We humans usually, talk about ethics - how we live our lives, the kind of people we should be and how we want our society or communities to function - is considered irrelevant, or even slightly pious. It is not seen as "businesslike" in a world where competition reigns and economic and financial growth is the only marker of success. It puts more emphasis on the need for ethical behavior in business today than ever before. While companies often talk about the values that underpin their philosophy and social purposes, recent events in the banking sector in particular has led some to wonder if companies behave ethically.
The business environment in a more complex and competitive marketplace has resulted in new pressures on traditional values and ethics on business decision-makers and executives. In recent years, has led a number of scandals publicized well known in the public outrage on deception and fraud in business and a demand to improve corporate ethics and responsibility. As institutions continue to be challenged, the issue of business ethics has become the subject of considerable attention.
EHTICS - - WHAT IS IT?
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Ethics is the study of moral standards. The American Heritage Dictionary offers these definitions of ethics: 'The study of the general nature of morals and of specific moral choices; moral philosophy; and the rules or standards governing the conduct of the members of a profession.' Ethics is a set of moral principles that are recognized in respect of a particular kind of human action or a particular group, such as medical ethics, legal ethics, ethics education that brings together people of the same profession. It is the study of standards of behavior which promote human welfare and "the good".
It is the study of business condition, behavior & result where issue of right and wrong are addressed. (Collins 1994; Watson 1994) states that many everyday business activities require the continuation of basic moral principles, such as sincerity, trust worthiness & co-operations. By its nature, a field of business ethics is controversial and there is no universally accepted criterion to solve. Business activity would be unattainable if business directors always lied, if buyers & sellers never trusted each other or if employers refused to ever help each other. Business ethics is an oxymoron (Collins 1994) which means bringing together of two apparently contradictory concepts. Business ethics is the study of standards of business behavior which promote human welfare and the good. Business ethics deals with the factors of business environment, corporate and individual issues in organizing and conducting business in an honest manner legally consistent.
TELEOLOGY: refers to moral philosophy, in which the act is considered morally right or acceptable if it produces some desired outcome, such as pleasure, knowledge, and professional growth, realization of self-interest, utilities, property, or even philosophies celebrity. Teleological assess the value of moral behavior, examining its consequences. Two important teleological philosophies are egoism and utilitarianism (Ferrell, John and Linda, 2007).
DEONTOLOGICAL: refers to moral philosophy that focuses on the rights of persons and on the intensions allied with a meticulous conduct rather than on its consequences. It just focuses whether the act is true or incorrect on ethical issues not considering on the desirability of the consequences (Crane and Matten, 2007).
Critically analyzing & evaluating the statements of Dr Barry Morgan, the archbishop of Wales.
Dr Barry Morgan, Archbishop of Wales, the views expressed by saying that all MBA graduates should be signed version of the Hippocratic Oath, after graduation as there is greater emphasis on the need for ethical business than ever. While companies often talk about the values that emphasize their philosophy and societal objectives, the recent crisis particularly in the banking sector, have raised many questions that companies did not act ethically. Dr Barry Morgan, Archbishop of Wales states that "The MBA oath is something worth considering because in the end conservative rule or directive cannot cure ethical blindness or rule out greed." However, as part of the conflict of interests between corporate stakeholders and the decision of the shareholders' to implement a set of ethical standards would have an impact on the costs and benefits. In addition, they have different views on ethics and in this era of globalization, companies must take into account different ethical values of society in which they operate. To complicate matters more, there are several versions of religions and spiritual. In some cases, spirituality can be used in place of secular ethics, religious ethics organization. Dr. David Morgan addressed in his speech that the MBA graduates are going to be the future business leaders & they should be aware of the business ethical standards & they should follow it. He strongly emphasized that the students should take the Hippocratic Oath like the doctors to perform their duties in the whole interest of the humanity in the same manner he wants that the graduate MBA students to be truthful & sincere towards their duties. Dr. Morgan stated that change is definitely needed after the MPs' expenses scandal and the banking crisis. As these scandals and the banking crisis have badly collapsed the economic and led to the financial recession in all over the world, and top of that the banks are announcing the big hefty bonuses to their employees, & MPs are misusing the public fund which have created anger among the general public. The view expressed by Dr. Barry Morgan is Deontological, which says that the actions are correct or acceptable if the ethics or the strategies under which those actions are conducted are morally right. He suggested that the ethical codes & principles of ethical theories should be seriously practiced in the business, so that the businesses can achieve the financial success. 'Confectionery giant Cadbury has told Sky News that ethical trading is good for its business - as well as African farmers' (Source: Sky News, 2011). Alex Cole global corporate affairs directorÂ explained why the company's Dairy Milk bars will carry the Fair-trade mark. Dairy Milk, Britain's best-selling chocolate bar became one of the biggest brands so far to adopt the Fair-trade badge. In fair-trade the Cadbury Company will provide the minimum guarantee wage to it cocoa producing farmers & if the prices are higher than they will pay the higher price, & in addition to that 150 dollar premium has been given to the farmer so that they can invest in their communities. This is one of good real business example in which a multinational chocolate company is following the business ethics, due to which it's maintaining the reputation among its consumers.
Critically analyzing & evaluating the statements of David Rosser CBI.
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David Rosser, Director, CBI Wales says that the business reputation has been on a downward trend for too long and its real concern for a number of growing businesses. Business reputation is integral to the success of the business and achieves the goals and objectives. In a nutshell, the company's reputation is what and how people think and express themselves, to organize, which is mainly achieved by two things, the quality of the product or services that have a direct and indirect impact on the businesses. His views means that the development of technology and increasing control of the media business are becoming more open to ethical standards of society & ethical standards of businesses appear in public inquiry at an increasing regularity. Nothing can be hidden from the public or consumers. David Rosser opinion suggests that the ethical standards in business are important, especially in the current situation, where companies have suffered setbacks due to the banking crisis. David Rosser following statement in the sense of implying that ethical behavior in business is important to develop and maintain the confidence of its employees and customers. Regaining the confidence of the employees & the customers is very important, as due to the financial crisis which started in 2008 in which many reputed companies like Lehman Brothers, Goldman Sachs, Enron, Satyam & General Motors to name a few practiced unethical business behavior, which led to economic crisis & financial recession & incurred heavy debts on the public shoulders. David Rosser says that every company wants to make profit & they are there to run the business, but the ways that take to make profits is very important they should follow the business ethics & when they make the losses due to the risk they take then that consequences of failure should be on the stakeholders or on the employees of the business & not on the public purse. David Rosser address the issue of banking situation where banks like Barclays & Royal Bank of Scotland are paying huge bonuses to their employees & stake-holders ( source: BBC 2011) when the economy is facing a lot of crisis. Malignancy public against these financial banks, companies & large business organization has increased fourfold by the fact that executives of these companies receive more millions of dollars in salary as a bonus. Rescue operations continued for many companies that went bankrupt during the crisis, governments use the money of the taxpayers that fuels public anger against the major's business organization. To recuperate the confidence and the poise, and maintain the brand image, David Rosser suggests an improvement in ethical standards in business activities.
Recommendation compliances with Dr. Barry Morgan:
Dr. Barry Morgan suggested that MBA Graduate should take Hippocratic Oath to a greater extent is somewhat correct, as it will help the future business leaders & managers to pursue their work with utmost integrity. It will help them to think more responsibly towards the co-workers, stake-holders, consumers. It will help them to perform their duties more honestly, rather than just thinking of obtaining the profits by any unfair means. It will help to create sustainable economic, social, & environmental prosperity worldwide. More & more B-School should emphasize on the education of ethical studies, like Harvard Business School. HR managers should work hard to find the correct employees for their companies who are morally strong & honest towards their goals. Business should work hard towards in following the business ethics, rather than just focusing on the profits.
After critically analyzing & comparing of both the statements and views expressed by Dr. Barry Morgan, Archbishop of Wales & David Rosser, Director, CBI, we can say that ethics plays an important role in the business organization. Dr. Barry Morgan States that every MBA graduate should take the Hippocratic Oath, as the doctors takes, gives the impression that he wants that the future business managers should strictly follow the ethical codes & principles. He wants the businesses should have social responsibility towards the society & they should not always think about making profits. He argues that at this time of economic recession banks are paying huge hefty bonuses to their employees is not good in public view. He suggests that the financial gain should not be the only motive of the business organization, whereas the businesses should work in betterment of the society, people & community. Dr. Morgan is a religious person & he expressed his views in that scenario. But in the real business world we can't describe what is ethical & what is unethical, as businesses follow only one golden rule is how they can make profits.
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However the views expressed by the David Rosser is little different from the Dr. Morgan's views. He welcomes the view of Dr. Morgan's that ethics are important, but didn't find any fault or objection if the big bank decides to pay hefty bonuses to their employees or managers. It's up to the business what they have to do, as Mr. Bob Diamond has told in his speech at the treasury committee meetings that they are providing the bonuses to their employees for their performance not for the failure (Source: BBC 2011). David Rosser says that as long as the businesses are not involving themselves in illegal & unethical practices, the profit they are making is justifiable.
It has become really essential for any business endeavor to follow the ethical codes & standards if they want to survive in the long run. Ethical practices in the business help the businesses to grow & reduce the malpractices which are growing day by day in the current period. Dr. Morgan's religious ethical suggestion helps businesses to have a good reputation in the eyes employees & consumers.