Question

QUESTION ONE                                                                                                                               [20]

Read the excerpt below and answer the question that follows:

Business ethics are moral principles that guide the decisions that companies make. In a recent survey, MediaCom, a media and market research firm, reported that more than 50% of United Kingdom consumers age 16-19 say they have purchased or stopped using a brand because of its ethics. For instance, teens are more inclined to shop at Lush, a makeup brand that sells cosmetics made from ethically sourced ingredients, uses environmentally friendly packaging, and actively works to combat animal testing, than they are to buy products from less socially responsible businesses.

Ethical considerations in business go well beyond the products you buy. Ethical behaviour and decision-making are important foundations for successful careers and strong corporate leadership. For instance, there was plenty of blame to assign to the actors responsible for the Great Recession that began in 2008 and lasted for a few years. The global economic slide was the result of rampant greed in the financial sector, with individuals and institutions complicit in finding creative ways to make as much money as possible with little regard to the risks or consequences.

Question:

In light of the above, provide a critical discussion on ethics in business.

Answer 1

Critical discussion on ethics in business.

The system of moral and ethical beliefs that guides the values, behaviors, and decisions of a business organization and the individuals within that organization is known as business ethics. Some ethical requirements for businesses are codified into law; environmental regulations, the minimum wage, and restrictions against insider trading and collusion are all examples of the government setting forth minimum standards for business ethics. What qualifies as business ethics in history has changed over time.

Ethics in Leadership

The management team sets the tone for how the entire company runs on a day-to-day basis. When the prevailing management philosophy is based on ethical practices and behavior, leaders within an organization can direct employees by example and guide them in making decisions that are not only beneficial to them as individuals, but also to the organization as a whole. Building on a foundation of ethical behavior helps create long-lasting positive effects for a company, including the ability to attract and retain highly talented individuals, and building and maintaining a positive reputation within the community. Running a business in an ethical manner from the top down builds a stronger bond between individuals on the management team, further creating stability within the company.

Employee Ethics

When management is leading an organization in an ethical manner, employees follow in those footsteps. Employees make better decisions in less time with business ethics as a guiding principle; this increases productivity and overall employee morale. When employees complete work in a way that is based on honesty and integrity, the whole organization benefits. Employees who work for a corporation that demands a high standard of business ethics in all facets of operations are more likely to perform their job duties at a higher level and are also more inclined to stay loyal to that organization.

Ethics Vary by Industry

Business ethics differ from industry to industry, and nation to nation. The nature of a business's operations has a major influence on the ethical issues with which it must contend. For example, an ethical quandary arises for an investment brokerage when the best decision for a client and his or her money does not coincide with what pays the brokerage the highest commission. A media company that produces TV content aimed at children may feel an ethical obligation to promote good values and eschew off-color material in its programming.

A striking example of industry-specific business ethics is in the energy field. Companies that produce energy, particularly nonrenewable energy, face unrelenting scrutiny on how they treat the environment. One misstep – whether it is a minor coal ash spill at a power plant or a major disaster such as the 2010 BP oil spill – forces a company to answer to numerous regulatory bodies and society at large regarding whether it skirted its duty to protect the environment in an aggressive pursuit of higher profits. A stringent, clearly defined system of environmental ethics is paramount for an energy company if it wants to thrive in a climate of increased regulations and public awareness on environmental issues.

Companies such as Amazon and Google, which conduct most of their operations online, are not scrutinized for their environmental impact the way energy companies such as BP and Exxon are. When it comes to protecting their customers' privacy and security, however, their ethics are examined very closely. A particular area in which technology companies must make tough ethical decisions is marketing. Advancements in data mining technology enable businesses to track their customers' movements online and sell that data to marketing companies, or use it to match customers with advertising promotions. Many people view this type of activity as a major invasion of privacy. However, such customer data is invaluable to businesses, as they can use it to increase profits substantially. Thus, an ethical dilemma is born: To what extent is it appropriate to spy on customers' online lives to gain a marketing advantage?

Business Ethics Benefits

The importance of business ethics reaches far beyond employee loyalty and morale or the strength of a management team bond. As with all business initiatives, the ethical operation of a company is directly related to profitability in both the short and long term. The reputation of a business in the surrounding community, other businesses, and individual investors is paramount in determining whether a company is a worthwhile investment. If a company is perceived to not operate ethically, investors are less inclined to buy stock or otherwise support its operations.

Companies have more and more of an incentive to be ethical as the area of socially responsible and ethical investing keeps growing. The increasing number of investors seeking out ethically operating companies to invest in is driving more firms to take this issue more seriously.

With consistent ethical behavior comes an increasingly positive public image, and there are few other considerations as important to potential investors and current shareholders. To retain a positive image, businesses must be committed to operating on an ethical foundation as it relates to the treatment of employees, respecting the surrounding environment and fair market practices in terms of price and consumer treatment.

Critical Issues of Ethics-

Managers of the multinational companies are responsible for show their commitment to their employees and the good of the organization. In return, they got promise security of employment career advancement but they do not value the organizational policies. That is creating ethical issues in the organization. The whole scenario is changes after 1980s. Because for job security, lacking of the traditional norms and increasing the “professionalism” of managerial work.

Ethical issues:

Trust-

Many researchers found that the local staffs are in competed, lazy and not committed for the job.

They also found that many international employees are making up their mind about the local employees that they are not reliable and trustworthy.

The local staffs are not reliable, because they do not take the responsibility seriously.

Ethics and values:

In the organization international employees are do not care about the policies of the organization.

There is great difference between international employees and local staff in works skill manners.

The special attention by the organization, they feel that they are superior and valuable person for the organization. They stop giving respect and value to other local staff and other organizational body.

The local staffs are intermediately role to resolve problems that’s relates with corrupt officials and deal with government department.

International employees breach the polices of organization according to their own needs

Attitude and respect:

The international employees are getting the special attention by the organization. They are recognizes as committed employee and trustworthy that is why sometimes they behave like colonial.

They do not give respect to their local staff.

They are not deal genuinely in partnership because of their attitude of their partner.

Work and practices

International workers are very hard working but their approach is bounds because they closely stuck with the policies of organization.