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The word ethics comes from the Greek ethos, meaning something like morals. In fact, ethics is defined as the systematic reflection on what is moral. In this definition, morality is the whole of opinions, decisions and actions with which people express what they think is good or right. So, in short, to think ethically, you need to systematically reflect on what people think is good or right. Ethics is not a manual with answers on how to act. It is only a search for the right kind of morality. We can distinguish two kinds of ethics. The descriptive ethics is involved with the description of existing morality. It is about facts. Descriptive judgments are therefore true or false. On the other hand, there is the prescriptive ethics, also known as the normative ethics.
Utilitarianism is a theory in normative ethics holding that the proper course of action is the one that maximizes utility, specifically defined as maximizing happiness and reducing suffering. Classic utilitarianism, as advocated by Jeremy Bentham and John Stuart Mill, is hedonistic. It is now generally taken to be a form of consequentialism, although when Anscombe first introduced that term it was to distinguish between “old-fashioned Utilitarianism” and consequentialism. According to utilitarianism the moral worth of an action is determined only by its resulting outcome although there is debate over how much consideration should be given to actual consequences, foreseen consequences and intended consequences. Two influential contributors to this theory are Jeremy Bentham and John Stuart Mill. In A Fragment on Government Bentham says ‘it is the greatest happiness of the greatest number that is the measure of right and wrong’ and describes this as a fundamental axiom. In An Introduction to the Principles of Morals and Legislation he talks of ‘the principle of utility’ but later prefers “the greatest happiness principle.”
Utilitarianism can be characterized as a quantitative and reductionist approach to ethics. It is a type of naturalism. It can be contrasted with deontological ethics, which does not regard the consequences of an act as a determinant of its moral worth; virtue ethics, which primarily focuses on acts and habits leading to happiness; pragmatic ethics; as well as with ethical egoism and other varieties of consequentialism.
Business Ethics importance to business and to the society. (P2.1)
Ethics are the backbone of American industry, well, they should be. Whether an organization has good or bad ethical standards, ethics is an issue for all people. Ethical problems arise not only from the difficulties experienced in making a valid moral judgment, but also from practical obstacles to the execution of even a correct decision. Often, it is harder to go through with a morally correct decision even though you know it is the right thing to do. More often than not, the temptation to take the easy way out is overwhelming.
There are many definitions of ethics, but, according to author Herbert Johnston, ethics is concerned with two things: human conduct and what ought to be done. It also involves people s perceptions about what should be done. People have duties to do what is right and to not hurt other people. More or less, ethics involve obligations. Johnston also defines ethics as a practical, philosophical science by which we may reach conclusions concerning the rightness or wrongness of voluntary acts as related to our last end. Johnston is saying that ethics are judgments based on society s set moral standards that result in good outcomes or bad outcomes, depending on the goodness or badness of the judgment. More specifically, business ethics are an attempt to develop and apply basic principles in the area of human economic relations.
With the definition of ethics now clarified, the reasons for being ethical arise. Why do/should businessmen act ethically. Based on Ray Baumhart’s 1998 survey of 1,031 businessmen, the most influential incentive for being ethical was a man s personal code of behavior. Most people are ethical because of what they believe to be right. Most people want to take the credit for doing the right thing when they will be recognized or even rewarded. The true test is seeing what people do when no one is looking. The following lists are the other top choices in descending order of importance to the surveyed businessmen: formal company policy, the behavior of a man superior, the ethical climate of the industry, and the behavior of a man s equals in the company. From these rankings, it appears that when a businessman acts ethically, he attributes it to his own ability to resist pressure and temptation, with some credit due to his superiors and the company policy. People want the reputation of being ethical. They feel like they are a good person if they are known as being ethically good. On the other hand, the human reluctance to blame oneself for ethical failings helps to explain why our respondents [to the survey] rank personal financial needs as least important of the five factors influencing unethical behavior .In some instances, people believe good business is good ethics (Lewis 48). Of those Baum hart surveyed, 98% believed that sound ethics is good business in the long run. However, after being questioned further, and when defining good business as maximized profit, then most disagreed that good business is good ethics. They stated that good ethics are not going to bring in maximized profit. Others argued that you can catch more bees with honey than with vinegar. This study leads one to conclude that businessmen are only ethical to make they look good and all is fair when it comes to making a dollar.
The popular image of today s American businessmen includes the notion that they are relatively unethical. The standard consensus seems to think that most businessmen will do anything, honest or not, for a buck. An overwhelming 77% regarded business as a dog-eat-dog proposition. The sources of this popular image of businessmen are, of course, personal experience, but also, the stereotype is produced by communications media (television, radio, daily newspapers, and weekly magazines), plays, movies, and political speeches. Unfortunately for businessmen, their wrongdoings and shortcomings are what most often make the news. This negative press gives the overall impression that businessmen are unethical. Are they really unethical, or are they just getting the bad end of the deal due to negative press.
According to Sal Marino’s study, the results are bittersweet. Although the majority of those interviewed said they had never been propositioned to do anything unethical at work, a relatively high percent of those who had been propositioned had indeed done the dirty deed that they were asked to do.
Marino made the following comment on the results of his study:
The good news is that seventy-six per cent of the respondents said that they had never been asked (or ordered) to do anything they considered unethical pertaining to work. The bad news is that twenty-four per cent confessed that they have been asked (or ordered) to do something that they considered unethical. And the really bad news is that forty-one of those asked eventually did the dastardly deed that was requested of them without objecting.
The ever-prodding Marino then asked the respondents what they would do if they discovered that their employer was asking them to do something unethical, dishonest, or unlawful. An alarmingly low five per cent said they would quit on the spot, another nine per cent would look the other way, and an overwhelming majority, seventy-eight per cent, would try to talk to their bosses or try to resolve the problem in some way that would not cause them to lose their job. The remaining eight per cent were uncertain about what they would do — or they refused to fess up. Today, Americans, workers and non-workers, have developed an alarming tolerance for intolerance. People are not bothered as much by dishonesty, crookedness, or lack of respect. They have come to think of it as normal. People just do not expect anything more than a crooked businessman these days. In an interview with Marino, Alvin Toffler, a futurist, replied that, the sophistication of deception is increasing at a greater rate than the technology for verification. That means the end of truth. Many of our leaders are liars, skilled at deception. Lying has become tolerable, if not acceptable. (Bill Clinton: Are you listening?) Accountability has slipped. Lawyer lies, those technically true but misleading statements are prevalent. Why is this happening? Two reasons: Greed and poor ethics. Present day Americans are not ethical. They are selfish, deceitful, egomaniacs only looking out for them. Today, if the economy is good, it is tolerable to be bad. Today, if you merely apologize for a heinous crime, it is tolerable to be forgiven. Today, if you misrepresent the goods, it is tolerable if you are selling yourself. Today, if you work for a cheater, it is tolerable as long as you benefit from it (Marino 23). Ethical leaders, honest people who serve rather than deceive, will be increasingly cherished in the future. Right now we live in a time when the ends justify the means.
2.2 The social responsibility and the environmental consideration (P2.2)
The growth of large multinational corporations (MNCs) in recent decades has produced some undeniable benefits. The ability of large corporations to seek out low-cost production opportunities provides a benefit to consumers in the form of lower prices. The prices of many manufactured goods, such as televisions and home appliances, have declined in real terms through improvements in technology and cheaper labor. In addition to low prices, large corporations are also capable of providing a familiar product of consistent quality in different regions of the world. For example, the fast-food restaurant chain McDonald’s serves food with similar standards in more than 30,000 locations in over 120 countries. Large corporations offer some advantages to their employees, who are more likely than workers in small firms to receive fringe benefits such as health care and pensions. Average wages in the U.S. for employees in firms with more than 500 employees tend to be higher than in firms with fewer employees. Also, many large corporations that have been in existence for decades are unlikely candidates for bankruptcy (although there are some recent exceptions to this such as United Airlines and K-Mart). The stability of large corporations is attractive to investors seeking security and relatively stable returns. Large corporations implicitly recognize their interconnection with society in their donations to non-profit organizations. For example, Wal-Mart donated a total of $200 million in 2002 to thousands of organizations. Exxon-Mobil describes how they helped create the Save the Tiger Fund, which has collected about $9 million since 1995 to fund conservation projects around the world. General Motors reports on their cooperative efforts with Detroit-area schools to curb youth violence. In the late 1990s, annual contributions by American companies and their foundations amounted to over $8 billion.
Perhaps the most obvious responsibility of corporations is that they obey existing laws. The regulation of corporate business practices has received increased attention in response to a wave of corporate scandals in the last few years. While the specific circumstances vary in each scandal, the primary issue has been the exaggeration of profits, and consequently stock prices, using unethical or illegal accounting practices. In most cases, top corporate executives sold billions of dollars’ worth of stock at inflated prices, while ordinary investors suffered large losses when the firm’s financial problems eventually became known.
The accounting scandals in recent years can be linked to the widespread use of stock options as a means of executive compensation in the late 20th century. Many economists supported this practice – arguing that executives would manage corporations for the benefit of all shareholders if their compensation were linked to the firm’s stock price. In addition to a regular salary, top executives are given shares of the firm’s stock.
Unfortunately, economic theorists and corporate regulators failed to address a critical problem with the practice. Executives with large stock holdings also have an incentive to temporarily inflate the firm’s stock price and sell their shares at elevated prices. By the time the firm’s stock price eventually falls, executives can make huge profits while those holding the stock during the crash lose billions.
Complex accounting methods often permitted executives to keep losses and liabilities off the books. Consider the case of WorldCom, the telecommunications firm whose stock price fell from over $60 a share to just pennies as it became evident that the company’s profits had been overstated by nearly $4 billion. While WorldCom’s bookkeeping deception has been the largest measured in dollars, the scandal at Enron is perhaps the most famous because of its fast-paced culture of greed and influence at the highest levels of government.
Social and Environmental Impacts of Large Corporations
Economic activities often impact those who are not involved in the activity. For example, a corporation manufacturing automobiles generates pollution and the cost of this pollution is borne by nearby residents. External costs (or benefits) arising from economic activities are referred to as externalities. While firms of any size can create externalities, multinational corporations can use their political influence to avoid bearing responsibility for significant external costs.
“Given the close relation between minimizing costs and maximizing profits, it is natural to assume that an organization that seeks profits and has significant political power will feel some motivation to use that power to externalize costs, where possible. This motivation may be held in check by ethical considerations, by regulation, or by a fear of backlash from groups that might harm the organization; for example, consumer groups, or others who could mobilize effective public opinion.”
The benefits firms obtain from being able to impose externalities and shift costs to others are difficult to measure in economic terms. The only available estimate of the total public cost incurred to support the operations of private corporations was $2.6 trillion for 1994 in the United States.
2.3 Apply stakeholder theory and virtue to Avco Environmental Services.(P2.3)
Pioneering work in the area of stakeholder management was provided by Freeman (1984), who outlined and developed the basic features of the concept in a book entitled Strategic Management: A Stakeholder Approach. Freeman’s work, even though it formally recognizes the importance of corporate constituents in addition to shareholders, leaves the 406 Academy of Management Review April status of the stakeholder concept as theory unclear. Donaldson and Preston (1995) argued that stakeholder theory explicitly or implicitly contains
Theory of three different types-descriptive/empirical, instrumental, and normative. Descriptive/ empirical formulations of the theory are intended to describe and/or explain how firms or their managers actually behave. Instrumental theory purports to describe what will happen if managers or firms behave in certain ways. Normative theory is concerned with the moral propriety of the behavior of firms and/or their managers. Briefly summarized, descriptive/empirical, instrumental, and normative theories address the questions: what happens. Proponents of stakeholder theory strive to describe what managers actually do with respect to stakeholder relationships, what would happen if managers adhered to stakeholder management principles, and what managers should do visa-a-versa dealing with firm stakeholders. Donaldson and Preston (1995) concluded that normative concerns underpin stakeholder theory in all of its forms. Although quality scholarship on the normative facets of stakeholder theory is indeed needed, instrumental and descriptive/empirical aspects need attention as well. Thus, this article focuses on the instrumental realm. It should be noted that the term instrumental theory is used here in a manner that differs from its historical usage. Traditionally, in the philosophy of science literature, instrumental theories were deemed useful for explaining certain phenomena regardless of their truth or falsehood (Angeles, 1992). In short, they worked, albeit (perhaps) for the wrong reasons.
The theories themselves were used as instruments to achieve some ends.
The usage of instrumental theory employed in this article follows that used by Donaldson and Preston (1995), which appears to be original. For these authors, instrumental theory establishes (theoretical) connections between certain practices and certain end states. There is no assumption that the practices will be followed or that the end states are desirable. In instrumental theory, statements are hypothetical-if X, then Y or if you want Y, then do X. In this sense, X is an instrument for achieving Y. The truth or falsehood of instrumental theories of this latter type is an important issue.
3.1 The moral obligation of employee and employer relationship(P3.1)
Employers can expect staff to fulfill certain obligations during training.
Understand and abide by all aspects of the training agreement.
Make all reasonable efforts to complete the training and acquire the required skills.
Inform you of any concerns they have with the training or training provider.
Handle training resources supplied with reasonable care.
Treat proprietary company knowledge learnt during the training as confidential.
Respect the rights of colleagues during the training.
Apprenticeships and traineeships
Apprentices have to observe work and training responsibilities set out in the Apprenticeship/Traineeship Training Contract; Training Plan and the National Code of Good Practice in New Apprenticeships.
These responsibilities include:
Making every effort to acquire the skills and knowledge required to successfully complete their apprenticeship or traineeship
Attending training sessions or supervised workplace activities and taking advantage of learning opportunities.
As an employer you have both legal and moral obligations when training your staff.
All employers who provide training to their staff are obliged to:
Provide a healthy and safe training environment for all staff including those with special needs such as disabled employees
Ensure staffs do not experience discrimination or harassment during the training
Provide adequate supervision and support during training
Have appropriate insurance policies for staff who undertake specialized training, such as heavy machinery training
Inform employees of their rights and responsibilities throughout the training
Commit resources necessary to complete agreed training such as safety equipment or computer hardware
There are obligations that are not enforced by law, but represent good workplace practice during training. These include:
Reporting and record keeping of training and its outcomes.
Adequate resources to support the business while staff are absent for training.
Management strategies to deal with issues associated with the training such as individual problems with the training or changing staff roles.
Informal in-house training
For informal in-house training, create a written training agreement to be signed by you and your staff. This will ensure that all parties understand what they can expect from one another.
A training agreement will provide you with a reference document from which you can address any concerns that might arise in relation to the training.
Throughout the training, employers must also observe their usual duties and statutory obligations, such as:
Occupational health and safety
Duty to pay appropriate remuneration
3.2. Own opinion about Dave Lamb and Angela van Wilgenburg’s reactions towards this situation (P3.2)
Chantale Leroux performs as a clerk for Avco Environmental Providers, a tiny toxicâ€waste disposal company.
The company has a contract to dispose of healthcare waste from a neighborhood hospital. During the program of her perform; Chantale comes across paperwork that recommends that Avco has truly been disposing of some of this medical waste in a neighborhood municipal landfill. Chantale is shocked. She is aware this practice is illegal. And even though only a tiny portion of the health-related waste that Avco handles is being disposed of this way, any quantity at all seems a worrisome menace to public health.
Chantale gathers with each other the proper documents and will take them to her instant superior, Dave Lamb. Dave says, “Look, I do not feel that sort of point is your problem, or mine. We’re in cost of recordâ€keeping, not producing selections about where this thing gets dumped. I propose you drop it.”
The subsequent day, Chantale decides to go one step more, and speak to Angela van Wilgenburg, the company’s Operations Supervisor. Angela is clearly irritated. Angela says, “This is not your concern. Seem, these are the sorts of costâ€cutting moves that allow a tiny firm like ours competes with our large rivals. Apart from, absolutely everyone understands that the regulations in this location are overly cautious. There’s no genuine danger to everyone from the very small sum of health care waste that ‘slips’ into the municipal dump. I consider this issue closed.” Chantale considers her predicament. The message from her superiors was loud and clear. She strongly
suspects that creating further noises about this issue could jeopardize her task. More, she typically has faith in the company’s management. They’ve often appeared like truthful, reliable individuals. But she was troubled by this obvious disregard for public safety. On the other hand, she asks herself whether or not possibly Angela was right in arguing that the danger was minimal. Chantale seems up the phone amount of an aged friend who worked for the regional newspaper.
3.3. Own opinion about organizational integrity and making integrity explicit of Avco Environmental Services (P3.3)
Environmental ethics considers the ethical relationship between people and the natural world and the kind of decisions people have to make about the environment:
Should we continue to cut down the rain forests for the sake of human consumption.
Should we continue to manufacture petrol-driven cars when we have the technology to make cars which do not pollute the environment.
Should we knowingly cause the extinction of other species.
What are our environmental obligations to future generations.
Should humans be forced to live a simpler lifestyle in order to protect and preserve the environment.
Most people recognize that our planet is in a bad way and we all seem to have an opinion on environmental issues, such as climate change or the use of four-wheel drive cars in cities. The importance of environmental ethics is brought home daily by the news of global warming and its effect on our lives, both now and in the future.
There has been a rapid growth in knowledge and technology, so that humans now face choices we have never had to face before that affect the continuation of humanity and the world within which we live.
Environmental ethics has grown in importance in our times because to make no decisions about environmental issues is to decide in favor of the status quo, and that, we are told, is no longer an option.
However, there is no agreed ethics for environmental issues, and no international environmental code. Environmental ethics simply tries to answer the questions of how humans should relate to their environment, how we should use the Earth’s resources and how we should treat other species, both plant and animal, but there are also those who are of the opinion that constant change is simply a fact of this planet and the planet will readjust to new conditions as it did in the past. There are differences among scientists as to the exact cause and nature of environmental problems and how to solve them, and so there are differences in the approaches to environmental ethics; some think the traditional forms of ethical thought are good guides and some that these traditional forms (at least in the West) are too human-centered.
There are also the views of Christians and other religious believers who have a particular take on their role and responsibility towards the natural world.
4.1. Current issues in Business Sphere (4.1)
Avco Environmental Services is a small, toxic waste disposal company. It has a contract to dispose medical waste from a local hospital. However, some of the waste was actually disposed in a local landfill; the company can save lots of money from the transportation and disposing technology of toxic wastes. This practice is illegal and can cause threaten to public health. Avco noticed the problem but it determined to ignore it. Avco thought if the problem is being exposure, their competitors will get more opportunities and therefore, they will receive bad reputation and less profit.
As far as I am concerned, this action violates the business ethics. It ignores the public health in order to make more profit and have fewer costs. The company only cares about its own profit. Avco Company should deal with the problem as soon as they find it. Business ethics is the basic principle for a permanent firm.
The company has a contract to dispose medical waste from a local hospital.
During the course of her work, Chantale comes across documents that suggest that Avco actually disposed of some of this medical waste in a local municipal landfill. Chantale is shocked. She knows this practice is illegal. Even though only a small portion of the medical waste that Avco handles is being disposed of in this way, any amount at all seems a worrisome threat to public health. Chantale gathers together the appropriate documents and takes them to her immediate superior, Dave Lamb. Dave says, “Look, I don’t think that sort of thing is your concern or mine. We’re in charge of recordkeeping, not making decisions about where this stuff gets dumped. I suggest you drop it.” The next day, Chantale decides to go one step further, and talk to Angela van Wilgenburg, the company’s Operations Manager. Angela is clearly irritated. Angela says, “This isn’t your concern. Look, these are the sorts of cost cutting moves that let a little company like ours compete with our giant competitors. Besides, everyone knows that the regulations in this area are overly cautious. There’s no real danger to anyone from the tiny amount of medical waste that ‘slips’ into the municipal dump. I consider this matter closed.”
Chantale considers her situation. The message from her superiors is loud and clear. She strongly suspects that making further noises about this issue could jeopardize her job. Further, she generally has faith in the company’s management. They’ve always seemed like honest, trustworthy people. But she is troubled by this apparent disregard for public safety. On the other hand, she asks herself whether maybe Angela is right in arguing that the danger is minimal. Chantale looks up the phone number of an old friend who worked for the local newspaper.
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