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Ethics is known as Moral Philosophy which tries to address questions about morality. Ethics is concerned with the meaning of ethical judgement. It defines what is right or wrong, good or bad, fair or unfair, praiseworthy or blameworthy, responsible or irresponsible. Ethics addresses public policy's matters as well as personnel matters. Ethics based on the standard of right or wrong which defines what human should do in terms of benefits to society, obligations, specific virtues. It also refers to the study and development of one's ethical standards like feelings, laws and social norms can turn aside from what is ethical. Continues effort of studying our own moral beliefs and our moral way of act, and to make great effort to ensure that we and the company we established according to standards for a long term business are also can considered as ethics. (Web 1) According to Garret & Klonoski (1992) " Dealing with moral issues and choices , concerning an individual's beliefs about what is right or wrong and Good or Bad is something known as Ethics". (p - 157)
In every success of business, Ethics plays an important part. Business Ethics are becoming one of the greatest renowned requirements of the business these days. The word ethics itself is very well known but there is different strategy on how business should be done in every organisation. Every culture and every society has its own definition of business Ethics. It is a kind of applied sciences that examines or inspects ethical principles and moral ethical problems occurs in a business environment. In the most basic terms, a definition for business ethics boils down to knowing the difference between right and wrong and choosing to do what is right. Business Ethics demands that a company or organisation inquire its behaviour towards the outside world. It takes a thought of morality. For example the business manager's moral philosophy of situations do affects the manager's way of managing or ethical beliefs. Moral philosophy belongs to or connects to the all guiding belief system behind the individual's knowledge or perception of right or wrong. It is important to have a good knowledge of moral philosophy, ethical reasoning in business and management. Ethical theories and concept are very helpful in resolving the moral problems in business. Employees and managers must bring moral concerns in their decision making process. (Web 2)
Business Ethics can be defined as some written or unwritten principles or rules and regulations and values which guides or help in decision and action within the company. In business world, organization's set some standards, some rules to find out exactly the difference between what is good and bad, right and wrong decision making and behaviour. Doing the right thing is not always easy but it is always right. It is a requirement of long term success. The phrase Business Ethics traces the outline of the act of individuals in the organization also the organization as a whole. As a business manager, you have a lot of responsibility. Manager is the person who decides in which way he should act, if he should act ethically. It is a responsibility of manager to provide the means that allow the employees to act ethically. In this way organization supports the ethical actions of its employees. All businesses have to make ethical decision. It is very important for a company to be ethical in carrying out its business activity. For instance, can self employed electrician charge a senior citizen extra when a job takes long or extra time than estimated?
The main question arise in the corporate world that how business should actually act? Some argues that it is the responsibility of the business to behave ethically. The idea behind this is that the business cannot operate isolated. It comes in society and therefore have the influence upon the lives of all communities. The businesses should keep in mind the effects of the decisions; they make, upon the environment, consumers, communities, comparators and employees. They should behave in a responsible manner. It means while making decisions profit making should not be the only criteria. Other argues that the businesses should not act ethically while making decisions. The point behind this argument is that every business is run only to obtain profit. It is the primary cause of every business. The business means to produce goods and make profits for their shareholders in most efficient way. Organizations can choose any way to obtain profits, providing it is legal. Everyone will be served only by running the business in this fashion. If organizations choose ethical way then it might lead to inefficiency, higher costs and prices and it will be the consumers who suffer the most.
Now the question that arises in everyone's mind is are the businesses becoming more ethical today? It is true that some businesses adopting a caring attitude. Increase in companies which produce health products, recycling bags, recycling water, sale organically planted vegetables are the examples of businesses becoming ethical. But in some cases the businesses deal with the countries that violated human rights. This does not come under ethical behaviour. The main thing in today's business is that it is normally run for short term profit and the stakeholders spends most of their time in setting up the objectives. They are more interested in making profits rather than becoming ethical. (Hall and Jones and Anderson and Raffo 2008)
In recent years, some multinational businesses have adopted Ethical codes of conduct. It is on the based on how employees in the business should act in situations where ethical issue arise. Ethical issues can be like, for example, Should finance manager delay payments if the business has cash flow problems? Every business have different ethical codes, however, they may include proclamation about environmental responsibility, about the labour forced responding them fairly in fulfilling their needs, dealing with customers and suppliers in a honest manner.(Hall and Jones and Anderton and Raffo, 2008).
Over 60% of the major UK's businesses adopted ethical code of practice in their business by 1998. They want to improve the reputation of their business. They include some ethical codes of practice like promoting their goods honestly, preventing and minimizing damage to environment, competing fairly, reduce collisions with comparators, thinks about benefits of business's stakeholders and suppliers, giving employees full inside information.(Surridge and Gillespie 2005). There are a lot of benefits of implementing these codes like the employees and managers come to know what is expected from them in terms of ethical behaviour, provides framework to new employees within which they have to work, improves the reputation of company, tells suppliers and customers about organization's expectations, promote culture of excellence.(Jewell, 2000)
Also there is large number of benefits to the company if it behaves ethically. first the company can gain good publicity. Environment protection is a major issue which comes under ethical behaviour and the customers are mainly attracted towards those companies which are environment friendly, encourage recycling. For example, The Body Shop gains huge amount of customers by not testing their products on animals. Secondly the gain of customers means increase in sales of the company which adds up to company's profit. Third, the companies which behave ethically and keep their employees happy by giving them rewards can improve their quality of work and efficiency. In addition the turnover of employees is very low and hence the company can save the additional cost of recruitment and training of new staff.(Barratt and Mottershead 2000) .
However acting ethically when not required by law can have some negative impacts as well. Firstly, it can raise the cost of product. For example if the company pay more than necessary to the employees, it will increase cost. Finding different ways of testing products other than animals can increase the costs. Secondly, it can reduce revenues. For example if a business turn down to give bribe, it might lose contract. Selling products to third world at very low prices decrease revenue. Ethics has become a very serious issue for the large companies. Society and customer do not tolerate unethical business. However most of the companies adopted ethical policies which will prevent them from being harmed by market or by law. Some adopted aggressive ethical policies which sometimes help in gaining a lot of customers. Small to medium size companies do not have enough resources and management to follow ethical policies. Their ethical behaviour and policies are greatly affected by the society they operate in.( Hall and Jones and Anderson and Raffo 2008).
The best example of companies which follow Ethical policies in modern times is BAA, Heathrow Airport owner. The BAA planned to introduce a new terminal 2 at Heathrow airport, London. BAA claims that the terminal will be environmentally friendly and use renewable materials. The terminal 2 is being used by Star Alliance airlines such as BMI and Lufthansa which produces 40% less carbon. The roof has very large windows in order to decrease the need of artificial lighting as well as solar panels. So it is clear from the example that the companies are also working on ethical policies in this modern world. (London lite, 2009)
With the growing of a business globalization , more managers want to find themselves in an international environment ethical challenges if the managing ethical ways are challenge their own cultures imagine how difficulties managers are faced when the company employees which are belongs to an other cultures and countries the managers should be become in more stress . Employees and customer belong to different cultures and different societies in a large term that includes media, academic institutions, and non profit organization, religious, political and other groups are interested with business global ethics. Simple fact is that managers make themselves active and to do deal with many different stakeholders and make global business ethics which is very difficult. The managers should be become with new challenges human rights workplace ,conditions, environmental, issues, respect for the local customer and cultures and more. Probably most of the developing business people face customs, cultures and norms that may conflict with their own ethical standards. Although large business companies have an experience in the international area some times they provide trainings to their managers to guide them with policies and action for the ethical standards. (Trevino and Nelson, 2004)
One kind of training is the foreign languages, in which organization can improve their business relationship. Language is the part of cultures they can make a good international business relationship s and the employees can make a relationship with each others. The company send employees off for ethical training and provide them classes about the business ethics in their house or give them online facilities, it is depends on the business owner, managers, and to put employees what are they learned in ethics training practice. To create the most of business ethics training, it is best find a supplier that understands the importance of helping businesses use ethics training on a day to day basis. If your business is dealing with a particular issue of business ethics then you should find the ethics training providers that offer specific classes or seminars on that particular issue. This is the way you can focus more on a specific problem that may be of concern with your employees and focus less on issues that may not be relevant to your company. (Web 4)
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Web 2 - http://businessmanagement.suite101.com/article.cfm/what_is_business_ethics [Online] (verified on 09/08/09) Accessed:
WEB 4 - (http://www.business.com/directory/management/business_ethics/education_and_training/) [Online] (Verified on 11/08/09) Accessed:
Garret, T M & Klonoski, R J (1992), Business Ethics, Oxford Press University, 2nd Edition, P- 157
Hall D, Jones R, Raffo C, Anderton A (2008), Business Studies, Pearson Education, 4th Edition, Pp- 731-732
Surridge, M, Gillespie, A (2005), AS business studies, Hodder & Stoughton, 5th edition, P-271
Jewell, BR(2000), An integrated approach to business studies, Pearson education limited, 4th edition, p-179
Barratt, M, Mottershead, A(2000),AS AND A LEVEL Business studies, Pearson education limited, 1st edition, Pp- 708-709
Trevino L and Nelson K, 2004, Managing Business Ethics, John Willey and Sons, 3rd Edition, P- 316