In the wake of recent, well-publicised ethical failures in the first few years of the twenty-first century, public attention and the concern of leaders in business and government have focused on the moral climate of corporate organisations. Corporate scandals have shaken the international business community over the last few years and seem to have reanimated many people's interest in ethics. As a result, codes of conduct, ethics management programs and ethics offices are being created with breathless haste. Even sceptical corporate executives are beginning to acknowledge that there may be more to ethics than "motherhood and apple pie."Many have even come around to the idea that ethics is something that has to be institutionalised, resourced and managed. To the extent therefore that they are interested in keeping their organisations out of trouble and limiting their potential liabilities, these "upright" captains of industry now stand ready to invest time, effort and money in the promotion of ethics. In the face of this wave of unprecedented interest, many business ethicists have concluded that the business community no longer sees business ethics as an oxymoron. In fact, an investment in business ethics has become a pre-requisite for an organisation's continued participation in formal business networks (Mollie Painter-Morland, 2008 :1).
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Ethics is the field of philosophy concerned with how we ought to act. It is a broad field. While philosophers hold different views about the proper definition of right action, they will all agree that one of the goals of their discipline is to provide such criterion. Philosophers see ethics from three perspectives/divide ethics into three branches, namely: normative ethic, meta-ethics, and applied ethics. Normative ethics is the branch of ethics that largely have to do with the notion of moral obligation. Meta-ethics on the other hand is the branch of ethics that is the most amorphous of the areas of ethics and includes topics such as metaphysics of morality, moral epistemology, the linguistic analysis of moral claims, the nature of moral motivation, etc. Applied ethics covers a number of different topics as well: business and professional ethics, biomedical ethics, environmental ethics, etc
The Macquarie Dictionary defines ethics as "â€¦ a system of moral principles which human actions and proposals may be judged good or bad or right or wrong". Viewing this definition from business perspectives, the observation (or non-observation) of ethics in business will significantly shape the behaviour of companies. In a popular mind, business ethics are inextricably linked to notions of honesty, integrity, trust, accountability, transparency and social responsibility (KPMG, 2005:6). Business ethics is the study and examination of moral and social responsibility in relation to business practices and decision-making in business. Business ethics like any other ethics boils down to respect. A manager has a moral and social responsibility to the company's best interest, the employees they manage, and most of all the customers they provide goods or services to. Every day managers within organisations and businesses make decisions that concern their employees, customers, products, and services. The ethical portion of this is how those managers take responsibility for those decisions and how morally right they are to those they affect. For instance if a manager is required to fire an employee the manager must use business ethics to do so and can be held accountable by law if they do so with discrimination or without regard for the persons rights.
There are also ethical issues arising when dealing with products and services. The products or services provided by organisation should be as described or advertised. Managers are responsible socially and morally to the treatment of employees, the services and products they provide and the treatment of their customers.
In communities and organisations employees or volunteers are the backbone of the organisation. They do the work needed to provide the service or product demanded by the customer. They put in the time and effort to produce these things and as such deserve respect and the right to work. Ethically, managers could treat these people with little to no respect but then they would have no one to do the job for them. Sometimes managers or owners will try to get around things like the wage law, or discrimination laws. It is against the law to discriminate based on race, sex, disability, or sexual orientation. However it happens. It is also against the law to pay less for work than the Federal Minimum Wage. This too however happens. Managers are held responsible for upholding these laws and treating their employees with respect.
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When handling a service or product a decision making personnel is ethically responsible for providing to the public what has been described in the manner it has been promised. Especially in a case were the customer pays in advance. When paying, the customer trusts the organisation to provide them with exactly what they were told they would receive. If it is an item it should look, weigh, feel, smell, or taste like it is expected to. If a manager advertises that the company is selling oranges and the customer is delivered apples this is unethical. In terms of services provided, as an example, if a customer pays thirty five pounds for a tanning session for twenty minutes and the tanning bed is cut off at ten minutes, the manager is ethically responsible to make amends somehow for the time lost that the customer paid for.
The old adage the "The customer is always right," should be held as true. Regardless of the fact that the customer can be wrong, without their patronage the products or services provided will not bring in any revenue without them. When a customer is wrong the manager should do all that they can to calm a customer and treat them with respect. However, there is a point where things can get out of hand and the manager has the responsibility to not only themselves but all involved to solve the situation as peaceably as possible, even if that means bringing in the authorities.
In the business world today, issues of trust, respect, fairness, equity and transparency are gaining more attention. Business ethics includes organisational values, guidelines and codes, legal compliance, risk management, and individual and group behaviour within the workplace.
Today, business ethics has become an area of great concern in both corporate culture and academia. Companies such as WorldCom and Enron have caused people to re-evaluate philosophy and business. Ethics can be defined by the morals that people and companies hold. Although internal and external forces influence businesses, there are three issues that affect issues in business. These three issues are systematic, corporate, and individual.
To truly understand each factor one has to understand how each of these issues differs and how they influence the business itself. Systematic issues analyse ethical values in economic, political, legal, and other social systems in which the business operates (Velasquez, 2006). An example of this would be a question of morality about the current laws pertaining to accounting systems.
Laws influence the actions of people because they stem through consequences with the local or federal government. People tend to be scared of a higher authority more than self punishment.
The second factor is corporate issues which are issues of morality of internal activities such as policies, practices, and organisational structure (Velasquez, 2006). Corporate issues are based on corporate cultures. If a company treasures capital gains more than human capital the company would then lay off employees to save money. On the other hand, a company that treasures its employees is more likely to take a cut and keep their employees. To say that one company is more ethical because of their decision lays in a company's moral standards.
The idea of moral standards stems from the third type of issue which is the individual issues. Individual issues are issues that are based on individuals within a company along with their behaviours and decisions (Velasquez, 2006). This includes the moral standards of individuals. Moral standards are standards that are set by the individuals themselves and by no other governing body. Hence, each individual has a right to stand for what they believe in.
It may be simple to take these three factors and state that this is common sense information; however, it is just as complicated to say that there can be one rule that can apply to every situation that is similar. In cases where individual morals differ from those of corporate or systematic, it is easy to assume that one would no longer pay attention to their place of business or the entity that is different. However, humans are prone to being victims of society and need to supply for their family. Knowing that something unethical is occurring at a place of business does not mean that the person will just walk away whether they have worked in small or large firms.
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Decisions of a business affect all tiers of the organisational structure which in turn affect the lives of all stakeholders of the company. Therefore, ethical standards have risen due to the current corruption in many large businesses. News reports of Nike and Merck have grabbed the attention for case studies and have become the top selling stories. The news ran the stories that exposed the fragile nature of the corporate worked to their affect on the country's economy.
Statement of the Problem
There is a strong conviction in the global economy that ethical conduct is an essential condition for running a business. Ethical behaviour at companies brings long term economical effects and creates a positive image. Moreover, it molds desirable relations with other actors in the economic life, such as customers, deliverers, employees, financial institutions, local communities, and media. Those relations are based on the confidence.
Abusing this confidence by applying unethical behaviour in business can bring only short-term profit. In a modern economy, where company image and prestige are important, such activities can affect a company's credibility and as a result, can diminish corporate value in the eyes of potential customers. It is of high importance to stigmatise reprehensible corrupt activities.
Economic conditions for running a business, the problems, and the challenges, have changed. Business ethics has become as important as productivity, work organisation, product quality and profit margins. System transformation and changes in the economic system have caused behavioural change among people who run their own firms. Business ethics is perceived to be a signpost of desirable behaviour in business. Moreover, a significant part of ethics in business is proper relations between all partners in the economic venture: employer - employee, deliverer - customer, manufacturer - consumer.
Nowadays, success is not the only measure of the economical activity. The activity is also evaluated from ethical point of view. Recently, business ethics has become an independent, growing discipline in the West.
One of the crucial conditions for reaching stable, competitive growth and profit the world over is to obey ethics as a principle in business. In this case, ethics is strongly bound up with reputation. The company, possessing all necessary resources, could respond to signals from the market, applying deliberate and well managed strategies.
If the market puts company's conduct into question, something more than efficient management will be needed. The company's code of business ethics tells everyone from worker to customer and investor what the company stands for and how to execute plans for products or services it markets. Though ethics has been recognised as an important element in today business concerns and there are many researches in different countries, little effort has been made to explore the role and importance of ethics in UK business practice. It is against this background that this study sets out to investigate the role and importance of ethics in UK business practice.
Aim & Objectives of the study
The broad objective of the study is to investigate the role and importance of ethics in UK business practice. Specifically, the study will attempt to achieve the following objectives:
Investigate the role of ethics in UK business practice
Investigate the importance of ethics in UK business practice
Investigate the influence of international ethics on UK business practice
Investigate the challenges ethics pose to directors of corporations, and employees of corporations.