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Business ethics is also referred to as corporate ethics. Goodpaster insinuates that it's a type of professional ethics that relates to moral or ethical issues which are important in a business environment (1991). Business ethics relates to all the factors of business conduct. It concerns itself with the conduct of individuals as well as that of business organizations. In career specialization and in corporate practice, business ethics is a primarily normative discipline. On the other hand, it takes a descriptive form in academia. The actual range and the number of ethical issues in business is a reflection of the extent to which business and the corporate world as a whole are considered to be detached from social values that are not economical in nature.
Boatright (2000) reveals that history has it that during the years of 1980s and 1990s is when interest in ethics of business increased dramatically. The interest was shown from within academia and the major corporations. This can be proved by the way websites of major corporations emphasize on commitment to promotion of social values that are non-economic. This is communicated in a range of headings for example social responsibility charters and ethics codes. In some instances, some companies have done a redefinition of their core values in line with business ethical considerations.
Ethics in business should be dully discussed since business can turn to be unethical at some times which are evidenced today for example by business cartels that conspire against the public and contrive at some times to raise prices. Mitchell argues that since it's an undisputed fact that business in form of firms and companies thrive and operate in the natural and social environment, then it has a duty to remain accountable to the same social and natural environment where it survives (2001). Though business has a myriad of pressures and demands upon it, it is bound to remain ethical by the fact that it exists. Two reasons to support this is one, that stakeholders of a business are dully affected whatever it undertakes. Secondly, every point of action is accompanied by trajectories of unethical and ethical paths which leave the business existence to be justified by the ethical alternatives that it chooses responsibly. One of the factors that made business ethics popular is the end of small scale enterprises of high trust and emergence of big multinational companies which have the capability to affect the day to day lives of masses in a drastic way.
The world has had many epochs and at these different epochs, people, more so the world elites were not aware of ethics and morality. The two were in an obvious way unethical to the epoch that was succeeding. Thus, business history is tainted by occurrences like slavery, colonialism and the cold war. Today's discourse of ethics in business can be said to be the ethical discourse related to post-world wars and post-colonialism (Sauser, 2005). When firms began giving highlights of their ethical stature, the world was experiencing natural and economic disasters of a serious magnitude thanks to unethical business practices. Examples of major disasters caused by bad business ethics are the Bhopal disaster as well as fall of Enron.
The business ethics idea attracted the attention of media, academics, and business firms as the overt cold war was coming to an end. As history has it, Cold War was fought for and through American business firms that were situated abroad. In today's world where the media is affluent and democratic, overt violence perpetuated by business firms has diminished to a large extent though it has not ceased to exist fully. Boatright concurs that business ethics can relate to a number of issues in the business world (2000). It can refer to corporate social responsibility which is the umbrella term for debate and clarification of duties and ethical rights that should exist between the corporate world and the society. Business ethics also applies to the duties and moral rights that exist between a corporate body and its shareholders for example fiduciary responsibility. There are also ethical issues that concern the relations between companies for example takeovers and industrial espionage. Other issues of business ethics are political contributions that are made by companies, issues of leadership like corporate governance and misuse of policies on corporate ethics as tools of marketing.
Every business should instill business ethics in its operations. Companies that fail to adhere to ethics of business break the law and they end up paying hefty fines. For example, many a company has broken environmental roles, ethical and anti-trust laws and has been fined millions (Boatright, 2000). The companies don't feel it though. This is because the money they make in profits outweighs the fines charged in a big way. There are critics of business ethics whose claim is that ethics is an irrelevant issue in the business field. Some of the critics hold that companies and firms are amoral and consequently, their only duty should be the maximization of their profits. Business ethics `is a contested topic. Its relevance to business is highly questioned and also whatever is presented as ethics of business is sentimental common sense and in some cases, they are just excuses for unpleasantness.
Every company takes its own different measures to show Corporate Social Responsibility. However, there are four sectors that have to be considered regardless of the goals that the company wishes to achieve as regards social responsibility. These are, quality of life, solving of problems, economic function and social investment. There are many approaches towards Corporate Social Responsibility but the one which is accepted across the board is the one of community-based development. Through this approach, companies work in collaboration with local community's in-order to better themselves. Corporate Social Responsibility, if well publicized can help a company win more contracts or get more customers since most people will be inclined to associate with those companies that they respect. A company should also use social responsibility as a process of adding long term value. This is due to the reason that social responsibility improves a company's reputation which further encourages stakeholders and customers to remain involved with the business. Effective social responsibility differentiates a company so that even when faced with competition, the commitment to social responsibility lets the company stand out. The other benefit of social responsibility is that it attracts staff since people desire to work for a firm that is ethical and responsible.
Corporate Social Responsibility also has some disadvantages to a business. Firstly, social responsibility is an expensive venture which may reduce the company's profitability in the short term. Social responsibility can also make a company deviate from its purpose and mission as it tries to be social responsible. There are many ways in which a business can engage in Corporate Social Responsibility. According to Sauser Jr., environmental conservation is the most common since besides it being a way of giving back to society, it helps preserve our natural resources (2005). Another way of being socially responsible is by helping the needy for example giving bursaries to poor students. Some companies also engage in social responsibility by sponsoring events that involve participation of the community for example sporting events.
According to Mitchell (2001), a company can be measured by the community whether it is ethical or not through their Corporate Social Responsibility. The community in this case encompasses many sub entities like the customers of the company, the media, the government, competitors and other companies as well as Non-Governmental Organizations. Some of the methods of measuring include the use of regulations, whereby the company has to follow some rules (Goodpaster, 1991). Public opinion can also be used for example opinion polls. The other method is by use of impromptu secret investigations on the company by media and other bodies. This measure using Corporate Social Responsibility is very reliable.
In conclusion, the above listed methods are reliable since the information they will give will be a true reflection of the company's ethical practices. For example, if the company behaves unethically, it will break set rules which attract penal consequences. The media is important as it highlights instances of unethical behavior by a company. Secret investigations reveal clandestine unethical practices of a company.