Question

Improving Ethics (4–6 pages)

What can be done to improve ethics in finance?

What can be done to improve ethics in corporate governance?

Answer 1

Introduction

            Society has become extremely complex, and there are several stakeholders which need to be controlled in order to have a smooth and transparent functioning of the administrative levers. Administrative prowess has become one of the primary skill sets that is required to become an efficient leader in any organization or social institution. However, administrative control or leadership also comes with great responsibility and a sense of duty. One has to perform with utmost diligence and demonstrate moral behaviour in order to be successful in an administrative role. Governance and transparency are some of the key features of public administration which can only be achieved through ethical and moral behaviour. Several concepts related to ethical behaviour and morality in the domain of public demonstration have been discussed by James Svara and Edelman in their books. The ethical behaviour of a public administrator and the duties of a government are important parameters of good governance because they impact the development of the society and therefore, needs to be critically analyzed.

Businesses throughout the world have expanded over the years as a result of globalization, and they impact people’s everyday life in all possible ways. A lot of debate has been going on regarding the responsibility of a corporation. Some scholars are of the view that the only responsibility of a corporation is to generate profits and increase the wealth of the shareholders, while others believe that corporates have a social responsibility as well(Duska, 2000). They should give back to the community and society, in which the business thrives. There are several ethical aspects to look into while analyzing the topic of corporate responsibility and sustainability.

            Corporate social responsibility for businesses have been made mandatory in several countries. However, in several cases it can be seen that there are ethical dilemmas while investing in such projects(Dunfee, 1991). Corporations tend to invest in such projects which can add value to their business in some way or other such as increasing their brand value, improving their public relations, attracting talented human resource, and getting regulatory favors. Hence, this leads to ethical dilemma that can be resolved through traditional ethical theories, which is a form of normative ethical theory. It believes in the absolutist point of view. Some of the ethical theories which can be applied in business context include self-interest, compassion, and duty to people. Stakeholder theory explains that apart from investors there are several other stakeholders of an organization such as customers, employees, environment, suppliers, and government(Goodpaster, 1991). A business should work in their interests as well. Compassion is an ethical perspective which urges companies to be compassionate and humanitarian in their decision making.

            These are some of the ethical aspects which comes into play while analyzing the corporate responsibility and sustainability of an organization. They should be resolved through the application of various traditional ethical theories. Therefore, if these theories are implemented in proper manner, thenbusinesses can grow their profits together with overall improvement of the society as a whole.

Ethics in Public Administration

            The resources in a society are controlled by the public administrators of different institutions and they need to function properly for prosperity of the whole community. Any public administrator can misuse his or her power for personal gains or help a section of the population to benefit unfairly from his or her decisions. However, it would be a gross violation of the powers entrusted to the public administrator and faith of people on elected members of the institution would be demolished (Edelman, 1988). Hence, administrators should work within a framework of ethical behaviour and try to perform their duties to the fullest of their capabilities. Murray Edelman in his book demonstrates that any government or its public administrators develop an image in front of the population and that image defines the terms of the relationship between the people and public administrators (Edelman, 1988). The image can be determined with the help of propaganda and the achievement of the propaganda leads to the success of the government. He also mentions that in several occasions it can be seen that people overlook publicly available information in order to judge the performance of public administrators (Edelman, 1988). Edelman writes “The obliviousness of “the masses” to a high proportion of the issues that seize the attention of those with an avid interest in public affairs is a potent political weapon for most of the people of the world though it remains largely unrecognized in academic writing” (Edelman, 1988). However, from an ethical perspective the public administrators should not take benefit of such fallacies made by the common people. Edelman further believes that the promises made by the public administrators during their campaigns should be buttressed by facts and results. Public administrators should not resort to rhetoric and misguide common people as they hold a position of power which entails them to demonstrate high standards of ethical behaviour. The concept that appealed most was the agency theory as described by James Svara. It explains that administrators who manage the operations of any public institution have information that is not available in public domain (Svara, 2015). Moreover, the performance of the institution no way incentivises the salary or benefits of the public administrators. Therefore, there is an inherent mismatch of goals and benefits provided to the public administrators and this might lead to unethical behaviour or irresponsible decisions by public administrators (Svara, 2015). This has been explained as the agency theory by the scholars and impacts the behaviour of the public administrators in the long term. However, it is the duty of the board of directors to create a framework so that the actions of public administrators are monitored on a regular basis in order to achieve the goals of a public institution (Svara, 2015). The public institution governance is the fundamental bedrock of ethical behaviour which needs to be adhered to and monitored on a continuous basis in order to avoid any malfunctioning or irresponsible behaviour by public administrators. These are some of the concepts of public administration which have been explained in the two books and may be considered as one of the prime pillars of governance.

Conclusion

            Public administration can be considered as one of the most aspects for the development and advancement of a society. They are entrusted with several resources which need to be utilized for the benefit of the society. However, it can only be achieved if the public administrators work in an ethical and upright manner while performing their duties. The ethical frameworks and concepts that have been described above can help public administrators in performing their duties in an ethical manner which would lead to the development of the society at large. All these aspects have been explained in detail in the above sections which should help in creating proper governance frameworks for the public institutions as well as monitor their performance with respect to global benchmarks of ethical behaviour.