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Introduction of Business Ethics
Business organizations are social entities where human beings interact, communicate, and form social units that are essential for the development of organisation. However, conflict is becoming inevitable in corporate organizations where income differences, workplace ranks, and hierarchical order are inherent (Arnold, Audi, & Zwolinski, 2010).
As the business world evolves towards a more pragmatic arrangement of performing corporate duties, ethical issues in business are becoming more common and of major concern to the survival of businesses. The recent spate of corporate scandals associated with unethical business practices has prompted serious reactions from labour organizations and workforces in several nations.
Such reactions have forced corporate organizations to devise means of combating workplace discrimination, racial prejudice, and gender bias with a view of establishing transformative leadership based on ethical principles (Butts, 2008).
Business ethics generally refer to a field of business management that focuses on the practice of undertaking corporate activities through observing moral principles that guide the actions of those involved in the business environment.
Business ethics covers a continuum of issues surrounding corporate practices, public relations, human resource management, and general organizational management behaviours, which are often elements that the public uses to describe an operating organization (Duska, 2007).
Corporate ethics describes the moral responsibilities and obligations of an operating business organization towards its employees, stakeholders, shareholders, suppliers, consumers and the surrounding community. Business ethics covers issues concerning business compliance with the existing rules, laws, and regulations associated with its business environment.
Ethics of business encompass obligations related to the protection of proprietary and other confidential information of consumers, employees, or business vendors. According to Dobson (2007), business ethics also entails proper use and protection of company’s assets, interests, and reputation by stakeholders, managers, and the corporate workforce.
As Elms, Brammer, Harris and Philips (2010) state that business ethics include workplace equity, human integrity, environmental protection, conflict management, and respecting human rights and any entitled freedom bestowed to employees and individuals involved with an organization.
The concept of business ethics defines the manner in which corporate organizations should behave towards the people directly involved with the organization and the environment in which the business operates. Friedman and Miles (2002) claim that business ethics involves values such as responsibility, trustworthiness, respect, and other moral behaviours.
The principles of business ethics assume that a company that promotes ethical governance is often capable of creating a workplace environment that fosters transparency, fairness, and integrity in its business operations.
Any company practicing principles of business ethics normally has an established code of ethics, a whistleblowing process, and clearly defined mandates of managers and workers as indicators of ethical governance (Drucker, 2004).
What defines ethical corporate governance in a business environment is the presence of transparent guidelines on conflicts of interest to investors and well-established corporate social responsibility frameworks. Generally, business ethics entails moral values and established principles that are within corporate codes, which are useful in providing guidelines for ethical leadership and decision-making.
Literature Review of Ethical Theories and Ethical Business Practices
The quest to understand business ethics in corporate governance has led to the establishment of theories and perceptions regarding ethical leadership, ethical business communication, ethical business practices, and business integrity.
Among the most common theories of ethics that corporate governance has examined are the utilitarianism theory, the virtue theory, the theory of the common good, the justice theory, and the Kantian theory of ethics (Jones, Felps, & Bigley, 2007). The theory of utilitarianism is a normative ethics that hinges on the principle of utilitarianism, which focuses on establishing the association between actions of people and the consequences.
Utilitarianism theory postulates that an appropriate course of action is the one capable of utilizing the benefits and reducing harm to the few individuals as possible (Garriga & Mele, 2004). The theory claims that an action of individuals in an organization or a society is what would determine the outcome or later consequences. The theory postulates that actions guided by moral reasoning are often righteous.
The concept of utilitarianism in corporate governance provides managers and organizational workforce with normative guidance, which enables businesses to formulate ethical principles and perform their activities with ideal standards (Hart & Sharma, 2004). The norms of utilitarian theory are those that relate to the correctness in behaviour where consequences determine the worthiness of actions.
Corporate organizations and managers have used the utilitarian approach to make strategic decisions that are essential for the development of companies. The concept of corporate social responsibility is what would define the significance of understanding utilitarianism in the management of people and activities in modern organizations.
When making crucial decisions in an organization, utilitarian theory assumes that the appropriate decisions should focus on ensuring that the positive outcomes of actions outweigh the negative consequences (Drucker, 2004).
Companies practicing effective social responsibility through morally upright standards experience low risks associated with business operations and human resource challenges. Hence, utilitarianism promotes individual gains and corporate growth in any operating organization.
Another perennial theory that has proved significant in elaborating the concept of business ethics and ethical business practices is the Kantian theory of ethics. The Kantian theory assumes that individuals have the moral obligation to act righteously despite the nature of the foreseen or unforeseen outcomes in any intended action.
According to Stroud (2002), the concept of Kantianism urges managers and corporate owners to practice ruling with democracy and foster business values that pervade throughout the organizational structure. Kant encourages members of organizations to understand the need of making moral actions that probably lead to more good than any unprecedented harm (Stroud, 2002).
The Kantian ideologies focus on addressing organizational irresponsibility and consider legal manipulation, irrational decisions, false allegations, and culpable ignorance as forms of unethical business practices.
Kant postulates that humans are agents capable of making great choices under any practical laws to justify an action. Hence, although practical laws govern modern organizations, they may not influence people willing to act righteously.
The realm of business ethics recognizes the contributions of the theory of common good that seeks to encourage people to work towards ensuring that the benefits of independent actions become integral to the entire society (Jensen, 2002). The common good approach emphasizes that human actions should focus on stabilizing and sustaining communities instead of merely making individual progress.
In the context of organizations, human beings within an organization need to act solely for the common good of the company and not individuals. The common good approach assumes that every action or decision should contribute and promote the common good, where everyone in an organization would enjoy the outcome (Stroud, 2002).
Individuals, who adhere to the attributes of common good normally collaborate with their organizations, operate in teamwork and foster corporate cohesion for sustainable growth of both the organization and the employees (Furlong, 2008). Individuals, who understand the virtues of common good comfortably allow wholesome growth of companies, and delineate personal interest with corporate aims and ambitions.
Business ethics recognizes the presence of virtue theory that stands out as one of the integral normative ethical theories that explain the manner in which organizations can thrive in their business practices through acting virtuously. The virtue theory of ethics emphasizes on the appropriate integration of rules and regulations that act as guiding principles in the actions of individuals in an organization or society (Jamali, 2008).
The virtue ethics assumes that proper rules can guide humans, who are termed as agents in an organization and leverage negative consequences of any intended action. The role of individuals in any action is among the emphasis of virtue theory, where the irresponsibility of persons in lawbreaking would result into individual accountability in case of any negative consequences resulting from personal actions (Jamali, 2008).
The virtue theory is the mainframe that enables people to behave as corporate agents with upright moral values. Moral virtues enable individuals to act reasonably or logically, possess admirable traits, and have the right intentions.
Rawls theory of justice in the business settings is among the suppositions that enable organizations to develop structures, maintain corporate culture, and have sustainable bureaucratic arrangements.
The justice theory of Rawls is the pillar behind the development of rules, regulations, policies, and defined mandates in organizations, which are components that describe ethical corporate practices of an operating organization (Weiss, 2009).
In organizations, Rawls contends that although social and economic inequalities are inescapable life matters, equality of opportunities and fairness should prevail in offices and employment opportunities (Weiss, 2009). The justice theory emphasizes on the ideology of equal liberty as the most reasonable approach to ensure fairness.
These liberties may involve freedom to possess private property, voting rights, freedom of thoughts and speech, and freedom from extortion and arbitrary arrests. Any actions contrary to individuals wish is an unethical business practice.
Critical Analysis of Propmore Unethical Business Case
The concept of business ethics stretches towards understanding ethical and unethical behaviours in corporate governance, and the dilemmas that arise from making reasonable decisions on corporate issues (Barnett, 2007). The Propmore unethical business case where Jane seeks justice on the alleged sexual harassment plight presents a major ethical dilemma in decision-making for corporate leaders.
The first critical dilemma for business ethics in Propmore is that Jane reports a sexual harassment case involving a salesperson of a different employer and seeks company intervention. Although legitimate on grounds of personal attitude towards the harassment act, the Propmore guidelines on sexual harassment cause dilemma.
The Equal Employment Opportunity Commission (EEOC), which governs Propmore, defines sexual harassment as verbal or physical sexual advances on individuals and on conditions when the perpetrator asks for sexual favours made deliberately or accidentally during the employment period.
Jane was still a serving employee of Propmore, but the perpetrator was not a direct employee of Propmore. Bill may walk toll-free if judgment considers the first EEOC conditions.
The second condition of the EEOC sexual harassment is that the submissions to the alleged misconduct or rejection of the same by an employee are paramount for the employment decisions affecting the victimized staff. Bill being an employee of just a joint apprenticeship may not be subjective to the conditions or policies of Propmore regardless of the accounts of the alleged offense.
In business ethics, explicit definition of wrong actions does not prevail in any of the ethical theories given the quandary that characterizes most of the dilemmatic corporate cases. Indirectly subversive of the accusations against him, Bill has justifiable reasons to refute complaints against his gross misconduct against Jane.
Business ethics regards a reasonably unethical behaviour when persons in an organization act with culpable ignorance on known regulations. Bill was not punishable under Propmore regulations since he may have been unsure of the corporate policies that govern Propmore since they concern actions of the Propmore employees alone.
In any assumed natural law sense, defining wrong actions typically reflects only cases that entail the violation of portions of the established laws (Butts, 2008). Bill may have seriously caused alteration in the work performance of Jane since the third condition of the EEOC policy against sexual harassment considers a sexual nuisance as hostile, intimidating, and offensive.
No matter how credible the investigations of Don would seem, holding Bill responsible of such accusations of gross misconduct would remain challenging. The third condition of the EEOC sexual harassment policy is adequate to reprimand and hold Bill accountable for the alleged misconduct. Nonetheless, the EEOC considers such cases offensive when they occur within the company premises.
Contrary to this stipulation, the accusations arose after a luncheon meeting where none other than the two individuals would recount what exactly transpired. For Don to conclude any judgment against Bill, he would make reasonable decisions only if the investigations would reveal evidence from an eyewitness, who would testify against Bill.
Propmore Corporation had justifiable reasons to assist Jane in launching her case only through reporting the behaviour of Bill to the management of Airgoods Corporation.
Since Propmore Corporation embraces Title VII principles enshrined in the Civil Rights Act of 1994 regarding sexual harassment at the workplace, which require joint apprenticeship to remain responsible for the actions of its agents, reporting the case to Propmore for judgments against Bill was thoughtful.
Although Airgoods Corporation may have been unaware of such conditions regarding sexual harassment, Title VII principles recommend actions against offenders regardless of their unfamiliarity with the policy.
Don may have acted unreasonably on carrying out the investigation on the matter given the stipulations of the HR-3 Corporation policy of Propmore that requires complainants to present a written grievance against a violated workplace policy. The case fails to mention whether Jane presented a written grievance to Don regarding the matter and this just indicates Jane presented an unacceptable verbal complaint.
The allegation of Jane may be reminiscent of the idea that Bill was culpable of sexual harassments during the luncheon; however, providing justifiable reasons to implicate Bill as the perpetrator of such actions is quite challenging. This is due to three conditions that seem to cause ethical dilemmas regarding the plight of Jane.
The suspected luncheon sexual harassment occurred outside the company premises under no substantiation from any on-duty supervisor. The case of harassment entails a perpetrator, who does not directly relate to the organization, and hence, not culpable of any policies governing Propmore.
Against the requirements of the HR-13 Propmore corporation policy, Jane as a victim fails to file a written grievance and present it to Don as the immediate supervisor; hence, breaching conditions of implementing the sexual harassment policy of Propmore. Beyond reasonable doubt, the allegations of Jane may seem baseless and uninformed given the assumed natural law sense that requires justifiable reasons to implicate an offender.
Recommendations to the Business Case
Business ethics understands that neither personal interests nor corporate interests are to consider when dealing with a problem in a moral manner (Beckett & Jonker, 2002). No one between Don and Joe is capable to justify whether the sexual harassment actually occurred or was just pretence and of situational exaggeration by Jane.
Although the problem presents Don and Joe with a crucial ethical dilemma that requires moral decision-making, an out-of-law settlement could be the most appropriate solution (Beckett & Jonker, 2002). Don and Joe should consider the conditions stipulated by the Propmore sexual harassment policy that seem inapplicable to the current situation.
Neither Don nor Joe can overstep their mandate in dealing with a case that contains legal dilemmas with no policy able to hold any offender culpable. Against of any prejudice or malice in their judgments, the most possible solution for Don and Joe towards settling the dispute where the perpetrator and the victim presents mixed versions of the happenings is through discourse.
The reason for recommending dialogue resolutions, in this case, is due to the actual repercussions that any uninformed decision may cause to the involved persons and parties. These recommendations hinge upon the elements of virtue ethics that presupposes that tough situations call for tough and virtuous decisions that are neither extremely detrimental nor extremely flattering (Gago & Antolin, 2004).
The five key virtues of Kenneth Goodpaster associated with ethics in the business realm inform these recommendations where considerable care in decision-making in the Propmore case deem necessary (Dobson, 2007). The first key virtue is the one that concerns prudence in making decisions where a corporate case contains ethical dilemmas.
Prudence, according to Goodpaster, is the consideration of short-term and long-term decisions about unethical cases and the related repercussions (Goodstein & Wicks, 2007). Uninformed decisions would probably result to detrimental effects on involved individuals either on long-term or short-term basis. Moral decision-making in business cases will consider the impact of a decision to individuals and the corporation.
Considering the above assumptions of Goodpaster, calling for harmonious dialogue involving Jane as the victim and Bill as the alleged culprit will help resolve the ethical dilemma amicably. The second virtue that Goodpaster suggests is the virtue of temperance, which requires decision-makers to consider making profound judgments that seem neither too materialistic nor poorly dispassionate (Dobson, 2007).
Goodpaster claims that decision-making should remain idea-driven and not based on the business interests or passionate feelings towards any of the involved people or parties (Dobson, 2007). Bringing two conflicting parties to a harmonious agreement to resolve a case is the impeccable solution where laws or regulations seem to contradict upon a situation.
The third virtue of moral reasoning that Goodpaster thought would help in corporate decisions is the virtue of courage because it requires decision-makers to remain bold in making judgments (Dobson, 2007). Don and Joe would require critical reasoning and courageous approach towards the underlying problem given the possible ramifications of the case.
Both Don and Joe have the mandate to make considerable changes to the job positions of the two workers as part of a meaningful decision. Alternatively, repositioning Bill from dealing with Propmore and transferring him to other outlets within the capacity of Joe as the boss of Bill is important to avoid further misunderstandings.
According to Freeman, Wicks, and Parmar (2004), the fourth virtue of business ethics that Goodpaster thinks managers should embrace in making critical decisions in dilemmatic scenarios is the virtue of justice. The view of Goodpaster regarding justice is that judgment should not seem neither anarchic nor excessively complaint (Dobson, 2007).
Hence, it implies that the two managers should not remain confined to the principles of sexual harassment, but they should develop ways of enabling mutual agreements between Jane and Bill. The last virtue of Goodpaster is loyalty where the decisions of the two managers should be independent of any shareholder or stakeholder influence. Don and Joe need to put aside their personal relationships between their workers.
Conclusively, Jane may have the right to report the case of sexual abuse to her supervisor. However, the regulations can barely make sense in any reasonable natural law sense as the scenario presents a complicated situation where corporate policies of Propmore hardly make sense.
The concern about judging the wrong actions in the assumed natural law sense comes into play in this scenario where Don has to gather reliable data to make decisions upon the case. The alleged perpetrator and the victim present contradicting views regarding the case and this hinders Don from understanding the whole story.
Additionally, corporate policies governing cases of sexual harassment are explicitly in the policies of Propmore and not recognized in Airgoods Corporation. Bill is only guilty under the Civil Rights Act of 1964, but Jane fails to present a written grievance as an HR-13 corporate condition of Propmore requires, justifying an execution of the investigation of any alleged sexual violation against an employee.
References
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