonomous
approach, and that there is no middle ground? I believe there to be a large scope for
contention with any organisation that states outright it has employed one of the two
approaches in its entirety. Perhaps the two approaches are simply styles of operating,
maybe even ideal? Having looked into the two different styles, therefore, I think that to
control someone's moral and ethical thinking with the ultimate aim to enforce them to
acting in a particular way is wrong. Each individual, unless impaired by disability, has
the power to determine what is right for them in a certain situation and therefore should
have the opportunity to act accordingly. A person should not be told what to think simply
for the corporate 'good'. If we are to deter corporate wrongdoing and be assured that
corporate members will comply with our moral and legal norms, our blame and
punishment must travel beyond the corporate veil to lodge with those who knowingly
bring about the corporation's acts (Velasquez, 1983). In conclusion, if we as individuals
want the power to think and judge for ourselves then we must accept the consequences of
our own actions. Organisations should give us this choice.
Business Ethics

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How to behave toward oneself and toward other individuals is a matter of making
choices: whether to be friendly or unfriendly; whether to tell the truth or lie; whether to
be generous or greedy; whether to study in order to pass an exam or to spend valuable
study time watching television and cheat to pass it. These, and all other questions about
how people act toward themselves and one another are dealt with in a field of study
called ethics. Another name for ethics is morality. Because both words suggest customary
ways of behavior, they are somewhat misleading. It had to do with what should or should
not be done. Divide practical wisdom into two parts: moral philosophy and political
philosophy. They’re defined together as a “true reasoned state of capacity to act with
regard to the things that are good or bad for man” (Drucker, 1996). One statement of the
problem is business organizations, as well as members of society in general, are plagued
by the fact that there are liars, cheats, and thieves among us. Liars, cheats, and thieves are
not new nor are they likely to disappear. People will do anything and go to whatever
extent to get what they want. This is why there’s a lack of ethics. Definition of terms: The
word ethics is derived from the Greek ethos, meaning “character,” the pattern of behavior
or personality found in an individual or group; moral constitution, moral strength, self
discipline and fortitude (Compton’s Interactive Encyclopedia). The other is from the
Latin mores, meaning “custom” (Compton’s Interactive Encyclopedia). Business Ethics
refers to what is right or wrong, or good or bad, human behavior. The concept of business
ethics is “being able to look at your face in the mirror”(Drucker, 1996). Ethics is a code
of conduct and values that is accepted by society as being right and proper. Code of
ethics is simply a compilation of the rules that are meant to govern the conduct of
members of a particular organization or profession. Moral philosophy and political
philosophy is true and reasoned state of capacity to act with regard to the things that are
good or bad for man. In the daily scramble to get ahead, earn a profit, and outwit
competitors, some people don’t play by the rules. Sometimes the culprits are respected
and ordinarily well-behaved persons even though they are accused of a crime or offense.
Unfair and unscrupulous actions hinder the development of harmonious relationships
between workers and co-workers, and between workers and supervisors. A person who
cannot be trusted to do the right thing, fails to win the respect of others. It should be
recognized, however, that ethical dilemmas are faced by people at all levels within an
organization. Various firms have experienced breaches of ethics. The respected business
firms suffer damage to their reputation when questions concerning ethical behavior arise.
This is one of the reason formal codes of ethics, developed by many business
organizations, and trade associations are popular today. Code of ethics is simply a
compilation of the rules that are meant to govern the conduct of members of a particular
organization or profession. A recent survey found that 94% of the fortune 500 service and
industrial companies have a written code of ethics (American Marketing Association).
Companies and trade associations expect their members to abide by such rules as a
condition of their engaging in the profession. There are at least two noteworthy
limitations to codes of ethics. First, the written rules are sometimes so vague and general
they prove to be of little value. Second, codes of ethics are neither a complete nor a
completely reliable guide to one’s moral obligations. It is impossible for the drafters of
such codes to anticipate all the moral dilemmas which may be encountered and
impossible for them to draft rules to govern all behavior. Nothing wins support from
external groups as much as adherence to strong codes of ethics. People in businesses and
businesses are expected to conduct their activities in an ethical manner. Ethics is a code
of conduct and values that is accepted by society as being right and proper. Employers
and employees practice honesty, fairness, and adherence to the law. However, there is
always the possibility of divergence from what is considered to be ethical and what is
actually practiced. No one commands more respect and admiration than the worker who
adheres to ethical principles and exhibits professional behavior. Specialists in the field of
Human Resource Development suggested that human relation is doing to others what
they would have you do to them. In either case, rather it’s good or bad you or they should
expect nothing less than coworkers or supervisors to behave in an ethical, professional
manner. The public image of business has been slipping since the 1960's. According to a
poll conducted in 1966, 55% of the American people had a “great deal of confidence” in
American business executives (Matthews, Washington State University, 1995). In recent
years, that percentage has dropped to about 20%. Surveys indicate that confidence in
business leaders is low, especially with regard to honesty and ethical standards.
Confidence in political leaders and institutions is even lower. One explanation is that
personal and corporate ethical standards have fallen. Cases of insider trading, product
content deceptions, bribery, pollution, and other business misconduct were seen as
confirmation of the public perception. Due to increased concern about ethical issues by
the public, it is more likely that some decline in an image is due to increased concern
about ethical issues by the public. The public expects more from businesses now than
they did in the past. Ethical problems are inevitable at all levels of a business and this
means that it's simply good sense for companies to take seriously the task of
institutionalizing ethics in their organizations. Accordingly, an important segment of
corporate America has begun relying on such tools as: statements of corporate values,
codes of conduct, ethics workshops, hotlines, even corporate ethics offices and board
level ethics committees. In short, they are setting up corporate ethics programs. Formal
ethics programs are relatively new to the world of American business. Although a
handful of companies have had them for twenty to thirty years, the majority of ethics
programs are no more than a few years old and some have been around for only a few
months. Nonetheless, their number is growing as their usefulness becomes evident. Why
Ethics? The view from the top. When one looks at corporations with a strong
commitment to ethics, the first thing one notices is that the leaders of these organizations
are the strongest advocates of corporate integrity. CEOs and Chairmen of such companies
are clear and vocal, forcefully charging everyone in the company to look at not only how
profitable their actions is, but how ethical. To the skeptics who think that ethics and
business go together as well as oil and water, their message is a little short of heresy. Yet
another issue cited is the effect of unethical conduct by the corporation on its employees.
If the company is unethical, that company is going to be cheated by its own employees.
Taking something as seemingly harmless as lying to help the company. “What you may
perceive as a simple lie or a simple misstatement that doesn't hurt anybody and protects
the company, sooner or later will come back to bite you. It'll bite you with people in your
organization who know it's a lie. If you can't be open and honest at all times, you're
sending a signal to the organization that you will let them get away with lying
occasionally. And that includes lying to you (Walter Klein). More than anything else,
however, the view from the top is that ethics is critically important for the health of the
organization. CEO's of ethically committed corporations believe that “no matter how
large the financial gain may be from doing something unethical, there's a cost somewhere
else in the business” (Jerry Junkins). If employees are directed to do something unethical
for the company or even if they simply witness dishonesty by their superiors, this
inevitably leads to a rotting of the organization. And there's no way that you're going to
be able to rebuild credibility with those people when you're trying to energize an
organization to go do something else. You've created a permanent problem in terms of
how people view you as an individual and how they view the management of the
organization. Ethics is primarily concerned with attempting to define what is good for the
individual and for society. It also tries to establish the nature of obligations, or duties, that
people owe themselves and each other. I feel that people do not willingly do what is bad
for themselves, but may do what is bad for others if it appears that good for themselves
will result. I’ve found that it’s difficult to define what is good and how one should act to
achieve it. Individuals and whole societies have performed outrageous criminal acts on
people. After research, I’ve found that business ethics now compared to 20 years ago has
increased, and lack of business ethics will probably not decrease. In addition, every one
of us must comply with business ethics of all applicable laws and regulations, and with
other company policies and instructions. Our conduct is our responsibility. None of us
should ever commit dishonest, destructive, or illegal acts even if directed to do so by a
supervisor or coworker, nor should we direct others to act improperly. In addition don’t
deviate from Business Ethics, policies and instructions even if doing so appears to be to
the company’s advantage. Work Cited 1. American Marketing Association 2. Compton’s
Interactive Encyclopedia, 1994-1997 3. Drucker, Peter, Florida State University, 1996 4.
W. Michael Hoffman and Edward S. Petry, Jr. “Phi Kappa Phi Journal.” Winter 1992, 10-
11 5. Jerry Junkins, Florida State University, 1996 6. Klein, Walter, Washington State
University, 1995 7. Marilyn Cash Mathews, Washington State University, 1995 8. Roger
E. Meiners, Al H. Rinleb, and Frances L. Edwards. “Legal Environment of Business,”
Chap.1, p.19-21 9. Ralph D. Wray, Roger L. Luft, and Patrick J. Highland. “Human
Relations,” Chap. 17, p. 487-491 AEthical and unethical behavior that occurs in
organizations frequently.@ Below are a few that occur with customers daily Example 1:
A consumer chooses to purchase a used car and the car odometer shows it only has
40,000 miles, although the seller knows that the car should have 80,000 miles. What has
occurred to the consumer is misrepresentation, as well as deception by failure to disclose
the actual reading. The consumer probably would not have purchased the vehicle had
they knew the actual mileage. It is the seller=s duty to inform the buyer of any defects
that might affect the customer=s decision. Example 2: Price-fixing-Managers of firms
manufacturing paper bags used for packaging foods, coffee, and other goods were fined
for getting together and conspiring to fix the prices of those paper bags. When firms are
operating in an oligopoly market, it is easy enough for managers to meet secretly and
agree to set their prices at artificially high levels. Example 3: Manipulation of Supply-
When hardwood manufacturers met periodically in trade associations, they would often
agree on output policies that would secure high profits. Firms in an oligopoly industry
might agree to limit their production so that prices rise to levels higher that those that
would result from free competition. Example 4: Price Discrimination-Used by one
organization in an attempt to undersell another organization, which may have taken away
all of their business. In 1960, Continental Pie Company attempted to undersell Utah Pie
Company, which had managed to take away much of its business. The Supreme Court
found such pricing practices Apredatory.@ Prices should be based on true differences in
the cost of manufacturing, packaging, marketing, transporting, and service goods. These
things often occur because most industrial markets are dominated by what is known as an
oligopoly (control of a commodity or service given market by a small number of
companies or suppliers). Most of the markets are shared by a large number of firms that
can have some influence on prices. AOrganizational Business Ethic Awareness Survey@
Some of the principles you will find in companies with well defined Business Ethics are
listed below. Are you aware of the following principles in your current organization?
Answer the following question by circling the appropriate choice. 1= Not Aware 2=
Somewhat Aware 3= Aware 4= Very Aware 1. We earn customers= business and build
relationships with them by representing our products and services honestly. 1 2 3 4 2. We
select suppliers based on the merit and value of their products and services. 1 2 3 4 3. We
don=t accept gifts, entertainment, or favors that could cloud our business judgement. 1 2
3 4 4. We compete vigorously, rely on the merits of our products, services, and people. 1
2 3 4 5. We support involvement in the communities where we live and work. 1 2 3 4 6.
We protect the environment in many locations where we conduct business. 1 2 3 4 7. We
notify Corporate Security whenever we suspect, observe, or learn of unethical business
conduct or the commission of any dishonest or illegal act. 1 2 3 4 8. We comply with
applicable laws that govern the company=s operation. 1 2 3 4 Open communication and
sharing of ideas 1 2 3 4 Respect for individuals and freedom from unlawful
discrimination 1 2 3 4 Safe and healthy working conditions 1 2 3 4 Respect for employee
privacy. 1 2 3 4 10. We never let our business dealings on behalf of the company
information be influenced by personal or family interest. 1 2 3 4 11. We don=t take
advantage of non-company information to which we have access. 1 2 3 4 12. We ensure
that proprietary information is never improperly revealed. 1 2 3 4 13. We safeguard and
make proper and efficient use of company funds and property. 1 2 3 4 14. We follow
proper record keeping and financial reporting procedures. 1 2 3 4 Calculate you
company=s total score by adding the numbers circled for each statement. Ethical
Scenarios These are different types of ethical scenarios you could be challenged within
your companies. If you were challenged with any of these type scenarios do you think
you would have handled them the same way? Answer all questions as ethically as you
know how, by circling the appropriate choice. 1= Ethical 2= Less Ethical 3= Unethical 1.
A sales representative for a line of women=s sportswear offers a 10%-to-15% discounts
to a few favored buyers; other buyers are not informed of any discounts. 1= Ethical 2=
Less Ethical 3= Unethical 2. Invited to come to New York for an interview with all
expenses paid, a recent graduate with heavy student loans decides to stay with a cousin in
the area and report that he stayed in a $100-a-night hotel; he is not asked to provide
receipts. 1= Ethical 2= Less Ethical 3= Unethical 3. A battery manufacturer, concerned
about the effect of lead on the fetuses of pregnant women, adopts a policy barring women
of childbearing age from jobs in areas where lead is present. 1= Ethical 2= Less Ethical
3= Unethical 4. After learning that a chemical it manufactures can cause cancer, the
company institutes new safety procedures and monitors workers for the onset of the
disease, but it does not notify workers of the cancer-causing potential of the chemical. 1=
Ethical 2= Less Ethical 3= Unethical 5. A bank loan officer routinely passes the names of
people applying for home improvement loans to her brother-in-law in the home
improvement business for contacting as prospects. 1= Ethical 2= Less Ethical 3=
Unethical 6. Upon washing a new dress according to the manufacturers directions a
woman found that the garment faded and the colors streaked. The retailer refused to
return the customers money. 1= Ethical 2= Less Ethical 3= Unethical 7. A customer
returned a car to a dealer several times during the 1-year warranty period to correct
transmission problems. In the 13th month the dealer overhauled the transmission and
charged the customer the full price. 1= Ethical 2= Less Ethical 3= Unethical 8. An
auditor discovers an illegal loan made by a savings and loan association. The auditor
destroyed working papers involving the loan when instructed to do so by the supervisor.
1= Ethical 2= Less Ethical 3= Unethical 9. An employee uses company services for
personal use. 1= Ethical 2= Less Ethical 3= Unethical 10. A manager authorizes a
subordinate to violate company rules. 1= Ethical 2= Less Ethical 3= Unethical Answers
1. Unethical 2. Unethical 3. Ethical 4. Unethical 5. Unethical (it would be Less Ethical if
they were not approved by her bank, but it would still not be ethical). 6. Unethical 7. Less
Ethical 8. Unethical 9. Less Ethical 10. Unethical Speech Business Ethics Introduction
How to behave toward oneself and toward other individuals is a matter of making
choices: whether to be friendly or unfriendly; whether to tell the truth or lie; whether to
be generous or greedy; whether to study in order to pass an exam or to spend valuable
study time watching television and cheat to pass it. These, and all other questions about
how people act toward themselves and one another are dealt with in a field of study
called ethics. Another name for ethics is morality. Because both words suggest customary
ways of behavior, they are somewhat misleading. It had to do with what should or should
not be done. Divide practical wisdom into two parts: moral philosophy and political
philosophy. They’re defined together as a “true reasoned state of capacity to act with
regard to the things that are good or bad for man”. Definition of terms The word ethics is
derived from the Greek ethos, meaning “character,” the pattern of behavior or personality
found in an individual or group; moral constitution, moral strength, self discipline and
fortitude. The other is from the Latin mores, meaning “custom”. Business Ethics refers to
what is right or wrong, or good or bad, human behavior. The concept of business ethics is
“being able to look at your face in the mirror”. Ethics is a code of conduct and values that
is accepted by society as being right and proper. Code of ethics is simply a compilation of
the rules that are meant to govern the conduct of members of a particular organization or
profession. Moral philosophy and political philosophy is true and reasoned state of
capacity to act with regard to the things that are good or bad for man. WHY ETHICS?
THE VIEW FROM THE TOP When one looks at corporations with a strong commitment
to ethics, the first thing one notices is that the leaders of these organizations are the
strongest advocates of corporate integrity. CEOs and Chairmen of such companies are
clear and vocal, forcefully charging everyone in the company to look at not only how
profitable their actions is, but how ethical. To the skeptics who think that ethics and
business go together as well as oil and water, their message is a little short of heresy. Yet
another issue cited is the effect of unethical conduct by the corporation on its employees.
If the company is unethical, that company is going to be cheated by its own employees.
Taking something as seemingly harmless as lying to help the company. “What you may
perceive as a simple lie or a simple misstatement that doesn't hurt anybody and protects
the company, sooner or later will come back to bite you. It'll bite you with people in your
organization who know it's a lie. If you can't be open and honest at all times, you're
sending a signal to the organization that you will let them get away with lying
occasionally. And that includes lying to you.” More than anything else, however, the
view from the top is that ethics is critically important for the health of the organization.
CEO's of ethically committed corporations believe that “no matter how large the financial
gain may be from doing something unethical, there's a cost somewhere else in the
business.” If employees are directed to do something unethical for the company or even if
they simply witness dishonesty by their superiors, this inevitably leads to a rotting of the
organization. And there's no way that you're going to be able to rebuild credibility with
those people when you're trying to energize an organization to go do something else.
You've created a permanent problem in terms of how people view you as an individual
and how they view the management of the organization. Conclusion Ethics is primarily
concerned with attempting to define what is good for the individual and for society. It
also tries to establish the nature of obligations, or duties, that people owe themselves and
each other. I feel that people do not willingly do what is bad for themselves, but may do
what is bad for others if it appears that good for themselves will result. I’ve found that it’s
difficult to define what is good and how one should act to achieve it. Individuals and
whole societies have performed outrageous criminal acts on people. After research, I’ve
found that business ethics now compared to 20 years ago has increased, and lack of
business ethics will probably not decrease. In addition, every one of us must comply with
business ethics of all applicable laws and regulations, and with other company policies
and instructions. Our conduct is our responsibility. None of us should ever commit
dishonest, destructive, or illegal acts even if directed to do so by a supervisor or
coworker, nor should we direct others to act improperly. In addition don’t deviate from
Business Ethics, policies and instructions even if doing so appears to be to the company’s
advantage. sploo-nuchy