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Business ethics is the attitude and ways in which a business is formed and the way in which a business deal with the world. Many businesses behave in divert or different ways depend on the way it's formed by the owners of the business. Business ethics can be described as principle and standard that is guiding behaviour of people in the business. Many business have different reputation depends on the ways in which they are formed some business have bad reputation while some have bad reputation. Some businesses are formed for money making venture while some are formed because they want to make money and at the same time want to give its customers maximum satisfaction. The way in which a business is formed brings about ethical behaviour. Ethics is a set of moral principles that a business should follow and values that a business should embraced in order for a business to be successful. Most business should have a code of ethics in order for the business to have a principle guiding the business so that the business can be flourishing.
Crane A and Matten D (2004) defined business ethics as the study of business activities and decisions where issues of wrong and right are addressed.
Ethics in a business all about value society, value for other and value for self so that there can be fairness in the society and things can be done appropriately and smoothly in our environment. Ethics is all about the ways in which people behave in our society.
TYPES OF BUSINESS ETHICS:
MORAL OBJECTIVISM: This can be describe as what is morally wrong or right in term of the behavioural attitude of a person. These are fact that and this is not individual physical facts, or what we feel or assume to be morally fact. Moral objectivism is very easy to express, it is either good or bad and moral objectivism can be said to be non consequentiality.
MORAL RELATIVISM: What is morally wrong or right depends on what individual belief and it vary from one person to another and also from one culture to another and it can be link to the society cultural belief and its belief that different people have different background which can be linked to our individual moral belief and culture. The general belief is that it is wrong to say that one culture or belief of individual is superior to another culture. We can base what is right or wrong on what individual belief and environment which we have our self also contribute to what will belief.
CONSEQUENTIALISM: This is the theories which result into the consequences of a particular action which has a valid and moral judgement about the action. Moral judgment about the action must have evidence and must be valid. The consequentialism can be describe as an act that tell us whether the consequence of a behaviour is morally or ethically right and it can also be right or wrong. The judgment about consequentialism should be significant.
DEONTOLOGY: This is a Greek word which means deno, which mean duty and the logos, means science. It focuses on moral rules and duties. In order for us to make moral choice, we have to know our moral duties and how we can adjust to those duties. If we obey our duties we are doing morally things and if we fail to follow our duties we are doing immoral things. In deontology our duties, rules and obligation is according to God wishes.
PRINCIPILISM: This is ethics that focuses on medical healthcare. This as to do with ethical issues relating to health care provider who are in charge of health care of individual or group of people. Principilism focuses on moral principles namely autonomy, beneficence, non-maleficence and justice.
In conclusion ethics is all about moral principle which is ruling what is right or wrong in human being conduct whether the principle governing right or wrong is accepted by individual or groups in our society. Some business activities that human being engage in might be lawful and unlawful which will also be unethical to human being, for example
Selling a good that the cost of manufacturing is low wages to developing countries will be regard as unethical also using animal as experimenting can also be unethical.
The concept of absolute and relative ethics:
Ethical theories depend on what is right and wrong and the end result of the action. Doing what is right is obeying your duties and the rule that guide a business. Ethical behaviour of people doing business is very important in our society. Our moral belief about life changes over time. There is different kind of people in the world coming from different ethnics group which moral belief and culture is different, therefore people's belief and thinking to things happening in our society now is different. Some belief in the existence of religion others do not belief in religion. Some belief that abortion should be encouraged in our society other feel it is taking of human life. In some part of the world some beliefs in circumcision of women while other feel it is barbaric and immoral. Therefore ethical belief has to do with our culture, society and belief we all have because of our religion and background.
ABSOLUTE ETHICS: The belief that there is only one truth and code of conduct which people generally belief in, which everyone obey and is the truth and everyone must obey it and people must be aware of it.
RELATIVE ETHICS: The belief of relative ethics is base on the fact that there is only single moral standard which applies to all human being. The moral ideas and belief of human being differ from one another and also people belief in different part of the world is also different from one another which show that there is no stable moral standard in the world.
The difference between absolute and relative ethics is stated below:
The general belief is that there is a universal moral standard.
There is different between what is right and wrong.
Relative ethics say there is no universal moral standard in the world.
The relatives' ethics says there is no difference between what is right and what is wrong.
Ethical issues which can affect the operational activities of a business:
The ethical issues that can affect a business operational activities of a business today in our society can be describe as what is a happening in today's business. How the business is operating if the business is operating ethically or not, business ethic in an organisation is the responsibility of the leader and follower in an organisation.
The following are some of the management ethic in an organisation:
EMPLOYMENY LAW: This has to do with employment of employees, the minimum wages that workers will be paid, working hours which will be made known to the employees when they are employed, also the employment terms and conditions must be obeyed. Laws that are governing employment in our various organisations which is quite different from one another organisation to another organisation depend on the policies and the ways in which the organisation is structured.
Some organisation are flexible and the working conditions and how they treat their employees is base on the policies adopted by the organisation, they make sure that the environment in which their employees operate is safe and accident free and the make sure employees undergo training on health and safety so that they do not risk their lives in case there is danger at work, they make sure they let them know the implication of risks and danger at work which are some of the things organisations should let their employees know before they start working.
The case of BP oil producer one of the world largest oil producers in the world. It was find out that the there was lapse in safety of lives at the refinery by the US Chemical Safety and Hazard Investigation Board. It was noted that the company was endangering its employee's safety by cost cutting. It was also noted that BP was spending money on project instead of spending money on safety of lives of its employees. The issues are that the management of BP did not take safety of its employees as their priority and also the management of BP did not understand the safety culture within the organisation. Employment law can affect a business and it might even make a business to collapse therefore it is necessary that we should apply business ethics in organisation while dealing with employment and employees within the organisation to make the policies and structure of the organisation work in line with the aims and objectives.
EQUAL OPPORTUNITY: Equal opportunity should be given to all in the society without discrimination of age, colour, sex, or ethics or where the person should have come from, everybody should be given equal opportunity to in the society. In some organisation they do not want to employ female because they believe that they will not work according to the rules and regulation of the organisation, they believe that they will always want to be on leave while they are pregnant or take maternity leave which might not be good for the organisation because they think while they are suppose to be at work they will be on leave which will be a setback for the organisation.
This apply to the day to day running in business, there should be ethical behaviours in the ways employees treat its workers, customers and all stakeholders in a business, a business that apply ethics in the business makes the business to be successful and a business should be responsible for its employees, customers, society and supplier so that there will be mutual understanding between all the stakeholders which mean the business is being run ethically, running a business ethically mean providing all the requirement that a business need to flourish which makes the business to grow and be productive because employee are being treated nice, by paying the minimum requirement of wages to employees and also providing a health and safe environment for its customers and given equal opportunities to all the employees without being bias and promotion should be given to employees when due, these all ethics a business should provide for all stakeholders in a business in order to consider the business to be ethics.
The belief of other is that they have the right and they should be given the opportunity and privilege, this are some of the ethics in a business, if the organisation and stakeholders can understand today business organisation and our society, things will work well there will not be discrimination or whatsoever in our society, everybody will have equal opportunity and things will work well for us all in our environment.
If people are not given equal opportunity in a workplace it can affect the operational activities of the business because most of the workers will not be happy and diligent at work because they know they are not been treat with fairness and justice at work so therefore they will have nonchalant attitude to work and they will not want to work with seriousness because they know they are not been treated with equal opportunity. These are the ethical issues that need to be addressed in an organisation so that there will be equal opportunity to all no matter the age, sex, religion or colour.
EMPLOYMENT REGULATION: This are the laws governing employment related issues which might happen to employees in an organisation. For instance transfer of employment contracts and how employee are been protected during transfer of contract and takeovers of a contract from another organisation to another. There should be fairness and employees should be treated with justice especially when a company is winding up, the employer should pay a reasonable amount of money to the employee, which shows that they have business ethics in discharging their duties by treating their employees in a good manners. This issues is affecting the business organisation today, and a lot of big organisation has good employment regulation for their employees because they want the offer the best for their employees because they knew people are aware of their rights and duties so they will not want to take their employees for granted they always give them the best and provide a conducive environment for them to work. They are make sure they pay their employees good working conditions and good salaries so that they too can work since they are been paid for the services they render. Both parties in a business should show ethical behaviour in a business so that the business can be productive and successful, they should be sincere in all their dealings and they should work hand in hand so that the aims and objectives of establishing the business can be achieved by all the stakeholders.
DIVERSITY: This is made up of different people from different national origin and nationality. The employer must understand that different people come from different background and culture therefore the employers must not discriminate or bias in any form, the employer must treat its employees the same way and make the working environment conducive and safe at all time. When employer treat all its employee the same way and give them equal opportunity both people with disabilities and others with different religion or belief, the working environment will be conducive and the performance of each employee will be effective and the business performance of the organisation will be positive and productive and the organisation business performance can be termed ethical because the organisation is behaviour is good towards its employees.
How business objectives are affected by ethical considerations:
Ethical considerations help a business to achieve its aims and objectives of the business. Ethical considerations is very important in a business when business are done ethically the business will be profitable and meet the expectation of its stakeholders. For instance a good example is child labour in some cloth retailer in the United Kingdom where the production plant is in Asia, the workers are paid below the minimum wages and also subject to poor working conditions. This is noted to be unethical to business and to workers who are being paid below the minimum wages because according to the labour law, all workers must be paid minimum wage and when workers are paid below the minimum wages it is termed to be unfair.
Abraham Maslow in his hierarchy of needs theory said the environment can affect our thinking if we are not careful about our environment and our thinking and attitude in our environment. If a business is consider to be business ethic, that business should focuses on the ethical consideration like Profitability's and meeting the stakeholders expectation, therefore the business will be termed to be ethical. If a business follows ethics it will achieve the business objective and the business will be successful.
The following are the business objectives:
PROFITABILITY: The aims and objectives of every business is to make profit although some organisation are formed for charity purpose but most business are formed because they want to make profit and meet the demand of its customers at all time.
ETHICAL AND SOCIAL RESPONSIBILITY: The purpose of every business objective is based on the belief and how to make its environment friendly to customers and safe. Some business also belief to take care or provide for the less privilege in our society especially the disabled who need special care, for instance in the UK the government provide special disable toilet for all the disable and they can make use of the toilet in all the public places.
MEET THE STAKEHOLDERS EXPECTATION: Every business is formed by people who are responsible for the affairs and who has interest in all the activities of the organisation. There are various stakeholders who are part of the success and management of every business in an organisation. For examples, customers, suppliers, employees, shareholders and communities are all stakeholders in an organisation who contribute to all the activities in an organisation. The aims of every business are to meet the expectation of all the stakeholders because they are part of the decision maker and they contribute to the success of the business.
SALE GROWTH: The aims of most business are to increase its sales. Expand and open more branches and make names because there are so many organisations that are competing with one another so most organisation want to offer the best customers service to all its customers and offer good customers satisfaction to all its customers all time because of strive market competition.
The following are some of the ethical issues of an organisation:
TREATMENT OF CUSTOMERS: An organisation should treat its customers with good customer's service and provide an enabling and safe environment for its customers. Organisation should provide after sales service and offer its customers and show ethical behaviour towards its customers at all time. It will allow a good customers relationship between the customers and the organisation.
TREATMANT OF EMPLOYEES: They should treat its employees with fairness in all its dealing by provide an enabling environment, give promotion to employee at when due, they should also provide training and recruitment should be done without bias or sentiment, these are some of the ethical behaviour that should be adopted by an organisation in order to show employees that the organisation support issues regarding corporate social responsibilities.
WORKING CONDITION: An organisation should provide an enabling and conducive environment for its customers, employers, suppliers, distributors and also other stakeholders so that there would be safe and accident free environment at all time. This will show how an organisation values its customers, suppliers and other stakeholders. It is the social responsibilities of an organisation to show that they provide a conducive environment and protect the image of all its stakeholders by promoting unfair trade, good working conditions.
CORPORATE BEHAVIOUR: An organisation must be ethical when dealing with other organisation and people they are doing business with in order to protect their image and have a good dealing with other organisation which will have a positive effect on the organisation as a whole. Organisation that has a good dealing with all its stakeholders will always progress and have a good understand with its stakeholders and the work force. If an organisation follows business ethics the business will be profitable and meet the desire of its stakeholders.
Implication for a business and its stakeholders to operate ethically:
Business cannot operate without the stakeholders they contribute immensely to development of an organisation. They contribute to the development of a business and they take active roles in the development of the business and they ensure they contribute their own quota to the development of the business. There are various stakeholders in an organisation. The following are various stakeholders in an organisation.
The diagram below shows various stakeholders in an organisation;
Knowing your stakeholder, Available online at http://www.bized.co.uk/educators/level2/busactivity/activity/knowing11.htm Accessed 14/11/10
The following are the implication of a business that is done properly and what happened if all the stakeholders do things ethically:
MARKETPLACE ADVANTAGES: A business that is done in a manner that is appropriate and follow the business ethics by conducting itself in a good and reputable ways has the advantages of taken over the marketplace and dominating the market environment and be the major player in the industry. The organisation will be know and well recognise by all. Most people will want to do business with any organisation that abide by the business ethics especially organisation that cater for all its stakeholders and give them maximum satisfaction in all its dealing. The organisation will have value and most of the stakeholders will always want to do business with such organisation because they know they have good business ethics. Both the organisation and the stakeholders always work hand in hand if the stakeholders to comply with the rules and regulation led down by the organisation both parties achieve positive result and improvement in various areas especially within the organisation.
INVESTMENT AND GROWTH: When business is done properly both the organisation and the stakeholders are affected because the business will grow and also many people will want to invest into the business and also the business will be known in the market and therefore there is possibility for expansion which will make the organisation to be well known and be the major player in the industry.
EMPLOYEES PERFORMANCE: This will lead to employees' performance in term of productivity and also it will result into cordial relationship between the employees and all the stakeholders with an organisation. Business ethics give morals in an organisation because employees know that their rights and safety are well protected which will make them to perform better and work together with other members of the organisation as a team in order to have positive result.
DEVELOPMENT: When business is done properly by an organisation and the organisation ensure business ethics is practice within the organisation, both the organisation and the stakeholders work together to ensure things are done properly there will be development in the organisation which will result development of the organisation. If the stakeholders contribute effectively to the development of an organisation there will be development, and the moral of the company will be build and also increase the productivity of the organisation.
BUSINESS GOAL: It helps the organisation to achieve common goal, organisation and stakeholders practice ethical value which help to achieve common goal. The organisation and the stakeholders practice ethical value which enable a business to done ethically which has positive impact on the organisation a whole because the business is able achieve its aims and objectives since the organisation and its stakeholders plays their roles very well for the success of the organisation in order to achieve common goals.
The following are the negative effect of operating a business unethically in the society:
BAD REPUTATION: The organisation will be known to have a bad reputation since the general public will be aware that they are not doing business ethically which will have a negative impact on the organisation. For instance the issue of BP, the lapses about the organisation was made known to the whole world because it fails to operate its business ethically they did not make adequate provision for the safety of lives of its employees.
The made the organisation to have a bad reputation. An organisation that is not doing business ethically will always have a bad reputation because this will have a negative effect on its employees and the organisation as a whole.
LOW CUSTOMERS: A business that has a bad reputation and will have a negative effect on the business, the business will lose some of its potential customers and sales will drop which can result into closing up of the business since they are not operating ethically. Most people will not want to do business with the organisation and also this will have the stakeholders since they are part of the organisation. They will not be able to make the money they have invested into the business since the sales of the business is affected especially the shareholders who have invested their capital into the business. They will not be able to make the capital that they have invested into the business and the business might turn out to be a failure. These are some of the negative effect of a business not operating ethically in the society.
A business organisation that operate ethically will benefit by practicing business ethic in the society because the business will flourish and grow when a business organisation provide a conducive environment for its employees and also make sure that their safety is guaranteed in the working environment such business organisation can be referred to be practicing moral business ethics and the business will expand and sales will also be increased since such a business will pull more customers from different angel. Therefore a business organisation that operates ethically will be successful and meet the expectation of its stakeholders.
Also a business should provide certain obligations for the local communities who are part of the stakeholders, when a business take part in local communities development they will be recognise in the society and also they are contributing their own quota to the development of the communities since they are part of the communities such business is practicing business ethic since they are part of the business organisation. I will conclude that business organisation can benefit when they practice business ethics because the business will grow and also make maximum profit because such business organisation is operating ethically.