Ethics in a business sense is defined by examining ethical principles and moral or ethical problems that arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and business organizations as a whole. Having an ethical business or organization has become less of a moral choice and more of a standard practice. So when operating a company today, it is important to plan how one’s business will approach ethical conduct.
It may seem simple to say that every business should be ethical, but it simply is not as easy as that. It is important to plan one’s approach towards ethical conduct for many reasons. The degree to which a company’s focus towards ethics can vary, and factors may include, the size of the company, likelihood of fines due to poor ethical choices, and amount of money available to be allocated towards ethics training, etc… A company’s approach towards its ethics can possibly be cost efficient in the long run, but also costly in the short run.
The Top Ten Things You Need to Know About Approaches To Managing A Company’s Ethical Conduct
1. Poor ethical choices can possibly ruin an entire business or corporation and affect large groups of people. The most popular example of this is Enron’s completely unethical choices that were made which in turn has made Enron’s name synonymous with fraud and unethical behavior. Even though this is an extreme case, it is important to understand that unethical behavior can have extreme consequences.
2. The unconcerned or nonissue approach: Managers using this approach feel that they are only required to comply with what is legally required of them. They feel that it is a waste to spend money or time on establishing ethical standards or ethics training.
3. The damage control approach: This approach tries to prevent any scandals or controversy by hiding behind a code of ethics. Managers using this approach may not be afraid to bend the rules and perform some unethical behavior as long as the public views them as an ethically strong company.
4. The compliance approach: This approach is ethically driven, and managers make sure to have a clear and complete code of ethics and ethics training. Managers try to avoid any immoral situation and unethical behavior is punished. This approach has its employees just following the rules or ethical standards that are set forth by managers, so they may make some unethical choices if they can find a loophole.
5. The ethical culture approach: This approach has ethics as one of the company’s main focus. The company will engrain their ethical culture to the employee until they don’t just follow a code of ethics, but embrace it. This does require a rigorous and costly ethics training program, but most importantly all of the top managers must live by the company’s ethical standards and believe them.
6. It is important to create a very clear and thorough code of ethics. But it is more than having a code of ethics just to say a company has one, the company needs to take the time to create one that they truly believe in, and be sincere. It is also should be referred to when making decisions and be well known to all employees.
7. Managers should know that there are always ways to improve the ethical culture of their company. Managers can start by hiring employees that have higher ethical values and provide ethics training. Hiring more ethical employees can possibly change the trend of a company, while ethics training can better educate their current employees, or at least let them know that unethical behavior will not be tolerated.
8. Managers in any approach to ethics whether it is weak or strong should practice what they preach. It is important for your employees to not label their managers as a hypocrite.
9. Do not assume that your employees will always make ethical choices. It is important to trust your employees, but they may make unethical choices and a manager should always be prepared for the worst.
10. If a company is to be doing business internationally, then managers should really have a delicate approach to ethics because of the different cultures that a manager can encounter. Some different cultures can be offended easily, which could potentially ruin a business deal. Americans may not even know that they are doing something offensive, but it is important to research the country’s culture that you are visiting and act accordingly.
The Video Lounge
This is a very interesting video giving an example of how CEOs approach to ethics should be.
My Take
Ethics is more relevant today than it ever has been. It is something that’s unique to each company, and should be molded to make a company thrive. For some companies it isn’t necessary to spend a large amount of time and money on ethics training etc. It is important for managers to take time and resources to develop their company’s own unique approach to ethical conduct so that they can eliminate employees from making immoral choices and to avoid any legal headaches in the future.
References
“Business ethics – Wikipedia, the free encyclopedia.” Wikipedia, the free encyclopedia. N.p., n.d. Web. 29 Oct. 2010. .
Gamble, John, A. J., Arthur Thompson, and Iii Strickland. Crafting & Executing Strategy: The Quest for Competitive Advantage: Concepts and Cases. 17 ed. Boston: Mcgraw-Hill College, 2009.
Contact Info: To contact the author of “Top Ten Management on Approaches To Managing a Company’s Ethical Conduct,” please email Andrew Reed Ivanyisky at w0357191@selu.edu.
Biography
David C. Wyld (dwyld.kwu@gmail.com) is the Robert Maurin Professor of Management at Southeastern Louisiana University in Hammond, Louisiana. He is a management consultant, researcher/writer, and executive educator. His blog, Wyld About Business, can be viewed at http://wyld-business.blogspot.com/. He also serves as the Director of the Reverse Auction Research Center (http://reverseauctionresearch.blogspot.com/), a hub of research and news in the expanding world of competitive bidding. Dr. Wyld also maintains compilations of works he has helped his students to turn into editorially-reviewed publications at the following sites:
All people should have an understanding of ethics, and it is important to have an overview of ethic theories and systems. There are several types of ethic systems and theories available to choose from when making an ethical decision. This article will provide you with an overview of ethic theories and systems such as consequence, rights, human nature, relativistic, entitlement, and virtue -based ethics,
Consequence-based Ethics
This ethic system relies on using the consequences of actions to determine what choice to make. Consequence based ethics are based on the impact our actions will have on ourselves and others (Ethics terns). This type of ethic system considers several different options and the result of these actions when making ethical decisions (Ethics terms).
Rights-based Ethics
Rights-based ethics are based on the rights of people. These rights can be of a variety of natures. Human rights, legal rights, and moral rights are all types of rights that ethics can be based on. Rights-based ethics are concerned with the rights that come from being part of a community (Ethics Terns). For example, legal rights are based on a community that follows the same government. Also it is important to consider positive and negatives rights in rights-based ethics systems. Negative rights are rights to not be part of something, and positive rights are rights dealing if the right to receive something from someone else (Ethics Terms).
Human Nature Ethics
Human nature ethics are based on the behavior of humans. These ethics are not guided by an absolute power, but are based on the good or bad behavior of humans (Ethics terms). Religion is not a concern of these ethics.
Relativistic Ethics
Relativistic ethics are based on a person’s own life experiences. These ethics do not have absolutes, and they vary from person to person. Culture and up-brining play a role in relativistic ethics (Ethics Terms).
Entitlement-based Ethics
Entitlement ethics are when an ethical decision is based on completely selfish reasons. No one and nothing else is considered, and the impact the decision has on the person making the decision is the only impact considered.
Virtue-based ethics
This ethic style originated with Aristotle, and it is based on the character, intentions, and morals of an individual (Trevino, 2007). Motivation is also important to virtue-based ethics, and the community is often reflected in virtue based ethics. Virtue-based ethics do not focus on duty or consequences, but rather the morals of the individual.
This overview of ethic theories and systems is important to anyone learning about ethics. Understanding these theories and systems will help you make ethical decisions.
Reference:
Treviño, L. K., & Nelson, K. A. (2007). Managing business ethics: Straight talk about how to do it right (4th ed.). Hoboken, NJ: Wiley.
Ethics Terms. (n.d.). Defence Ethics Programme | Programme d’éthique de la Défense. Retrieved July 21, 2010, from http://www.dep-ped.forces.gc.ca/dep-ped/tools-outils/trms-eng.aspx#consequence
One might say ethical integrity is based on individuals, and another might say it is based on the upper level management in a company. Either way, one thing ethical business men will agree on is that ethical integrity can be the foundation for success in a company. The terms “ethical integrity” are words that are used to characterize a company as a whole, because it is applied to a company on every level. If a business plans to have longevity it must appear to be ethical in the eyes of the consumer, because if it doesn’t the company can quickly come to an end. Although ethical integrity is a simple concept to understand it is a very new phrase derived from the concept of business ethics which surface around the 1970s. Understanding the concept of ethical integrity is understanding the concept of business ethics on an individual basis. One must understand that although ethical integrity is a new concept, it has been around as long as there has been business. A recent example of the lack ethical integrity is the Ponzi scheme created by Bernard “Bernie” Madoff in the late 20th century which created 18 billion dollars in losses to millions of investors. In the world we live in we can clearly see the need for ethical integrity through the recent example above, but we must also understand that it is an individual choice.
The Idea in a Nutshell
The concept of Ethical integrity is consistent with abiding by the rules and regulations of the people, government and regulatory agencies, and a company’s bylaws in way that is honest with the consumers or stakeholders in a company. To achieve this concept people must commit to these ideals on an individual basis, but the difficulty comes in because the decisions to act according to what is the best ethically for the company depends heavily on that individual’s moral beliefs. For example, the Enron scandal that took place in the 2000s where Enron’s employees fabricated journal entries which caused the second largest bankruptcy in United States history. This could have been prevented if one person who knew what was going on would have possessed enough ethical integrity to speak out about what was going on. I would define ethical integrity as “consistent moral choices made by an individual that creates the identity of the company on a daily basis.” The most important thing to remember about ethical integrity is that it creates the Identity of the company and the employees who make it successful. The most unique thing about ethical integrity is that although you may not notice it, the choice to use it is in every form of business in the world.
The Top Ten Things You Need to Know About Ethical Integrity
1. Ethical Integrity is a choice. People can choose to do what is required as a professional or they can choose to do what they want. Most people understand that being ethical is a decision that is made based on what is best for the people or the company.
2. Ethical Integrity can reflect a person or company. If a person endorsing a company is consider to be ethical it can contribute to a company’s success. For example, Tim Tebow is considered an ethical person, and because of his good reputation he has the number one selling NFL jersey so far this season although he is not a starter.
3. Ethical Integrity resides in corporations and small business. Ethical Integrity is characteristic that can be possessed by a million-dollar salary business executive or a .25 an hour store clerk. People can make good ethical decisions with millions of dollars or with deciding not to steal a candy bar.
4. Ethical Integrity is the gateway to people trusting the financial system. Without the trust that companies’ are ethical, people will not use their money to invest or buy products from a company.
5. People displaying Ethical Integrity prove to be good endorsers for corporations. Corporations often use people who display ethical integrity to represent their companies. For example, before Tiger Woods recent exposure of mistresses he was the ideal person to represent the integrity of a company.
6. Humans are tested everyday with Ethical Integrity dilemmas. A simple example of this is the choice to steal company resources from the job. Another example is to report an employee not abiding by a company’s bylaws.
7. Some things are considered ethical in other cultures, but it is important to have Ethical Integrity according to the standards you are to be audited by. In an article by Bruce Weinstein published in Business Week, he proves that people may not agree with you, but it is important to maintain your ethical integrity when he writes “It is great to be passionate about your point of view. It’s also great to recognize that others may not share it or even be passionately opposed to it. Yes, let others know what you think and feel, but remember Newton’s third law of motion: “For every action, there is an equal, but opposite, reaction.””
8. The lack of Ethical Integrity can obliterate a person’s reputation. If a person lacks integrity, their unethical decisions can affect their ability to get a job. For example, if a person has been incarcerated it may be more difficult for them to obtain a job after being released from prison.
9. The commitment to Ethical Integrity can ensure a connection between a company and consumers. Most people form allegiances to companies because they have treated them fairly and displayed ethical integrity over many years. An example of this is people going to the same bank and demanding to only deal with a select group of people, because they have had a connection with that group of people for a long time.
10. People need Ethical Integrity to feel comfortable about investing. Most people won’t invest if a company participates in shady business practices, such as bribes or scams. If a company doesn’t have a history of these things most people will feel comfortable about investing.
The Video Lounge
This is a short cartoon about ethical decisions at work and how decisions lacking ethical integrity can affect a person’s life.
http://www.youtube.com/watch?v=BGviXZqpQjU
In the video below Barack Obama is expressing his ideas about things he feels needs to change because they are unethical while campaigning for presidency.
The concept of Ethical Integrity is very relevant today. The problem is that some people display their lack of Ethical Integrity and destroy people’s ability to trust that their money is safe with financial institutions. For example, those people who invested in Enron may never invest again, and if all Americans were to lose faith in the financial companies there would be no financial markets. The most important factor in our stock markets, banking systems, and overall purchases is the trust that our money will be available to buy things we desire. This will be impossible if a company’s upper-level managers lack Ethical Integrity and squander other people’s money for whatever they desire. The most important concept to remember about ethical integrity is that the companies with ethical integrity will make the consumer feel the most comfortable about trusting financial institutions.
References
De George, Richard T. (2005, February 19). A history of business ethics.
Retrieved from http://www.scu.edu/ethics/practicing/focusareas/business/conference/presentations/business-ethics-history.html
Weinstein, Bruce. “The Ethics of Protesting.” Business Week 20 Aug 2008: n. pag. Web. 05 Sept 2010.
Contact Info: To contact the author of “Top Ten Management on Ethical Integrity,” please email Donald D. Robertson Jr. at Donald.Robertson@selu.edu.
Biography
David C. Wyld (dwyld.kwu@gmail.com) is the Robert Maurin Professor of Management at Southeastern Louisiana University in Hammond, Louisiana. He is a management consultant, researcher/writer, and executive educator. His blog, Wyld About Business, can be viewed at http://wyld-business.blogspot.com/. He also serves as the Director of the Reverse Auction Research Center (http://reverseauctionresearch.blogspot.com/), a hub of research and news in the expanding world of competitive bidding. Dr. Wyld also maintains compilations of works he has helped his students to turn into editorially-reviewed publications at the following sites:
Organizations have moral, ethical, and humanitarian responsibilities in addition to their focus on earning a fair return for their shareholders. Corporate social responsibility (CSR) focuses on economic, public and social responsibility aiming at demonstrating a responsible behavior and responsiveness to social, economic, environmental and ethical issues. As society becomes more and more demanding, organizations take the action to protect and improve the welfare of society and to respond to the increasingly intense societal demands.
Building a reputation as socially responsible has a positive impact on organizational performance. CSR is related to doing successful and effective business and delivering high-quality products and services that can sustain a high-quality environment and high-quality relations to social networks. In this context, doing business is a human process.
Today, there are organizations that adopt social responsibility policies because of numerous motives. One of them is conducting ethical business, because, unlike what many people think, business ethics still exist. Besides, there are also business motives that are really strong. For instance, being highly respected as an equal opportunity employer is a strong business motive that assists an organization to reap a competitive advantage. A firm’s stakeholders perceive the organization as demonstrating responsible policies and implementing responsible strategies to solve social issues. Modern organizations believe that using business strategy as a tool for social and environmental change is an efficient way to integrate social goals into organizational objectives. Besides, some stakeholders do not just prefer that an organization is socially responsible, but insist on dealing with responsible companies.
The benefits for socially responsible organizations are various. First of all, a good reputation makes it easier for an organization to recruit and retain human capital. Employees are longer employed to the organization, reducing the costs of recruitment and retraining. This leads to better organizational performance as employees become specialized in their tasks and experienced, but they are also more motivated to offer to the organization and ultimately, more productive.
An organization’s actions are noted the most by organizational members. Executives who run the organization know its strengths and weaknesses and are able to exploit opportunities and anticipate threats that derive from the external environment. Organizational members interact on a daily basis with the stakeholders of the organization and the way the feel about the organization has a major and direct impact on how they perform their tasks and do their job at the end of the day. Therefore, being socially responsible does not benefit an organization only in the context of being esteemed by society, but first and foremost being appreciated by organizational members.
Firms that sell environmentally friendly products experience a high sales growth and typically, these products sell at a premium price. In the context of corporate social responsibility, many organizations develop new products and services, making a wider impact of their business on society. CSR makes organizations more competitive, while reducing the risk of damaging corporate reputation and profitability. Consequently, investors recognize organizations that are responsive to societal demands and are willing to finance their business.
Attracting new customers is costly for any organization because of expensive advertising campaigns or long lead times. As consumers become more sophisticated and demanding, organizations need to find more direct ways to acquire new customers, while reducing their investment in expanding their customer base. As there are customers who choose an organization based on their perceptions about it, corporate social responsibility can open the door for widening the customer base and adding to the perceived value added of customers.
The importance of corporate social responsibility in relation to how customers perceive it is growing. Goodpurpose global study of 2008 reports that 52 percent of global consumers are more likely to advertise a brand that supports a good cause over one that doesn’t, while 54 percent of global consumers would invest their money to an organization that promotes corporate social responsibility by supporting a good cause. Besides, 68 percent of global consumers would remain loyal to a brand during a recession if the organization exposed social responsibility, while 42 percent would select a brand with social commitment between two identical products in terms of quality and price.
Although the benefits of socially responsible behavior are many, there are also costs associated in the short-run. For instance, organizations that employ disabled people need to make organizational and technical adjustments, which increase operational costs. However, in the long-run, these costs are traded off by the benefits derived from building a strong image as a socially responsible organization and gaining a competitive advantage in the market.
Conclusively, corporate social responsibility offers an organization the opportunity to care for the environment and society. Bringing on positive social change through effective business strategies brings organizations and consumers together towards a mutual benefit through participation and involvement. When organizations are responsive to societal demands, they contribute to community and society beyond their functional benefits and they create strong emotional bonds with consumers. In return, consumers become more loyal and ultimately, profitability and business result increase.
1. Define what your company stands for and what values ??it places on the market. Public awareness of these values? Do they have a positive reaction to them?
2. Check the internal and external relations of the company. Do not they make sense and reflect the values ??of society? Public and the media frequently proclaim the guilt of the association. To search for new relationships with companies that meet ethical standards.
3. Understanding what the public expect from a company today. Are you ready to meet those expectations?
4. Check the location of assets, liabilities, and promises of brands, products, public sector and community initiatives.
5.
Compare your public profile, in which private actions. Are in conflict?
6. Do not be shy about spreading the word through the media, employees and community.
Cause Related Marketing: Another way can pay under
There seems to be a surefire way to make the payment under Cause Related Marketing (CM). All things being equal, a large niche of consumers around the world (well, almost anywhere in the world) would rather do business with a company that stands for something beyond profits.
Because marketing is marketing that connects a company’s product for a particular cause or set of values ??in the hope that consumers who hold these values ??will be more inclined to buy the product as a means to support this cause. The point is to attract consumers who want to make a difference in society through their purchases.
It’s not about philanthropy in the traditional sense.
Businesses have long contributed to a host of nonprofit organizations, but those gifts often go unnoticed by anyone but the recipients. True CM involves a high-level partnership between a company and cause. Donations for the sale of tape, or in some cases, those corporate profits.
Businesses worldwide not only want to write checks to charities. They want to be involved and the reasons are not always altruistic. Companies use to give to charity because they were hunted and philanthropy was looking for a tax deduction. Now when they give, they want something in return. When properly executed, CM sells products, enhances the image and motivates employees.
Moral behavior, quality character, honesty, moral integrity – how will one in business read these human attributes? I tend to view them as a given with the people I interact in both the business world and in my personal life as well. I expect the best from individuals nonetheless keep my eyes open for behavior that contradicts my expectations.
I’m a business broker based mostly in Florida. Within the profession of helping those buy and sell businesses. In my profession, as with most all professions you’ve got what some think about good business brokers, bad business brokers, and OK business brokers. Most all industries have the nice, the bad, and the average. Is it moral practices which help outline the good, dangerous or OK?
I recently experienced a business activity that made me take special note of a business clients actions. Primarily, we have a tendency to had a verbal understanding and agreement relating to a business relationship we have a tendency to would enter into contractually. While driving to meet with client to sign the documents that printed our agreement my shopper was approached by others.
The client and I had no written agreement between us. The client may doubtless go in another direction which might cost me a honest quantity of money. I had left at 5:00 am to drive half-dozen hours to fulfill shopper and concerning 1/a pair of hour before I ought to our meeting he called me to inform me of this other situation. When listening to what he had on his mind, I used to be somewhat pleased when he then asked me how long before I may get there and we could sign our papers and I could represent him with this prospective buyer of his business. He told me he felt he required the assistance of my representation, yet he might of handled matters therefore a lot of differently. Before this exchange I viewed this potential client as a sensible, honest, clear-cut individual. His actions bolstered to me the value of addressing a person of good character.
I have shared this story with several of my friends that are business owners and their response was fairly common. They too conjointly greatly value addressing a person of fine character. But that reality that those around me hold business relationships with those of good character in such high regard, makes me realize sensible character from others may be a valuable nonetheless somewhat restricted commodity.
A few weeks back my teenage son and I were talking of the Tiger Woods scenario regarding his several documented affairs. We each are active golfers and had admired Tiger Woods golf skills during the last ten+ years.
Golf is an fascinating game and it’s been said that one can learn additional regarding a person in one round of golf than you’ll in multiple workplace based mostly meetings. I asked my son that if Tiger Woods had “cheated” on his wife and family, do you’re thinking that he could have cheated on golf. My son said, “No,” I said, “Why?” He said that he thinks Tiger Woods views golf therefore importantly that he wouldn’t cheat on golf. Therefore I asked him the apparent, “Therefore you think that he views cheating on golf to be worst than cheating on your wife and family and that’s where he attracts the line?” My teenage son said, “Yes.”
I’ve got been related to many totally different organizations, associations, and trade groups. I still get a little stunned that many of those such groups feel compelled to teach ethics. I am within the profession of being a business broker and I work with individuals and businesses in the process of buying and selling businesses. I contemplate the actual fact that I can treat my shoppers and customers in an honest, ethical, and ethical manner as a given, however when I witness others that “consistently take the high road” I take special notice. I’ve got been a member of the business community for several decades and recognize that almost all all people are on an exploration to extend monetary gain. Where does ethical behaviour match in that blend?
*Do you’re feeling business ethics will be taught and learned by all in the business world?
*Is business ethics a lot of totally different than normal ethics one utilizes within the everyday game of life?
*Will ethics be taught to a 20, thirty, forty, fifty, sixty year recent? Or is it ingrained in you before you enter the workforce?
*Is it ok to treat someone unethically and then pass it off as “Its simply business”? To this I say No and have continuously felt that. I’ve got never really understood “Its simply business.”
*I have never understood “I had to cheat you out of $ X, but it had been simply business”, ” I know I treated you wrong, but it had been simply business” – what does that really mean?
*Will proper moral behavior extremely need actual thought or is it additional of an involuntary response that simply occurs like breathing and blinking?
*Is managing an individual and expecting honest ethical behavior a given and glossed over to allow “additional vital business problems to be mentioned”, or is it the vital issue that every one else revolves around?
Before you take a decision or implement change or introduce a new system I am sure you consider the five :
(will it work at all?)
(will it work with minimum resources?)
(does it contribute to the enterprise?)
or (is it sound morally?)
(is it beautiful?)
Let’s talk a bit about the fourth “E” –
There is a story, probably apocryphal, which illustrates this.
There was a cyclonic storm and millions of fish were washed ashore and were struggling for life on the beach. A man came to the beach and patiently began to pick up the fish, one by one, and throw them back into the sea. An amused passerby asked him what difference it would make, to which the man pointed to the fish in his hand and said,
they say.
Thus many upwardly mobile managers of today tend to rationalize when faced with an ethical dilemma and take the position that they must wear multiple ethical hats and cloak themselves with three separate one code applicable to the professional or technical aspects of their work , another for their business behaviour and a third code of ethics for their personal lives ).
This leads to the development of schizophrenic ethical personality wherein the individual may strive for professional excellence and high ethical standards for one’s own self and within one’s organization, but resort to unethical practices to succeed in business at all costs.
with a moral claim on the decision maker.
This stakeholder concept provides a systematic way of perceiving and resolving the various interests involved in our ethical decision making.
There is an ethical dimension to every decision.
Thus any of your decisions, which affect other persons, have ethical implications, and virtually all of your important decisions reflect your sensitivity and commitment to ethics.
In summary, as you perform your job in your workplace, what are the ethical dimensions as you deal with your superiors, peers, subordinates, customers and all other stakeholders connected with your work.
For example, take the case of .
Whereas, some organizations [and stakeholders] may feel that there is nothing ethically wrong with workplace romance and many even encourage organizational romance / marriage among colleagues by giving various perks / incentives, some others may discourage or even prohibit workplace-romance. Of course, sexual harassment would be universally considered unethical.
One useful technique to resolve such ethical dilemmas is the model adapted from Systems Management.
A CATWOE analysis helps the manager identify all stakeholders involved in a decision and their respective ethical perspectives.
= , OR CLIENTS OF THE DECISION
= , OR AGENTS WHO CARRY OUT THE DECISION
= , THE DECISION MAKER
=, WORLD VIEW PREDOMINATLY HELD
= / OWNERSHIP
= / ENVIRONMENTAL IMPOSITIONS
To elaborate a bit:
: The ‘customers of the system’. In this context, ‘customers’ means those who are on the receiving end of whatever it is that the system does. Is it clear from your definition of “C” as to who will gain or lose from your decision?
: The ‘actors’, meaning those who would actually carry out the activities envisaged in the notional system being defined.
: The ‘transformation process’. What does the system do to the inputs to convert them into the outputs?
: Weltanschauung – The ‘world view’ that lies behind the root definition. Putting the system into its wider context can highlight the consequences of the overall system. For example the system may be in place to assist in making the world environmentally safer, and the consequences of system failure could be significant pollution.
: The ‘owner(s)’ – i.e. those who have sufficient formal power over the system to stop it existing if they so wished (though they won’t usually want to do this).
: The ‘environmental constraints’. These include things such as ethical limits, regulations, financial constraints, resource limitations, limits set by terms of reference, and so on.
All decisions must take into account and reflect a concern for the interest and well being of all stakeholders.
Ethical values and principles always take precedence over non-ethical and unethical values and principles
It is ethically proper to violate an ethical principle only when it is clearly necessary to advance another true ethical principle which, according to the decision maker’s conscience, will produce the greatest balance of good in the long run
1 . Identify and classify the stakeholders in the situation using CATWOE and understand their ethical perspectives
2 . Identify their dominant ethical perspectives
Construct an ethical conflict web, mapping different ethical perspectives [CATWOE – six nodes]
4 . Identify those strands of the web where no significant conflict may be assumed to exist. These may be removed from the ethical decision making model.
5 . Concentrate on those strands where conflict does exist. Use conflict resolution techniques to achieve the “overall good” for the system
Ethical decision-making involves the process by which a person evaluates and chooses among alternatives in a manner consistent with his or her core ethical values or principles.
Thus when you make an ethical decision you:
(a) Perceive and eliminate unethical options
(b) Select the best from several competing ethical alternatives.
Ethical decision-making requires more than a belief in the importance of ethics. It also requires sensitivity to perceive the ethical implications of your decisions; the ability to evaluate complex, ambiguous and incomplete facts and the skill to implement ethical decision making without jeopardizing your career.
The model will help you in Decision Management – in improving the Ethical aspect of your managerial, professional and personal decisions.
One of the serious problems that businesses face these days is business ethics problems. When put simply, these problems are conflicts between the interest of a business and that of the employees/customer or the society in general.
No matter how hard the management of a business tries to set and maintain high standards of professional ethics, these conflicts do surface at some point of time or the other. One does not have to dig deep to find the reasons for these conflicts either, as they are inherent in the very nature of business.
Any person joining a job wishes to be paid as highly as possible. In contrast, cost minimization is always high on the priority list of the employer(s). An employee wishes to have the minimum work hours whereas the management is always striving to reach the peak of productivity.
When it comes to the customers, they want to have the best possible products on the least possible prices. At the same time, the manufacturer tries to produce an item at the lowest possible cost and put as high a price as possible.
The society expects the corporate world to bear their social responsibilities – being environment conscious, making investments in sports and education, maintaining clean surroundings, etc. For a business entity all these will mean additional expenditure.
The million dollar question, in the face of all these demands, is how do you overcome this situation, if at all these can be overcome?
The answer lies in ‘balance’. No one can argue with the fact that businesses are established to maximize returns for its owner(s) and, in some cases, shareholders. Still, the business establishments can achieve this goal while behaving ethically – helping its employees, giving to the customers’ products worth their money and serving the community in general.
By following ethical norms and investing in social sectors, the business will earn the respect and confidence of the customer. This way the business may not make fast bucks or what is termed ‘go for kill’ but the results will start to show with time. In long term, it will be a boon for the brand and will enable the business to get to high profitability rates.
Similarly, if a business takes care of its employees, it will have happier and more productive workers. This, in turn, will make very positive effect on the productivity of the company.
If a business takes care to reduce waste, encourage recycling and preserving energy, it will not only aid the environment but will also help itself. Using these means, a considerable amount can be saved which can then be put to better use.
There is no denying that even a responsible business outfit will face business ethics problems. However, they can be countered using business ethics acumen and insight.
The meaning of the word “ethics” is often hard to define. However, a simple Google search reveals the term as “a system of moral principles”.
In organizations we often witness ethical dilemmas. Some examples include sexual harassment at the office, bribery and discrimination. In North America, such actions are generally seen as unethical behavior. The majority of us do not accept bribery, discrimination and sexual harassment as “moral principles”. However, it can sometimes be difficult to draw the line between what is ethically acceptable and what is not.
Picture the following scenario:
Your boss gives you an expensive sports car as a new gift for all the hard work you’ve been putting in. Is this ethically acceptable? – Some may argue yes. Some may argue no. For these reasons, it is important that an organization makes clear, and outlines what is ethically acceptable within an institute.
At the Shell Corporation, a Code of Ethics has been adopted by all its companies worldwide. This code, along with a Statement of General Business Principles put together by shell, outlines how members of its company should conduct its business affairs. Specifically written to meet the requirements of section 406 of the Sarbanes Oxley Act, the code outlines the key requirements of all employees, how to report breaches of the code, as well as outlining accountability.
Key Requirements:
The key requirements stated by Shell in its Code of Ethics relate back to our original definition of “a system of moral principles”. In these requirements we find a list including points which are moral principles to the Shell Corporation. This list states that all employees must “act in accordance with the highest standards of honesty, integrity and fairness and expect the same in their relationships with others while maintaining a work and business climate fostering such standards.” It also states all employees must “not seek or accept from third parties to his own advantage any favour in whatsoever form or howsoever described in connection with the business of any Shell company or his duties (except for the acceptance of such things as gifts of nominal value and working lunches, dinners and entertainment of reasonable value, frequency and duration, appropriate under the circumstances….).” Here we can see like the example provided in the introduction, expensive gifts like a new sports car would be unethical at Shell. As stated in their Code of Ethics, one should only accept such things as gifts of nominal value. An expensive new sports car is not of nominal value and therefore would not be an ethical practice at Shell.
Reporting a Breach in the Code of Ethics:
At Shell, reporting a breach in the Code of Ethics should be in the form of writing to one of the following:
The chairman of the Audit Committee in the case of: the Executive Directors of Royal Dutch Shell, the Chief Financial Officer, the Chief Internal Auditor and the Executive Vice President-Controller
The Executive Vice President Controller in the case of any other employee.
Accountability:
Every employee is held accountable for the full compliance of the Code of Ethics!
References:
The Sarbanes Oxley Act, Section 406. Retrieved March 1st 2010 from
http://www.openpages.com/solutions/sarbanes-oxley/sarbanes-oxley-sec406.asp
Shell Statement of General Business Principles. Retrieved March 1st 2010 from http://www-
static.shell.com/static/aboutshell/downloads/who_we_are/sgbps/sgbp_english.pdf
Ethics. (n.d.) In Online Dictionary. Retrieved March 1st 2010 from www.dictionary.com
The Shell Global Homepage. Retrieved March 1st from http://www.shell.com
Almost every day, we are faced by situations in which we have to make a decision and choose between something ethical and another that is less than ethical, with the latter, almost always, appearing as the more rewarding. Being hung up on profit and the urge to succeed, most people sadly choose the latter in order to realize their immediate goals.
There are some companies that we compete against on a daily basis. They are professional with excellent levels of service, ethics and even seem to have integrity. Unfortunately there are some that are not. I am sure this is the same throughout most industries. Regardless, it can get crazy if it gets out of hand.
Companies with good ethics always succeed in providing customers with the services they need and the healthy support and satisfaction they require, being loyal to a company and its services. It is quite common that people only stick to a particular company because of their business ethics and how they deal with their customers. Here are four steps to a more ethical company:
- First, use your organization’s “positive deviants” to establish a clear, specific standard of ethical values, attitudes and behaviors.- Second, guide all personnel to firmly embrace the goal of ethically achieving the positive deviant’s social good.- Ensure that the commitment to ethics is sustainable, even in the face of contrary pressures. True ethical behavior is profound and long term. – Finally, engage a critical mass of the organization quickly to ensure that ethics pervades all aspects of the organization and becomes a true reflection of the organization as a whole.
In summary, there are many factors in creating a successful business: turning a profit each quarter, attracting new customers and other similar situations. However, none of this is possible if the customers are all treated without respect and courtesy. And the same goes for employees. If certain codes are not followed, then that opens up the workplace to uncomfortable, unrewarding experiences so business ethics does have a role in society.
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