Category: Business Ethics

Business Ethics Report on Theory of Utilitarianism: Ideas of Jeremy Bentham

Executive Summary

This is qualitative research that possesses the capacity to introduce the standard of Utilitarianism as a standout amongst the most effective and enticing ways to deal with regulating morals. John Stuart Mill is an early established supporter of Bentham, who concocted this philosophical hypothesis. John Stuart Mills by one means or another did share some unique perspectives with respect to some part of this hypothesis in light of the feeling of bliss. In later circumstances, Philosopher Karl Marx censured Bentham’s utilization of ‘yard measure’ of now to the past, present, and future. What’s more, as a moral glutton, Jeremy Bentham, trusted that good and bad could be controlled by measuring the ‘pain’ and ‘pleasure’ of any given activity, with an activity that delivered more pleasure than the pain being ethically right. At last, the utilitarian rule conveys various confinements. It organizes results neglecting the method for the activity and overlooking the way that there is some instability of results. The cost-benefit analysis overlooks the bargains that research makes to provide certain incentives to businesses.

Introduction

Utilitarianism is one of the most powerful and convincing approaches in the history of philosophy to normative ethics. Although distinct types of opinions are discussed, in particular, utilitarianism is said to be the opinion that the action that generates the best is the morally correct action. If the end outcome is positive and useful, then it is justified to take action to achieve the end. It says that the end consequences define the action so it is a form of consequentialism. This implies that the right action is understood entirely in terms of the consequences produced. Utilitarianism differs from egoism in terms of the relevant consequences. On the utilitarian view, one tends to maximize the overall good and not only one’s own good but consider the good of others as well. Utilitarianism has no bias, which means the happiness of all counts the same.

The early leader of Utilitarianism is Jeremy Bentham and in 1780 he printed his book ‘An Introduction to the Principles of Morals and Legislation. Bentham presented a method of calculating they value of pleasures and pains, which has come to be known as the hedonic calculus. Bentham says that the value of a pleasure or pain, considered by itself, can be measured according to its intensity, duration, certainty/uncertainty, propinquity/remoteness, fecundity, purity, and extent. Bentham emphasizes that his method is not unwarranted because he believes that an action is deemed good if it produces more pleasure than pain. In order to assess the advantages of the action, the value of pleasure and suffering in one’s life must be measured.

Views similar or contrary to Bentham’s classical theory:

John Stuart Mill was a follower of Bentham and admired Bentham’s work even though he had disagreed with some of Bentham’s claims primarily on the nature of happiness. Bentham claimed that there were no qualitative differences between pleasures they were only quantitative. This aspect of his theory exposed him to different criticisms. Firstly, many claimed that Bentham’s Hedonism was egoistic. Simple-minded pleasures, sensual pleasures, were just as good, at least intrinsically, then more sophisticated and complex pleasures. Secondly, there was no qualitative difference between human pleasures and animal pleasures in Bentham’s view. And the third element of his theory that was criticized was his view that harming an animal and a human being is both bad, while most individuals believed that harming the human being was worse. Mills made some changes to the theory so that it could cancel out the criticism.

Mills believed that some pleasures more important than others. According to Mills, Intellectual pleasures are more important than just sensual and body-only pleasures. While Mill’s view of the good differs greatly from the view of Bentham, but like Bentham, the good is still in pleasure. If you have pleasure, the action is preferable and good. In addition, the theory’s basic structures are the same. Mill’s proof of the claim that intellectual pleasures are better than other pleasures, is highly suspected. He doesn’t attempt a mere appeal to raw intuition. Instead, he guesses that those persons who have experienced both views the higher as better than the lower. Or, we can explain by using his most famous example — it is better to be Socrates ‘dissatisfied’ than a fool ‘satisfied’. Mill was thus able to solve a utilitarian issue.

Criticisms

Karl Marx’s criticisms

According to Karl Marx, human nature is dynamic. The concept of a single utility for all humans is one-dimensional which is not useful. When he criticized Bentham‘s application of ‘yard measure ‘of now to the past, present, and future, he criticizes the implication that society and people have always been and always will be, as they are now, thus he criticizes essentialism’.

Karl Marx’s also said that the principle of utility was not the discovery of Bentham. He simply reproduced in his boring way. Karl Marx’s also said that the utility principle was not Bentham’s discovery. He reproduced merely in his boring manner. He levitant French men had said with spiriting the century of 18th. For the purpose of utilitarianism, Karl Marx had provided a clarification. Karl Marx’s related it to a dog. He said to recognize what is helpful for a dog. The answer is that; a person must study the nature of the dog. Karl Marx also said that from the principle of utility this nature itself is not to be expected. This matter applies to this person who, by the principle of utility, would soon disregard all human acts, movements, and connections. However, this issue as a whole has to cope with human nature and then with human nature as altered in every ancient period. Bentham does little of this theory’s job.

Marx’s indictment is in two ways. He claims utility theory is true by definition and therefore adds nothing expressive in fact. Marx also outlined the need for a productive evaluation to examine what kind of effects are good for individuals. Such as: what is our nature, isolated under capitalism. Second, he also tells that Bentham does not take into consideration people’s changing character and therefore the changing character of what is good for them. For Marx, this criticism is particularly crucial because he thought that all significant statements depended on specific historical circumstances.

John Taurek’s criticism

John Tarurek has argued that the idea of happiness or pleasure across persons is quite meaningless. Those individuals are morally meaningless in the situation. He questioned if our course of action should be taken into consideration in the trade-off situation. Taurek also said that “The conclusion I reach is that we should not”. His argument basically looks at a trade-off situation”. He explained, “The situation is that he has a supply of some life-saving drug”. He cannot give a satisfactory account of the meaning of judgments of the kind.

Discussion on the Utilitarian Theory and Literature

The theory of utilitarianism has several applications in the real world. The case ‘Airbag and the automobile manufacturers’ is an application of the utilitarianism theory in real life. As stated previously, the nineteenth-century thinkers Jeremy Bentham developed this theory (1784- 1832), James Mill (1773-1836), and John Stuart Mill (1806-1873). It states that the moral worth of an action is evaluated by the consequence that is the yield from that action. It is a hardline consequentialist view. At the same time, the theory emphasizes the overall society’s good, not the people or group of individuals benefit. In this case, the notice of ‘Inflatable Occupant Restraint Systems’ and emphasized the use of controversial ‘air bag’ was a measure taken by the National Highway Traffic Safety Administration to ensure the safety of the general mass. However, this measure was opposed by the automobile industry. If the automobile industry is considered to be a group of individuals, then according to the theory of utilitarianism this group has to be overlooked as utilitarianism emphasizes on the benefit of the majority not the minority. The new law affects automobile manufacturers in a number of respects. Using the airbag will increase their manufacturing costs and they will be forced to charge greater prices for the cars. If they charge greater prices for cars, customers will no longer purchase cars produced by US automobile manufacturers, but move to vehicles produced by overseas manufacturers, creating US automobile companies non-competitive on the market. Their problem is of great concern but still, they are in the minority so, utilitarianism theory overlooks their concern. As articulated by Mill and Bentham, Utilitarianism aims for the greatest good for the greatest number of people, not for the pleasure of the individuals.

Utilitarianism critics have charged that it is not a complete approach to ethical decision-making because it ignores intentions and motives, which are also essential in moral decision-making, by focusing on the consequences of actions. In this situation, the consequence of the technical execution is still unsure. Repeatedly questions were raised against the research made, the engineering design, etc. The intentions or motives for the action, however, are people’s safety, but they involve numerous expenses. It was a major problem when opponents of the ‘ airbag ‘ installation technology discovered that increased use of the seat belt could serve the safety objective of the airbag installation. More importantly, the use of seat belts has increased in recent years in the US through increasing public education. This can be a good solution to the issue that serves the purpose of both groups.

The application of utilitarianism in today’s business world is the cost-benefit analysis. This analysis is executed by every business before undertaking any major decision. Under this will be considered all the costs and benefits of an action being proposed. Then the task of comparison is carried out. If the value of the benefit exceeds the cost of the proposed action it is decided to be executed. If vice versa happens, however, the suggestion will be dismissed. This is a decision-making extreme quantitative approach. Now let’s see how an actual-life example of this assessment works in real life.

Custom Graphic Works has been operating for just over a year, and sales are exceeding targets. Currently, two designers are working full-time, and the owner is considering the increasing capacity to meet demand. (This would involve leasing more space and hiring two new designers.)

He decides to complete a Cost-Benefit Analysis to explore his choices.

Assumptions

Currently, the owner of the company has more work than he can cope with, and he is outsourcing to another design firm sate cost of $50 an hour. The company outsources an average of 100 hours of work each month.

He estimates that with increased capacity, revenue will increase by 50%.

With more workspace, manufacturing per person will boost by 10 percent.

The horizon of analysis is one year: that is, he expects benefits to accrue in the year.

• Cost
• Types
• Details
• Comes in the First Year
• Lease
• 1250 square feet available next door at $20 per square foot

1. $25,000

• Leasehold
• Improvements
• Wall decoration and reconfiguring office physical space

1. $20,000

• Hire four more designers and technicians
• Salary, including benefits
• Recruitment costs
• Orientation and training

1. $100.000

• Two additional service center
• Furniture, Hardware
• Buy needed software

1. $10,000
2. $1,000

• Construction downtime
• 2 Months at approximate revenue per month

1. $15000
2. $30000

• Total

1. $1,86,000

• Benefits
• Benefit
• Benefit Within 12 Months
• 50 percent revenue increase

1. $19,500

• Paying in-house designers $15 an hour, versus $50 an hour outsourcing (100 hours per month, on average: savings equals $3,500 a month)

1. $42,000

• 10 percent improved productivity per designer ($7,500 + $3,750 = $11,250 revenue per week with a 10 percent increase = $1,125/week)

1. $58,500

• Improved customer service and retention as a result of 100 percent in-house design

1. $10,000

• Total

1. $305,500

• He calculates the payback time as shown below:

1. $139,750 / $305,500 = 0.46 of a year, or approximately 5.5 months

However, this cost-benefit analysis is not without any limitations. It does not consider the qualitative aspect of a decision and it is an application of Bentham’s principle of utility.

As an ethical hedonist, the 18th-19th-century English utilitarian philosopher and proto-bleeding- heart-liberal Jeremy Bentham, believed that right and wrong could be determined by weighing the “pleasures” and “pains” of any given action, with an action that produced more pleasure than the pain being morally right.

While this would be great by itself (in a geeky kind of way), what makes it truly spectacular is the fact that Bentham actually created an algorithm to define exactly how much pleasure and pain an action would cause. (His application of algebra to life decisions is echoed by at least one complete whack-job modern author…)

To determine an individual’s pleasure or pain from an action, Bentham suggested weighing Intensity(pleasure‘s strength), Duration (how long pleasure would last), Certainty (the probability action will result in pleasure), Propinquity (how soon the pleasure might occur), Fecundity (the chance the pleasure would result in further actions), and Purity (the probability these further actions would be pleasures and not pains). He also added Extent, taking the impacts of that choice on other individuals into consideration.

We can only guess at the specific algebra Bentham used to compare these variables and he left no note of how to quantify, for example, the intensity of pleasure, but in Bentham’s day, he envisioned his hedonistic calculus used for many decisions, including calculating jail sentences: given a certain crime, Bentham thought it possible to determine the punishment that would outweigh the crime‘s pleasure and thus prevent future crimes.

Interestingly, Bentham’s thinking about prisons didn’t stop at sentencing length. He also designed the prison known as the Panoptic on, in which prisoners in open cells tall times feel as if they are being watched by guards in a central tower. To Bentham, the Panoptic on allowed guards to gain ‘power of mind’ over the prisoners.

Bentham in his theory ignored the significance of the pleasure of the mind while prioritizing the pleasure of the body. John Stuart Mill has corrected this flaw by establishing his theory of the principle of happiness. Mills argued that happiness is more important and it is different from pleasure. This is because pleasure in quantitative and happiness is qualitative; happiness requires cognitive judgment and sometimes pain of the body can yield happiness. So, pleasure is not necessary for happiness.

Therefore, there are a number of limitations to the utilitarian principle. It prioritizes consequences overlooking the means of action and overlooks the fact that results are somewhat uncertain. It prioritizes consequence overlooking the means of the action and ignoring the fact that there is some uncertainty of outcomes. The analysis of cost-benefit ignores the compromises that the study makes in providing the company with certain incentives. It ignores the right of the individual and does not take into account the benefit of the minority. Still, the concept of the free market economy is based on the utilitarian principle of utility and it is very successful. But for this the limitations it carries cannot be overlooked. That is why the philosopher Kant established the theory of rights and duties to let the world get rid of the dilemma.

Conclusion

From the discussion throughout the research, Utilitarianism is one of the most powerful and persuasive approaches to normative ethics in the history of philosophy. John Stuart Mill is an early classical follower of the philosopher Bentham, who discovered with this philosophical theory. John Stuart Mills did somehow share some different views regarding some aspects of this theory in the light of the sense of happiness. In later times, Philosopher Karl Marx criticized Bentham’s application of the “yard measure” of now to the past, present and future. And as an ethical hedonist, Jeremy Bentham believed that right and wrong could be determined by weighing the “pleasure” and “pains” of any given action, with an action that produced more pleasure than the pain being morally right. Finally, there are a number of constraints to the utilitarian principle. It prioritizes consequences that overlook the means of action and ignore the fact that results are somewhat uncertain. The cost-benefit analysis ignores the compromises made by research to provide the company with certain incentives.

Reference

1. Anthony Quinton, Utilitarian Ethics (LaSalle, IL: Open Court, 1988), especially pp. 47 – 49, Quinton Case Study in Business Ethics, 2nd ed., eds. Thomas Donaldson and A.R. Gini (Englewood Cliff, NJ: Prentice Hall, 1984), p. 181
2. G.E. Moore, Principia Ethica (Cambridge: Cambridge University Press, 1903
3. General Motors Study, About Air Bags, (Washington DC: Insurance Institute for Highway Safety, 1987)
4. Dave Zoia, “Some Wait to Decide on Passive Restraints”, Automotive News (September 15, 1986), p1
5. Driver, Julia, ‘The History of Utilitarianism’, The Stanford Encyclopedia of Philosophy (Winter 2014 Edition), Edward N. Zalta (ed.), Retrieved from.
6. ‘Utilitarianism’. Wikipedia. N.p., 2016. Web. 1 Dec. 2016.
7. ‘Marx’s Criticism Against Utilitarianism • Philosophy Discussion Forums.
8. Onlinephilosophyclub.com. N.p., 2016. Web. 1 Dec. 2016.
9. ‘Cost-Benefit Analysis: Deciding, Quantitatively, Whether To Go Ahead’. Mindtools.com. N.p., 2016. Web. 1 Dec. 2016.
10. If It Feels Good, Do It: Jeremy Bentham’s Hedonistic Calculus. ‘If It Feels Good, Do It: Jeremy Bentham’s Hedonistic Calculus’. Science 2.0. N.p., 2016. Web. 1 Dec. 2016.
11. Driver, Julia. ‘The History Of Utilitarianism’. Plato.stanford.edu. N.p., 2009. Web. 1 Dec. 2016.

Business Ethics in Enron: Analytical Essay

Enron, at its zenith, was the largest energy trading company worldwide and the seventh largest corporation in the United States of America. Kenneth Lay founded the company during the 1980’s in Houston, Texas, and he, alongside Jeffrey Skilling, are recognized as the figures behind the company’s growth and success. From 1996 to 2000, company sales increased nearly eight-fold from $13.3 billion to a whopping $100.8 billion. In August 2000, Enron shares reached its peak with a value of $90.56, and the company had a market value of $70 Billion.

The company was unprecedented in terms of rapid growth and, as it was, all they had achieved was truly too good to be true. Within a year from accomplishing this impressive feat, the company was in shambles. Their CEO resigned, misleading reports were published, incriminating documents were destroyed, share value fell to $1.00, a desperate buy-out failed, and the company filed for bankruptcy.

The downfall of the Enron executives was rooted in their insatiable greed. They could have grown their company slowly and organically, but instead, they chose a hasty but unethical expansion. Enron had a proclivity for practicing a myriad of unethical practices which include embezzlement, unfair wages, exploitation of a deregulated market, and obstruction of justice. The chief issue that led to their downfall was their questionable accounting practices that massively overstated company revenue to lure investors under the guise of profitability.

First and foremost, Enron executives were involved in embezzlement. Embezzlement is a white-collar crime wherein funds entrusted to an employee are misappropriated. The two CEOs took advantage of Enron’s profits, when it was still in its heyday, and pocketed a substantial amount of company earnings. Company CEOs Jeffrey Skilling and Kenneth Lay were both charged with embezzlement due to fraudulent transactions. Skilling’s accounts showed multiple fund wire transfers to Raptor, a financial structure backed by Enron stock. Lay, in addition to also being found guilty of wire fraud, was charged with making false statements to banks that netted him a hefty cut of $75 million.

In terms of unfair wages, Enron utilized a flawed compensation and performance management system wherein the most valuable employees earned an unreasonable amount more in salaries and bonuses than average performing employees. This prompted the establishment of a dysfunctional corporate culture that prioritized short-term earnings since it maximized bonuses. Enron employees would close whatever deals they could, regardless of quality, in order to attain better performance ratings and qualify for large cash bonuses and stock options. Enron awarded these top employees with unreasonable salaries. Their wages were as much as twice of those with the same position in rival companies. In the year 2000, the two hundred top employees of Enron were awarded a collective $1.4 billion in the form of salaries, bonuses, and stock.

The obstruction of justice case in question was not against Enron; it was directed towards Arthur Andersen whose firm was in charge of auditing Enron. Andersen was found guilty of obstruction of justice because he deleted thousands of emails, documents, and company files related to the auditing of Enron. This felony resulted in the loss of the company’s CPA license which in turn, caused 85,000 people their jobs.

In 1999, California deregulated its energy market. Tim Belden, head of Enron’s West Coast Trading Desk in Portland Oregon, exploited this deregulation by congesting California power lines which caused an energy crisis in the state. This raised electricity prices which put more in the pockets of Enron executives, but at the same time, it caused California a loss of $ 7 million. Moreover, due to Enron executives having strong connections with powerful people in the White House, Enron as a whole was deregulated. The implication of this was that Enron was free to operate without scrutiny from the government. This is largely how the company escaped incarceration for any of its countless illegal acts.

Another questionable practice that further cements the lack of ethicalness of Enron CEOs is when in 1988, a group of stock analysts were invited to tour the Enron Energy Services office. They were deceived into believing Enron was a much larger company than it actually was because Skilling instructed employees from other offices to act as if they were workers in that office. This was done to convince the analysts that the company was much larger and successful than it actually was which would help improve stock prices.

Lastly, the most well-known and documented of Enron’s unethical acts was its questionable accounting practices.

Technically, the accounting method they utilized, mark-to-market accounting, is legal, but it is practiced mostly by Finance companies. Enron was the first energy company to adopt this method which was entirely unsuitable for a company in that industry. Their rationale for utilizing this method was unethical and greedy. They exploited this method as a loophole to misrepresent company revenue. Mark-to-market accounting involves automatically listing income from long-term contracts at present value. In other words, income expected in the far future can be recorded at present instead of when it is actually earned. This resulted in a misrepresentation of revenue since large sums of money the company has not earned were already listed as present profit. Moreover, since the profit was already recorded in the present, it could no longer be counted when it is actually earned; therefore, Enron needed to continuously sign for new projects and close deals to include in their reports for the appeasement of their investors. Furthermore, this method is also known for having large discrepancies since much guesswork is done to estimate profits and cash. Consequently, reports given to investors were often misleading or entirely false.

Another unethical habit Enron practiced was declaring cancelled projects as assets. This was a method known as “the snowball” which legally allowed booking costs of cancelled projects worth up to $200 million to be considered assets, as long as there is no official letter marking the project as cancelled. Enron exploited this loophole to an unreasonable extent. For instance, in July 2000, Enron closed a deal with Blockbuster Video to bring on-demand entertainment to US Cities. This agreement was set for 20 years and Enron recognized an estimated $110 million from the first projects of the deal; however, the network soon failed and Blockbuster withdrew. Overall, this resulted in negative profits for Enron, but they continued to recognize future profits from the failed deal.

Another case of questionable accounting was Enron’s creation of “special purpose entities”. These were limited partnerships or companies that existed to fund or manage risks of certain assets. Enron used hundreds of these shell companies to conceal their debt and circumvent accounting conventions, resulting in lowered liabilities and overstated income. An example of this was Whitewing. Enron contributed $579 million for its creation in December 1997. Whitewing was then used to purchase $2 billion worth of Enron assets with Enron stock as its collateral. This transaction was recorded as sales for Enron when, in fact, it was an asset transfer that should have been considered a loan.

Filipino values at work in the Enron scandal are corruption, poorly distributed wealth, delikadesa, exploiting connections, and primacy on the name.

Corruption is evident in the actions of the Enron executives. Skilling and Lay were found guilty of multiple counts of fraud. They practiced corruption by taking cuts from company profits and awarding themselves excessive and large sums of bonuses.

The poor distribution of wealth was clear in the compensation system of the company. There was a large discrepancy between the salaries of the few top performing employees and the rest of the employees. The distribution of salaries was unfair and heavily favored the few who were on top much like the colossal gap of wealth between the tens of millions of poverty-stricken Filipinos and the small population of rich Filipinos.

Another Filipino value at work is delikadesa. There was a complete lack of this on the side of Enron who thrived on misrepresentation. Delikadesa was exhibited by Sherron Watkins, the whistleblower who exposed Enron for its unethical actions. Watkins was an Enron executive who had the propriety and hiya to reveal Enron’s shameful sins. She braved the backlash from her co-workers because she had the decency and bravery to be the whistleblower.

Exploiting connections is another trademark of Filipinos. Most often seen in politics, exploiting connections is a common practice powerful Filipinos use to further their own agendas. In this case, the Enron executives exploited connections by using their close ties to the White House to conceal their actions. Being closely connected to powerful officials swayed the government into turning a blind eye towards Enron’s questionable acts.

Primacy on the name was most evident on the part of Arthur Andersen, the auditing firm affiliated with Enron. Arthur Andersen himself was guilty of obstruction of justice because he erased emails, documents, and files that tied their accounting firm to Enron. Andersen’s name and honor was on the line because of their connection to the disgraced Enron and in attempt to rectify this, he obliterated any evidence of his firm’s role in Enron’s misleading reports.

The primary ethical dilemma in the Enron narrative is the executives choosing between running a business with lower revenues but honestly or with high profit margins but dishonestly.

From a subjectivism standpoint, one can argue that the Enron executives personally believed they were in the right. In subjectivism, determining whether an act is moral or not depends solely on the one making the decision. If Lay and Skilling feel that their actions are justified, then from their views it is acceptable. In the view of objectivism, one would need to examine the culture wherein Enron is immersed. As one of the top Fortune 500 companies, Enron thrived in the cutthroat Wall Street environment where morals and values can be slim to none. Other business cultures may be less forgiving in regards to ignoble acts, but in a place like Wall Street, questionable practices are commonplace and acceptable to a certain extent. In relativism, one could argue that the actions of Enron will always be wrong. In this theory, there is only one right or wrong and fraud and dishonesty should always be unacceptable regardless of the situation at the time.

From the view of utilitarianism, the decisions made by Enron can be considered a failure. This is because regardless of the means, the end result was failure. The actions of Enron resulted in their bankruptcy, the loss of employment of tens of thousands, and jail time for a number of Enron executives. Furthermore, their decisions are wrong because they caused substantial harm to other parties as well. Investors and stockholders lost billions in value and California residents suffered immensely from the energy crisis caused by the greedy and intentional congesting of power lines.

In Kantian Ethics, Enron was also still wrong. In Kantian Ethics, the most important factor when identifying if an action is ethical or unethical is goodwill. Enron demonstrated a complete lack of this. As evinced by their greedy actions towards investors, their company had no care for the welfare of others, only themselves.

In considering Ethics of care, it is evident that Enron did in fact, not care. They took no actions to fulfill their corporate social responsibility. They showed no empathy for the hundreds of thousands affected by their actions. They indicated no remorse for all the sins and atrocities they committed against humanity. The executive especially only cared about pocketing more money.

In virtue ethics, the unethicalness of their actions can be attributed to poor character and failure to observe the mean. Their business model was immoral because it was too greedy. It focused too much on profit and did not balance with goodwill and charity. The character of the executive, and the subsequent decisions they made, wrote Enron off as another selfish company with no regard for its employees or the masses.

One of the major ways Enron erred was in their impatience. The Enron CEOs, Skilling especially, were unsatisfied with the regular pace of company growth. Hence, they resorted to misleading the market and investors into believing their profits were much more than they actually were. Through exercising patience and growing their company organically, Enron could have stayed a viable business.

To rectify the issue of public mistrust, Enron should have been less deceitful. Enron misled the public and the business community into believing a number of their lies. For instance, they fooled analysts into believing the company had much more employees than there actually were. They also released many misleading financial reports which massively overstated their revenues. Lies of any sort ruin the credibility of a company, and as such must always be avoided to preserve a business’ reputation. The correct course of action of a business in any industry should be transparency. Enron was labeled the darling of Wall Street for a time but it was built on lies so it did not last. Truly, fake reputations are only temporary and the truth is bound to reveal itself at some point. Consequently, the safest choice for sustainable growth is to be transparent. After all, it is better to build a company slowly but surely than have one grow quickly but crash and burn just as fast.

The Enron scandal is the proverbial tale of how unethical business practices such as fraud, unfair wages, exploitation, obstruction of justice, and misleading reports can lead to the complete and abrupt decimation of a company that in its prime was even once named the most innovative large company in America in Fortune magazine’s survey of Most Admired Companies. In the Enron narrative the Filipino qualities of corruption, poorly distributed wealth, delikadesa, exploiting connections, and primacy on the name shined through. From the standpoint of nearly every ethical theory, the actions of Enron were wrong. Their means was questionable, and their end was a failure. They showed no remorse, and their character was poor. In the end, they failed due to their greed and penchant for misleading the public. Enron should have been more patient and grown their company in a sustainable fashion. They should have been less deceitful with their decision-making because in the end, their lies only brought them temporary success. True success cannot be cheated; it is earned through years of tireless honest work.

References

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Unethical Wal-Mart Business Practices: Case Study

Introduction

Wal-Mart, a giant company that keeps many clients, is widely known both at home and abroad for its huge variety of low-price goods and services. It was created by a very creative and innovative businessman, Sam Walton. Wal-Mart has done very well for itself because, in terms of its discounting retailing, it has defeated many other organizations.

It is thought to be the United States of America’s largest corporation. According to PBS, ‘Wal-Mart employs more people outside the federal government than any other corporation in the United States, and most of its employees with children live below the poverty line.'(pbs)

Walmart has been opposed by numerous groups and individuals, including labour unions, community groups, grassroots organizations, religious organizations, environmental groups, gun activists, and consumers and employees of the company. Some of the most critical unethical business practices initiated by them are as follows:-

Unethical Wal-Mart Business Practices

1. Labor Union Opposition.
2. Unfair Treatment to Employees.
3. Child Labor Violations.
4. Low Wages.

Thesis Statement – Successful Corporations are only those that protect themselves from unethical business practices because they are unavoidable.

Background

Walmart Inc. is an American multinational retail company with headquarters in Bentonville, Arkansas, running a network of hypermarkets, discount department stores, and grocery stores. Founded in 1962 by Sam Walton, the company was incorporated on October 31, 1969. It also owns and operates discount stores for Sam’s Club.3 As of 31 October 2019, Walmart had 11,438 shops and clubs in 27 countries, operating under 55 different names.4

According to the Fortune Global 500 list in 2019, Walmart is the world’s largest revenue company with US$ 514.405 billion. With 2.2 million workers, it is also the world’s largest private employer. It is a family-owned publicly traded business, as the Walton family controls the company. Sam Walton’s descendants own over 50 percent of Walmart through their holding company Walton Companies and their private holdings.5 Walmart was the biggest U.S. food store in 2019 and 65 percent of Walmart’s $510.329 billion sales came from U.S. operations.6

The New York Stock Exchange listed Walmart in 1972. By 1988, it was the most profitable retailer in the U.S.7 and by October 19898 it had become the largest in revenue.

Before we delve into Walmart’s unethical business practices, let’s define ethics first. Ethics is defined as ‘The general and abstract concepts of right and wrong behavior which are derived from philosophy, theology and professional societies.’9 Ethics is also defined as’ moral principles, irrespective of the situation or circumstances, through ethics, culture and religion.”.10

The definition of ethics in business decisions covers all aspects of a business organization’s activities. There is always a propensity for ethical issues to emerge in a global market, and multinational companies are no exception.11 Multinational corporations are facing a dynamic and complicated global market where right and wrong could be viewed as varying widely.12

Walmart is still performing some of the riskiest unethical business practices, being the biggest company in terms of sales and the number of people working. Below is the analysis done by me on the unethical practices carried out by Walmart. The unethical practices mentioned are analyzed on three basis, namely,

1. Why do these problems/unethical practices exist?
2. How do these problems/unethical practices affect Walmart Inc.?
3. Who is responsible for these problems/unethical practices?

Unethical business practices

Labor Union Opposition: – Walmart is a non-union company. Instead of relying on unions, they operate on an open-door policy. United Food and Commercial Workers Union filed a complaint against Wal-Mart with the National Labor Relations Board. ‘The complaint filed with the National Council on Labor Relations claims that Wal-Mart has breached Federal Labor Law by bribing employees to spy on those co-workers that demanded labor unions.”13

Why does Labour Union Opposition exist in Walmart?

1. Unemployment – The economist Milton Friedman, who supports laissez-faire capitalism, argues that unionization always creates higher pay at the cost of less workers, and that wages would decrease in non-unionized industries if some sectors are Unionized while others aren’t.14
2. Efficiency – Sherk argues this is more prevalent for businesses with a competitive advantage (the unions have trouble lowering profit in the competitive market), as this ensures that these firms have greater profits than average, so that redistribution is not in danger of alarming investors.15
3. Corruption – Several unions, like the Teamsters, have been blamed for being active in organized time.16
4. Cost-Push Inflation – With wage increases over the market rate, employers increase cost to businesses and cause prices to rise, leading to a general price increase.17

Note: – These were some of the reasons, which led Walmart Inc. to oppose labour unions in their company.

How did the Labour Union Opposition affect Walmart Inc.?

The labour union opposition affected Walmart Inc. negatively mostly. These impacts can be analyzed from the following affects that it had on the company.

1. In 2000, in Jacksonville, Texas, meat cutters voted to unionize. Subsequently, Walmart abolished in-house meat-cutting workers for pre-packaged products, arguing that the move will cut costs and avoid legal proceedings.18 Walmart argued that the national elimination of in-house meat processing was planned for many years and was not connected with unionization.
2. A successful unionization for a Walmart store in Jonquière, Quebec (Canada) in 2004 was completed, but Walmart closed the shop five months later, because the company did not approve the union’s new business plan.19 In September 2005, the Quebec Employment Board held that the closure of a Walmart store would be a reprisal against unionized workers..20
3. In August 2006, Walmart announced that it would allow employees of all Chinese trade unions to enter trade unions and would work for 28,000 workers with the state-sanctioned All-China Trade Union Federation (ACFTU).21 The All-China Federation of Trade unions was criticized because it is the only trade union in China and a method to use of the government. ACFTU was viewed as not acting in the best interest of its members (workers), bowing the pressure of public authorities on industrial growth and not upholding workers ‘ rights.
4. In November of 2012, the United Food and Commercial Workers and several Walmart workers initiated a campaign to go to strike on Black Friday in several stores across the country in protest of low pay, a rise in health insurance premiums, and not the option of taking a day off or Thanksgiving off.22

Who is responsible for the Labour Union Opposition?

The top management is primarily responsible for the opposition labor union, and the managers followed the lead afterward. This could be highlighted through the following incidents:-

1. In 1970, late Founder Sam Walton of Walmart resisted an anti-union campaign by pushing retailers International Union to push for unionization in two small towns in Missouri. Walmart retained an Alpha Associates firm to develop a Union prevention programme.23
2. Walmart CEO Tom Coughlin was pressured in March 2005 to resign its board of directors, under embezzlement charges.24 Coughlin alleged that the money was being used to carry out an anti-Union project involving cash bonuses paid to employees of the United Food and Trade Union, in exchange for a list of names of workers of Walmart who had signed the cards.25
3. A lawyer from the United States said that Coughlin’s initial claims were not supported by evidence and, while Coughlin himself reportedly reaffirmed those statements to journalists after his arrest, Walmart continues to deny that there was an anti-union campaign.

Unfair Treatment to Employees: –

Walmart, the largest private employer in America with 1.5 million staff, has been criticized for its strategy of putting profit first, and in particular above its employees. The company’s policy of sick leave was described in a new report on the ‘ absence control system ‘ by Walmart as ‘brutally unjust’ and ‘often against the Law.’ Further, Wal-Mart was strongly alleged to discriminate against women within the organization. Females were also apparently underpaid than men.

Why does Unfair Treatment to Employees exist in Walmart?

Employee inequality is a form of discrimination based on workers ‘ ethnicity, gender, religion, national origin, physical and mental incapacity, age, sexual orientation and sexual identity. Discrimination can be intended and involve inconsistent or unintended treatment of a group, yet create disparate effects for a group. The discrepancy is one type of illicit discrimination in US labor law. In the United States, it implies unfair behavior towards an individual because of a protected characteristic (e.g. race or gender).26

From the above definitions, we can conclude that Walmart is treating its employees unfairly due to one of two reasons or both, namely, it can unintended or it can be intended where they treat a particular group favorably or unfavorably due to the reasons mentioned above.

How did the Unfair Treatment to Employees affect Walmart Inc.?

Their unfair treatment towards different groups has been affected adversely by disparaging their own image and paying huge fines in courts settlements, as can be viewed from the following instances.

1. ‘In June of 2001 a group of six current and former female employees of Wal-Mart filed a lawsuit against the company against sex discrimination (who seeks to represent up to 500 000 Wal-Mart workers).’27
2. Wal-Mart struggled to provide women with equal opportunities in terms of employment, even though Walmart hires more than 70% of women, only a few of them are executives, which means that there are men at the top management of the business.
3. Walmart, the largest private employer in the country, regularly refuses to accept reports from physicians, penalizes staff who need to look after the sick family and punishes workers for legitimate absences.28
4. The above report is based on an inquiry by more than 1,000 employees, accusing Walmart, inter alia, of breaking the American Disability Act and the Family and Medical Leave Act. This month, in a lawsuit, the organization alleged that Walmart discriminated against pregnant workers in an earlier petition to the Equal Employment Opportunity Commission. Walmart said it did not review the report, but disputed the group’s findings.29

Who is responsible for the Unfair Treatment to Employees?

Mainly, the top management is responsible for the unfair treatment of its employees. These would comprise executives because they’re the ones who hire managers and we know that 65% of Walmart’s hourly paid workers are female workers, but only 33% of them are in Wal-Mart’s top management.30 Only 35% of its retail managers are women, compared with 57% in equivalent shops. On the other hand, keeping comparing Walmart with other retailers is unfair since it characterizes workers differently; if the total number of managers in departments were included, women would account for 60 percent of management levels.31

Child Labor Violations: –

The New York Times reported in January 2004 on its internal Wal-Mart audit carried out in July 2000, which examined the record for approximately 25 000 employees in a time clock of one week. The Times stated that ‘the audit identified large breaches of child labor laws and government regulations, including 1,371 cases of juveniles who work too late, leaving or not attending school and working too many hours a day. There were 60,767 missed breaks and 15,705 missing meals.

Why does child labor exist in Walmart?

1. Poverty is widely regarded as the primary reason why children work in insufficient jobs for their ages. Children work because their parents are poor; their family incomes must be supplemental or unpaid.
2. Note that children in England were considered acceptable to work in cotton mills at aged 5 years or older.
3. The relatively low salaries paid to children are often why employers like Walmart executives prefer them to adults for the jobs. Some children are unpaid, especially as domestic workers, if adults are involved in those conditions then it would be called ‘slavery.’ Employers find children more obedient and easier to control. With young workers, strikes or trade unions are unlikely to be launched.
4. The failure to attend school is a cause and effect of child labour. Education is not free in many countries, so parents often pay a fee for their children to attend primary school, buy books and provide school uniforms.

How did the child labor violations affect Walmart Inc.?

The child labor violations has affected Walmart negatively by disparaging their own image and paying huge fines in courts settlements, as can be viewed from the following examples:-

1. Wal-Mart Stores, the biggest company in retail, it has agreed to pay $135,540 in federal charges that in Connecticut, New Hampshire and Arkansas as it violated child labor laws. In the settlement, Wal-Mart promised to exclude any staff under 14 years of age from working on balers and agreed to ban workers under 18 years of age.
2. Wal-Mart promised to train new store managers to comply with child labor laws and to provide current managers with more education in the subject.
3. On January 6, the Labor Department and Wal-Mart signed the agreement but made no public announcement. The agreement states, ‘Compliance with child labor laws and regulations will be an important factor for the assessment of management’s performance.’
4. A clause of the settlement further agrees to notify Wal-Mart 15 days in advance before the agency investigates any other ‘salary and hour’ fees, such as a failure to pay minimum wages or overtime.

Who is responsible for the child labour violations in Walmart Inc.?

Walmart and primarily executives in the business are responsible for the infringements of child labour. There may be cases where top management i.e. executives, may not be aware about child labour in their company. Labour officials said that most of the 24 settlement violations involved employees under 18 years of age operating in hazardous equipment, such as cardboard balers and chain saw. Wal-Mart denied any wrongdoing in the Agreement, but at the same time promised to train new shop managers in compliance with child labour laws and to provide the existing managers with more education on this subject.

Low Wages:

Wal-Mart is accused of paying very low wages to its workers, with an average annual income of between $12,000 to $17,000 per annum. ‘The main justification of Wal-Mart is that it delivers lower prices for its and somehow excuses that sinfulness.’ In addition, Wal-Mart has an expensive insurance system and Wal-Mart workers can’t manage to pay for their health insurance again. Employees serving the company over time haven’t enjoyed the benefits of their labor since they haven’t been paid for overtime services rendered.35

Why does low wages to employees exist in Walmart?

1. Walmart Inc. provides its employees with low wages so they can make more profit by cutting costs as wages and pay which make a large part of their expenses.
2. Because of the current legislation, businesses such as Walmart must pay a mandatory minimum wage but are expected to save labor costs everywhere, they can.
3. A minimum wage increases the cost of items and thereby decreasing the demand for its products. In order to avoid this situation, the low wages are given by Walmart to its employees.
4. The reason for the existence of low wages could be due to unfair treatment of employees as discussed above.

How has the Low Wages affected Walmart Inc.?

Similarly, like other criticism mentioned above Walmart was affected unfavourably because of providing low wages to its employees and this harmed their public image as well as costing them hundreds of millions of dollars as settlements in court dispute cases. This could be highlighted below:-

1. By 2008, Walmart promised to pay at least $352 million for trying to pressure workers to work off a clock. “Several lawyers described the proceedings on wage violations as the largest settlement ever.’37
2. On September 4, 2008, the Mexican Supreme Court ruled that Walmart de Mexico, Walmart’s Mexican affiliate, would stop partly paying employees by redeemable coupons at Walmart outlets only.38
3. In July 2016 several employees in China went on informal strike against the new system of work hours at Walmart outlets in Nanchang, Jiangxi Province, the Chengdu Province of Sichuan and Harbin City in Heilongjiang Province.39 Since Walmart employs part-time and relatively low-paid workers, some workers may be partially eligible in the welfare program.40 This has led to criticism that Walmart has increased the burden on taxpayer-funded services
4. Berkeley claims that the low wages and benefits of Walmart are insufficient for a 2004 study at the University of California and that the social security burden is decreasing, although California taxpayers still pay $86 million a year to Walmart employees.42

Who is responsible for Low Wages in Walmart Inc.?

Previously, Walmart owner Sam Walton said ‘I pay low wages. I will benefit from this. We’re going to succeed, but the foundation is a very low-wage, low-earnings job template.’43 Walmart estimates that the employees were paid $10.11 an hour on average in 2006.

Human Rights Watch estimate that this is less than the mean of 10.24 dollars earned by discount department stores, 10.55 dollars for warehouse clubs and supercentres, and 11.12 dollars for grocery stores.44 Walmart managers are judged in part on the basis of their ability in controlling the cost of wages.45

Walmart insists its wages are generally in line with the current local market in retail labour.

From the above information we can conclude that the one responsible for the low wages in Walmart is entirely the top management, which can be seen from Sam Walton’s statement.

Business Ethics Essay with Literature Review

Abstract

As of not long ago, in business practice, there was a conviction that organizations were working exclusively for the profit of their proprietors. Hardly any organizations have perceived the need to join their exercises with ethics, and specifically with their commitments toward society or the earth. Be that as it may, the view of ethical issues has changed fundamentally in business throughout the most recent 20 years. If an organization needs to be seen as a solid business accomplice and a regarded individual from the business area, it ought to show a significant level of regulation of business ethics standards and practices, and it must work on outstanding ethical conduct. This is particularly valid in some dubious businesses.

Introduction

Up to this point, in business practice, there was a conviction that organizations were working exclusively for the profit of their proprietors. Barely any organizations have perceived the need to consolidate their exercises with ethics, specifically with their commitments toward society or the earth (Majerova, Krizanova, and Nadanyiova, 2015). It is additionally a motivation behind why the embodiment of social obligation and the contention among genuine and reproduced charitableness has been fiercely talked about.

After some time, be that as it may, the perspectives on the job of organizations in financial reality, got from traditional financial aspects, have become progressively less important to the current financial reality. Moreover, there have been various changes in the circle of current business tasks. Globalization, joined by quick mechanical changes, has offered to ascend to a new business condition. Under these new conditions, the improvement of a cutting-edge organization is resolved not just by the successful utilization of assets and applying suitable systems but also by considering the idea of Corporate Social Responsibility and business ethics in the executives’ forms. For instance, Bhattacharya, Sen, and Korschub (2011) demonstrate a quick changing methodology of organizations to Corporate Social Responsibility:

• the idea of Corporate Social Responsibility is progressively seen as a business opportunity, not as a commitment,
• organizations are starting to see the job of other partners, for example, financial specialists, controllers, representatives, non-profits,
• the idea of Corporate Social Responsibility is being treated as a vital, long-haul approach, not as a solitary shot, as an erratic activity for the time being.

Literature Review

Business ethics (otherwise called corporate ethics) is a type of applied ethics or professional ethics that looks at the ethical standards and good or ethical issues that emerge in a business domain. It applies to all parts of business lead and is significant to the direction of people and whole organizations. Ethical conduct and Corporate Social Responsibility can carry noteworthy advantages to a business. For instance, they may (Lorinczy and Sroka, 2015):

• pull in clients to the organization’s items, thereby boosting deals and profits;
• guarantee that representatives need to remain with the business, lessening work turnover and therefore expanding efficiency;
• pull in more representatives needing to work for the business, therefore empowering the organization to contract the most gifted representatives;
• draw in speculators and stay with the offer value high, thereby shielding the business from takeover.

Conversely, unethical conduct or an absence of corporate social obligation may harm an organization’s notoriety and make it less speaking to investors, prompting a fall in profits. The term ‘ethic’ originates from Greek (ethics – standard; ethics – custom). It tends to be characterized as a theory of profound quality, which endeavors to systematize moral decisions (Paswan, 2015), or moral standards utilized in dynamic (Salehi, Saeidina, and Aghaei, 2012). In the presence of the mind of the word, ethics implies the principles that decide if conduct is correct or wrong. Ethics in business has a long history (Fischer and Lovell, 2009).

A progression of defilement scandals related to organizations, for example, Enron or WorldCom has changed the open view of numerous elements. Because of the scandals and misuses uncovered, certain desires identifying with incorporating this theory emerged. Therefore, in the twenty-first century, the business has changed: from the absence of responsibility toward the start to significant levels of ethical obligation these days. It would thus be able to be expressed that business ethics is a logical order in managing the ethical setting of the board and administration.

Discussion

Ethics—the qualities an organization exhibits in its objectives, arrangements, and practices—are the core of any work environment culture. The nature of involvement with an organization relies upon the nature of its way of life. Whether we are workers, clients, or customers, a positive culture animates and improves our experience of a firm—and a negative culture lessens it. We ought not to be astonished by the connection between ethical working environment culture and profit. Specialists have discovered that an organization’s way of life is the most grounded indicator of how much market esteem a firm will make for each dollar contributed by investors. Somewhere in the range of 1993 and 1998, securities exchange returns of the traded on open market firms with the most grounded societies beat the financial exchange by a normal of 20 percent (Fischer and Lovell, 2009). The proof shows that a positive working environment culture predicts investor esteem by empowering predominant worth creation. The ethics of a firm’s way of life assumes a critical job in making and continuing worth.

Ethics starts with the objectives we look to satisfy. We get our objectives from our qualities. In a working environment, our qualities can be separated into organizational, professional, and individual. The more perplexing our objectives, the more mind-boggling our qualities. A decent part of working environment ethics concerns articulating and imparting our qualities, then refining them to assess activities, arrangements, individuals, and occasions. Discussion and conversation cultivate ethical learning. Practically all ethical learning happens when individuals talk about and banter about their qualities. We learn ethics by tuning in to others as they respond to our thoughts. On the off chance that we don’t well-spoken our qualities, then nobody can react to us, and no ethical learning will happen (Salehi, Saeidina, and Aghaei, 2012). In other words, the ‘ethical muteness’ of numerous supervisors and representatives forestalls ethical learning. Ethics help us make ‘right versus right’ decisions. At the point when commendable objectives strife and we can’t pick between two objectives, our ethics direct dynamic. For instance, we may feel conflicted between applying rules fair-mindedly and demonstrating benevolence to an individual or gathering. In examining such a ‘right versus right’ decision, we might be enticed to legitimize our own decisions as ethical and judge other decisions as unethical. An ‘I’m ethical, and you’re not’ way to deal with a difficulty isn’t just pretentious; it additionally chillingly affects discussion and squares ethical learning. We are ideally serviced by encircling answers as ‘increasingly satisfactory’ and ‘less sufficient,’ rather than as ‘ethical’ and ‘unethical.’ A progressively sufficient ethical decision will (Hatcher, & Aragon, 2000):

• Consider what is in question or hazard for a greater amount of the gatherings influenced by the choice.
• Prioritize moral interests over interests in laws, jobs, contracts, or existing social practices. Albeit such things can be a piece of our decisions, advances to moral criteria fall more by ethics.
• Appeal to standards that are shared by others, paying little mind to age, culture, or individual inclination, not thin partisan standards or quirky convictions.
• Be unprejudiced, declining to support some to the detriment of others.

All working environment societies are not made equivalent. Some are more ethical than others. The initial step to improving society is to evaluate its present state. Ethical societies are estimated by seeing three elements: ethical substance, how well ethics are incorporated into the organization’s ordinary activities, and how well every individual sticks to ethical practices. Ethical substance Ethical working environment societies organize self-amazing quality qualities, for example, care, sympathy, genuineness, and the obligation to maintain the privileges of all things considered and nature. These others concerning esteems trump self-improving qualities, for example, riches, influence, delight, and acclaim. Truth be told, as opposed to mainstream thinking, individuals the world over organize self-rising above, ethical qualities over self-upgrading values. In business, magnanimity converts into organizing worry for representatives’ privileges, reasonable methodology, and equity in pay and advancement, just as showings of resilience, sympathy, unwaveringness, and genuineness in the treatment of clients, customers, and workers (Carroll, 1978). These qualities, whenever developed and energized, are the bedrock on which to manufacture ethical organizational activities. Ethical activities When we state that one organizational culture is ‘increasingly ethical’ than another, we allude to how satisfactorily the organization’s qualities, frameworks, and approaches address the intricate real factors of its regular tasks. Ethically satisfactory working environment culture will use such basic devices as onboarding, execution and advancement strategies, job displaying, interchanges, and worker input to incorporate ethics with its activities.

Consistency alludes to the standards, values, and ethical desires set by the organization and its administration rehearses. Consistency is the establishment on which each ethical working environment culture stands. The organization’s standards, qualities, and desires must be imparted in solid terms that all representatives can understand and that relate straightforwardly to their everyday work exercises. On the off chance that representatives can’t perceive how the firm’s qualities shield its strategic upgrade their commitment to that crucial, will see consistency as a bothersome extra, rather than as a feature of each workday.

Conclusion

In recent years, the view of ethical issues in Europe has changed considerably. At first, they were dealt with additional in philosophical terms, and to a limited degree alluded to the business. At present, ethical research is fundamentally centered around business issues, and thousands of individuals are engaged with research and preparing on business ethics. Our exploration directed at three disputable parts of the economy, i.e., pharmaceutical, tobacco, and liquor, confirmed the developing significance of Corporate Social Responsibility and business ethics in contemporary business. The inventiveness of the paper is the consequence of the introduction of interesting subjective research identified with business ethics in delicate segments of the economy in two Central European nations. The nations have been picked because of huge contrasts between them as Poland’s economy is right around multiple times bigger, while Hungary has a significantly more open economy. Areas, for example, pharma, tobacco, and liquor are often blamed for manufacturing faulty items or applying industrywide acts of neglect; therefore, watching their ethical standards and practices unquestionably gives huge new bits of knowledge right now. Such research is generally uncommon (because of the delicate idea of the segments investigated) in these two nations as well as on a global scale.

References

1. Bhattacharya, C.B., Sen, S., & Korschun, D. (2011). Leveraging corporate responsibility. The stakeholder route to maximizing business and social value. Cambridge: Cambridge University Press.
2. Carroll, A. (1978). Linking business ethics to behavior in organizations. Advanced Management Journal. 43. 4-11.
3. Fischer, C.M., & Lovell, A. (2009). Business ethics and values: individual, corporate and international perspectives. London: Pearson Education Limited.
4. Hatcher, T., & Aragon, S. (2000). Rationale for and development of a standard on ethics and integrity for international HRD research and practice. Human Resource Development International, 3(2), 207-219.
5. Lőrinczy, M., Sroka, W., Jankal, R., Hittmár, Š., & Szántó, R. (2015). Trends in Business Ethics and Corporate Social Responsibility in Central Europe. Aachen: Shaker Verlag.
6. Majerova, J., Krizanova, A., & Nadanyiova, M. (2015). Game theory in the concept of Corporate Social Responsibility – is altruism a cause or a consequence of CSR? Advances in Education Research, 80, 351-356.
7. Paswan, R.K. (2015). Role of ethics in modern business: an important key aspect of the concern.
8. Salehi, M., Saeidinia, M., & Aghaei, M. (2012). Business ethics. International Journal of Scientific and Research Publications, 2(1), 1-4.

Essay on Is Business Ethics an Oxymoron

Definition of terms

• Business

This is a complex economic operation concerning those functions that govern the production, distribution, and sale of goods and services for the benefit of the buyer and the profit of the seller (Collins,1994).

• Ethics

These are the principles of human conduct, sometimes called morals, and are concerned with questions such as ‘when is the act right and wrong and what is the nature or determining the standard of good and bad’ (Beauchamp, 2004).

• Business Ethics

It can be regarded as the study of business situations, activities, and decisions where issues of right and wrong are addressed (Shaw, 2004).

• Oxymoron

Means the bringing together of two contradictory concepts. To say that business is an oxymoron suggests that there are not, or cannot be ethics in business; that business is in some way unethical. (Lueck, 2008).

Long back, it was thought by classical economists like Milton Friedman that the “primary and only responsibility of business is to make money” while abiding by the law. Which is to say, engages in an open and free competition without deception or fraud. He argues that a corporation is an artificial person and therefore cannot be socially responsible, only people have responsibilities. Socially responsibility concerns the proprietors and corporate executives. He goes on to specify the traditional view of a managerial role, Friedman says, that a manager has a direct responsibility to his employers to conduct business in their desires which is to maximize their return on investment (Friedman,1962).

He argues that if social responsibility is exercised, it is acting against the shareholders, owners of the business”. Hence, he argues that a manager pursuing social responsibility violates the relationship between shareholders and the company. After all, it is the shareholders who own the company and they have hired the manager to do a specific job. Friedman goes ton to argue that businesses should focus on what they do and leave ethics to individuals. Hence e Friedman’s view is akin to social Darwinism, applying the survival of the fittest principle to the market to ensure the best of all possible outcomes (Friedman, 1970).

However, Friedman’s theory only benefits the business in the short run. This is seen in the case of Enron which was one of the largest energy producers in the world. When it was discovered that Enron had been using unethical and illegal accounting practices. These accounting practices enabled executives to grossly overstate the value of Enron. After getting caught, the company was forced to declare bankruptcy. It all happened because of a lack of ethical leadership. (Anderson, 2013).

Therefore Maxwell explains the reasons businesses and individuals tend to make decisions that can be unethical is that, they tend to take the easy path towards their objective regardless of its moral aspect, that people have the idea that being ethical limits the options in what concerns winning over the competitors and tend to consider actions according to the circumstances and not according to what is moral and ethical like in the case of Enron concentrated on maximizing the profits without thinking about the processes they were adopting (Maxwell, 2003).

Today many businesses are involved in social action. Society’s expectations are changing and the trend seems to be toward greater social responsiveness. Ethics has found its way back into the agenda of organizational leaders. Companies nowadays are expected to budget their financial plans taking into account the social commitment and social responsibility initiatives to be taken in the next few years. Hence corporate social responsibility is one of the ethical aspects of business ethics (Paine, 2003).

According to Raj’s view ba business is an economic entity and it has a right and needs to make profits, but it must also discharge its obligation to the society where it exists and operates. Hence manager’s role is corrected today as compared to the traditional view of Friedman. Collins notes that the way to correct that view is to strengthen the manager’s understanding of ethical aspects of utilitarianism which would instruct managers to do those things that will enable the greatest good and deontology would instruct managers to respect individuals by recognizing their rights and contributing to their just treatment, building trust and creating of value would make management activity more worthy of people’s commitment (Collins,2003).

More so, commentators such as Freeman, argue that businesses should also benefit other stakeholders. Stakeholders are people and groups with whom the business has a relationship. This includes shareholders but extends out to include employees, their families, the community within which the business operates, customers, and suppliers.

Hence business and ethics are not contradictory. Businesses can act ethically because good ethical behavior is the best long-term strategy. Business involves reputation and relationships, unethically behavior usually backfires in the long term. If a business takes advantage of its employees, customers, and suppliers will often find a way to retaliate. ( Beauchamp, 2014).

It is required as a main factor in making business in the long run and therefore bears the following benefits of good ethics in an organization;

Business ethics offer companies a competitive advantage.

Consumers learn to trust ethical brands and remain loyal to them, even during difficult periods. For example in 1982, Johnson & Johnson spent over a hundred million dollars recalling Tylenol, its best-selling product, after someone tampered with bottles of the painkiller. The company followed its credo, a set of ethical organizational values, and the result was a boost in consumer confidence, despite the contamination scare. Hence society benefits from business ethics because ethical companies recognize their social responsibilities. ( Anderson, 2013).

Investor loyalty

Nowadays, investors are concerned about ethics, social responsibility, and the reputation of the company in which they invest. No one wants to associate themselves with a company that has unethical practices. Investors are very much aware that an ethical environment in an organization provides efficiency, productivity, and profits.

Attracting and retaining good employees

Talented individuals at all levels of an organization want to be compensated fairly for their work and dedication. People aspire to join organizations with high ethical values. Ethical organizations create a trustworthy environment, making employees willing to rely on it. Thus companies’ policies cultivate teamwork, promote productivity, and support employee growth.

Better for society

When a company cares about its behavior, impact, and environmental footprint, it is also better for society overall. For example, a print company might care about sourcing their materials sustainably and producing their products in an environmentally friendly way. This benefits the society. Being kinder to the environment ultimately benefits society because it means consumers can live in a world that is at its best rather than at its worst for suffering. It also means consumers can start to become more aware of business ethics and choose companies that uphold strong morals to help ethical practices continue. This boosts the benefits even more.

Reputation

This is a vital aassetof a company and it is also one of the most difficult tasks to rebuild once it is lost. Potential investors and shareholders are likely to be attracted to companies that adhere to their moral guidelines and promises they have made. This keeps the company’s share price high. Employees also feel comfortable and want to stay in the business for the long term when working with a company that has strong business ethics. This increases the productivity and reduces the labor turnover. When an employee does his work with integrity and honesty and by following the guidelines, it will eventually benefit the company.

Customer satisfaction

This is vital as it provides marketers and business and business owners with a metric that can use to manage and improve their businesses. The company should evoke trust and respect among customers for enduring success. This can only be achieved through good ethical practices.

Cultivate strong teamwork and productivity

Ongoing attention and dialogue regarding values in the workplace builds openness, integrity, and community. This is critical to building strong teams in the workplace. Employees feel a strong alignment between their values and those of the organization. They react with strong motivation and performance. Usually, an organization finds a surprising disparity between its preferred values and the values reflected by behaviors in the workplace.

It helps avoid criminal acts of omission and can lower fines

Ethics programs tend to detect ethical issues and violations early so they can be reported or addressed. In some cases, when an organization is aware of an actual or potential violation and does not report it to the appropriate authorities, this can be considered a criminal act. Business dealings with certain government agencies such as the defense department and the federal sentencing guidelines specify major penalties for various types of major ethics violations. However, the guidelines potentially lower fines if an organization has to make an effort to operate ethically.

Avoid legal problems

Business ethics prevents a company from being tempted to cut corners in pursuit of profits by not fully adhering to environmental regulations or labor laws or using defective materials and products. The penalties for being caught can have a great impact including legal fees and fines by governmental agencies. This leads to negative publicity which can damage the company’s image in the long run. Hence business ethics is vital.

In conclusion, when it comes to business, it is essential to understand that short-term success is not what will keep any business alive, instead, it is the long term that will determine whether a company or an organization deserves to keep on. Business ethics are a drive towards continuous achievement and success. This is shown in successful companies such as Nike, Dell, and Starbucks. Business involves reputation and relationships, unethical behavior usually backfires in the long run as it tarnishes the image of the business. Most people prefer justice and fairness, they are more likely to want to do business with a company that does good than one that does not. Hence, in the end, it is unethical behavior that becomes costly. Therefore “business ethics is not an oxymoron.”( Anderson, 2013).

References

1. Shaw, William. (2004). Business Ethics. Belmont, CA: Thomson- Wadsworth.
2. Beauchamp, T.2014. Case Studies in Business, society, and ethics, Pearson Prentice Hall, Upper Saddle River, New Jersey.
3. Collins, W(1994) .” Is business ethics an oxymoron”. Business Horizon.
4. Friedman, M.(1962). Capitalism and Freedom. Chicago: University of Chicago Press.
5. Friedman, M (1970). The sSocialResponsibility of Business is to Increase Its Profits’, The New York Times Magazine, September 13, pp.33,122-125
6. Anderson, E (2013). What happens when leaders only care about money? Forbes. Retrieved from http://time.com/3103856/10-scientific-steps-to-a-successful-career/
7. Lueck, S. (2008). After 12 year Quest, Domenici’s Mental-Health Bill Succeeds’, Wall Street Journal.
8. Maxwell, C (2003). There is no such thing as “Business” Ethics: There’s Only One Rule For Making Decisions. New York, NY: Warner Business Books.

Business Ethics Bribery Essay

As companies continue to expand across borders and the global marketplace becomes increasingly more accessible for small and large businesses alike there are ever more opportunities to work internationally (SOURCE). International and ethnically diverse teams are becoming more common, meaning businesses can benefit from an increasingly diverse knowledge base and new, insightful approaches to business challenges. Along with the benefits of insight, global organizations also face potential obstacles when it comes to culture and international business (SOURCE).

While there are several ways to define culture, the one used today is that it is a set of common and accepted norms shared by a society (SOURCE). But in an international business context, what is common and accepted for a professional from one country doesn’t always carry over to another colleague or business. Effective communication is essential to the success of any type of business, it is critical when there is a risk of your message getting lost in translation or obstructed by noise. Mastery of language is not what is the key to successful communication, it’s how you frame your message and that the meaning gets across which is important. Understanding the importance of subtle non-verbal communication between cultures can be equally crucial in international business. What might be obvious in your (business) culture could be strange or offensive to a foreign colleague or client. Do your research in advance of professional interactions with individuals from a different culture to ensure successful interactions. Being perceptive to body language helps. Approaching cultural differences with sensitivity, openness, and curiosity can help to put everyone at ease. Formality is a big consideration when dealing with colleagues and business partners from different countries. The concept of punctuality can also differ between cultures in an international business environment. Along with differences in etiquette come differences in attitude, particularly towards things like workplace confrontation, rules, and regulations, and assumed working hours.

Ethics

‘The field of ethics is a branch of philosophy that seeks to address questions about morality, about concepts such as good and bad, right and wrong, justice, and virtue (SOURCE).’ When the topic of business ethics comes up, most people focus on corruption and bribery. While this is a critical result of unethical behavior, the concept of business ethics and global business ethics is much broader. It impacts human resources, social responsibility, and the environment (SOURCE).

The role of ethics in management practices, particularly those practices involving human resources and employment differ between cultures. Local cultures might have a different view on the importance of age, race, gender, sexual preference, handicap, and so on. The Netherlands is an example where most of such information is asked for during the hiring process to ensure appropriate onboarding. In other cultures, such as the United States, it is not even allowed to put your height on your resume to prevent possible discrimination. Even when there are formal rules or laws against discrimination, they may not be enforced. Our modern understanding of business ethics notes that following culturally accepted norms is not always the ethical choice. What may be acceptable at certain points in history, such as racism or sexism, became unacceptable with the further development of society’s mindset (SOURCE).

Corporate social responsibility (CSR) is defined as: ‘The corporate conscience, citizenship, social performance, or sustainable responsible business, and is a form of corporate self-regulation integrated into a business model (SOURCE).’ CSR policy functions as a built-in, self-regulating mechanism whereby businesses monitor and ensure their active compliance with the spirit of the law, ethical standards, and international norms. Corporate social responsibility encompasses not only what companies do with their profits, but also how they make them. It goes beyond philanthropy and compliance and addresses how companies manage their economic, social, and environmental impacts.

Law

Another instrumental part of conducting global business is learning the different laws, tax codes, business regulations, and other standards in different countries can be challenging, it is said that compliance was the biggest challenge when expanding overseas. Foreign banks may also be hesitant to deal with the administrative burden of a foreign-based business (SOURCE). The best way to familiarize oneself with foreign laws and regulations is to bring an expert into the fold. Having this person involved in decisions regarding this foreign business can prevent problems and might even increase their profits (SOURCE).

Outsourcing

The next step after having sought out the knowledge needed regarding tax and other regulatory factors, could be to consider outsourcing. It’s generally true that it’s cheaper to rent a factory and its workers than to maintain them yourself. The availability of cheap overseas labor is one of the biggest advantages of outsourcing. Lower tariffs and duties, and local market access, can be added incentives to move production offshore (SOURCE). Outsourced labor, and especially overseas labor, often includes technically skilled, highly educated, and multilingual workers who are willing to work for less than labor that must be brought up to speed. The advantage of having support workers who can respond to your global customers in many languages is a significant asset (SOURCE). Your company may also enjoy a market advantage locally out of an appreciation for the jobs it provides.

Conducting your manufacturing overseas can also present difficulties. Although bribery is against the Common Law, in some countries it is part of doing business. Refusing to play the game may put your company at a disadvantage but participating in bribery creates substantial legal risk for your firm (SOURCE). Economic security is also generally less certain overseas. Crime, terrorism, corruption, and political instability can all turn out to be detrimental to the success of the enterprise. Countries can sometimes quickly and unexpectedly destabilize, as has happened in Venezuela in the past few years (SOURCE). Outsourcing your production, particularly overseas, usually means that you give up some of the daily control to your contractor.

Personal Reflection

All this knowledge gathered from this course has led me to a path of continuous learning. Since I have taken the course, I have continued to take steps to becoming a full-fledged global business leader. I have taken on more responsibility than ever and I believe that I have made steps in the right direction. An example would be that over the summer I worked for a fiduciary and financial service provider for global entities. This led me to engage in many different types of law, Dutch, Slovakian, and common law are some examples. On top of this, I have been a part of several Initial Public Offerings (IPOs) and have had to mediate between clients and federal institutions. The amount of money involved is something that I cannot disclose due to my non-disclosure agreement. But one thing I learned is after observing people interact with seven-figure amounts, they still manage to complain about the price of a gallon of milk. This might not seem like the most important life lesson, but it says a lot about the Dutch culture and the readiness to haggle even on the smallest amounts to maximize subjective profits.

Lastly what I have learned is that making mistakes is the best way to improve for me. I used to have quite the ego, it has taken me a long time to admit this. Having this ego had me believe that everything I did was correct and that any mishap that occurred was somebody else’s fault. Mistakes happen constantly, and the best thing to do with them is to own them, fix them, learn from them, and then move on.

References:

1. Gaspar, Julian E., Arreola-Risa, Antonio, Bierman, Leonard, Hise, Richard T., Kolari, James W.,
2. Smith, L. Murphy (2014). Introduction to Global Business: Understanding the International Environment and Global Business Functions (1st edition).     

Business and Community Ethics Essay

Business ethics is “the study of what constitutes right or wrong, good or bad human conduct in a business environment” (MacIntosh and O’Gorman, 2015, Pg 164). Our chosen company, Samsung, is a multinational company which means it’s essential that it has good business ethics, to avoid scandal or public outrage. Samsung strives to “recognize and analyze differences in laws, regulations, and practices in respective countries while conducting business lawfully and ethically.” (Samsung, 2018), this is essential for a multinational company as it operates in many countries across the globe, which will have different laws and views on ethical business behavior due to differences in society and social norms. However business ethics is more than just the internal decisions a company makes, but how the decisions they make affect society and the surrounding environment.

Corporate social responsibility is an aspect of business ethics, which involves integrating with communities and stakeholders voluntarily. “a firm needs to be seen as having a positive impact not only on its workers but also upon society as a whole.” (MacIntosh and O’Gorman, 2015, Pg 180) Samsung has multiple ways of doing this, by putting money into education, employment, and medical services for communities that may lack the resources, this benefits the community long term as education of the young people in the community will create more learning opportunities and prepare for “meaningful jobs and a better future” (Samsung 2018).

Samsung also takes action to ensure that they do not harm the environment, they have the slogan “Planet first”, and by 2020 Samsung aims to and are making efforts “to reduce greenhouse gases, to make eco-friendly products with minimum environmental impact, to reuse waste material and waste products to help build a circular economy, and our efforts to reach out to local communities.” (Samsung, 2018). This shows that Samsung is limiting the damage they’re doing and also aiding the development of the environment through its proposed reusing of waste material, this will stop the waste material from entering and disrupting or destroying ecosystems. Samsung is one of the biggest global employers, they employ around three hundred thousand people worldwide. The strive for the company to make a profit is fuelled by the prospects for expansion and growth of the company but also “economic stability and subsequent development of a nation” (MacIntosh and O’Gorman, 2015) so Samsung makes the ethical business decision to keep creating profit and operating in many countries as they create jobs and revenue for the countries in which Samsung carries out business or has business interests if they were to stop creating profit then this would cause a large number of jobs losses and hurt society, as well as the business failing to produce sufficient funds to continue to run as a multinational corporation. This is a form of corporate social responsibility. Samsung has encountered some ethical problems. As they were “caught paying people to write and give a false, negative comment on their competitor’s product.

The issue arose in April 2013 and was done by one of the branches of the company in Taiwan.” (Awie Bin Tomani et al, 2016). This is seen as an ethical issue, as the business that these reviews were left on, HTC, could have suffered repercussions due to these reviews, such as a drop in demand for their product and therefore a fall in revenue, this is ethically wrong as customers of the product haven’t made these comments and future potential buyers would be put off buying HTC and may turn to the competitor Samsung, as they would have wanted. This action would cause long-term negative consequences for the stakeholders of HTC, this is why the action can be classified as unethical. Samsung has also been accused of “exploiting young workers” (Charles Arthur, 2012) the claims include physical and verbal abuse as well as overworking. It was also found that “safety measures, such as providing protective clothing for workers, were not followed.” (Charles Arthur, 2012) this proves that the treatment of the workers was unethical as it put the employees of Samsung at risk of harm, due to cost-cutting or ignorance. As employees are stakeholders in the business they put trust in the business, and this unethical behavior is a breach of this trust. 

Essay on Code of Ethics for Business

Discovers what a code of business ethics is and its role in an organization.

A code of business ethics is a written document specifying expected employee-manager behavior conduct in the organization. A code of ethics sets out the ethical principles and best practices of an organization to uphold fairness, dignity, and professionalism. Violating the code of ethics will result in punishments, including termination, for members of an organization.

A code of business ethics is important in an organization because all strategy formulation, implementation, and evaluation decisions have ethical ramifications. The aim of the code of business ethics of the organization is to prevent corruption encourage fair and ethical conduct, among other things, and ensure that the company’s business is done in a consistently lawful and ethical way to the maximum degree possible.

To ensure that everyone in the company is clear about the company’s mission, values, and guiding principles, a code of ethics is important for companies to establish. From a regulatory and law-enforcement standpoint, it provides staff with a framework of which rules exist and how to act in the gray areas of value-based ethics that are not always clear. It shows that the code of business ethics plays an important role in an organization that brings toward the goals.

Other than that, the role of the code of business ethics may include seven principles of admirable business ethics. The first is to be trustworthy whereby no person or organization wants to do business with an individual that they do not trust. Secondly, being open-minded involves continually asking all internal and external stakeholders for ‘ethics-related feedback’.

Thirdly, honor all commitments and obligations, which can bring the employee to become more responsible in doing their work. Fourthly, do not misrepresent, exaggerate, or mislead with any print materials because it may lead to copyright problems in the business. Fifthly, be visibly a responsible community citizen as it shows our culture in the country to other businesses. Sixthly, utilize accounting practices to identify and eliminate questionable activities. Finally, follow the motto of do unto others as you would have them do unto you so that people can respect each other and follow business ethics.

Shows how organizations can create an ethical culture.

Establishing a consistent code of business ethics is a key element in creating an ethical culture in organizations. Such unethical practices that concern every field of online commerce are internet fraud, hacking into business machines, spreading viruses, and identity theft. On the other hand, periodic ethics workshops are required to raise awareness of working environments under which ethics problems should occur to ensure that the code of ethics is read, recognized, believed, and remembered. So that employees will know about the ethics and apply it in their workplace.

As well as ethics training programs can be carried out to create an ethics culture. These training sessions are aimed at improving the code of ethics of the organization, clarifying what activities are and are not acceptable, and resolving future ethical dilemmas. It should include messages from the CEO or owner of the business emphasizing ethical business practices, the development and discussion of codes of ethics, and procedures for discussing and reporting unethical behavior.

Besides that, whistle-blowing also is one of the ethical cultures that can be applied in the organization. Whistle-blowing refers to policies that require employees to report any unethical violations they discover or see in the firm. Whistleblowing is an effective and legitimate way of trying to monitor companies’ future immoral actions, and also helping to create a sense of accountability and transparency. To continue their often situation of reducing organizational misconduct, society must sustain a sense of support and motivation for whistleblowers. It should be practiced by employees and organizations should have procedures that enable whistle-blowing as this activity can prevent corruption in the organization.

What I Learned in Business Ethics Class Essay

Every day I make decisions as part of my regular life. From the article by Eddy S. Ng & Ronald J. Burke, I understand that I make three types of decisions every day. They may be based on personal values, collective issues, or leadership reasons. As a business student aiming to make ethical decisions, I can make leadership decisions. If I never compromise my ethics, many things can be controlled. My ethical decisions will help sustain society, while unethical decisions may benefit organizations by generating extra profits. The main question that arises here is how can I know the way of ethics. Can I learn business ethics from any of my courses, or is it a natural thing? Here, two groups of people give two types of arguments: one supports that it can be taught in college, while another group is against it (Ritter, B.A., 2006). After going through the article, I think it can be adopted by blending both perspectives. After receiving training, at least I can understand what is ethical and what is unethical. Gender discrimination is a world-burning issue that I can change easily by changing some of my views. I can fully understand this after learning about sustainable business. Moreover, if we take this to heart, at least more than one manager will emerge who can make a change for the organization shortly by making ethical decisions. Always making ethical decisions is a challenge for me as well.

When I read the book ‘Meeting the Ethical Challenges of Leadership: Casting Light or Shadow’ by Johnson, I found that it will also be a challenge for me. In that book, ethics is defined as ‘judgments about whether human behavior is right or wrong,’ and leadership is defined as ‘the exercise of influence in a group context’ (Johnson, C.E., 2017). When I take charge of any organization, my decisions will be a blend of these concepts. I know it will be challenging, but someone has to take the first step. Organizations may not support my decisions, but if I can provide them with a clear understanding of sustainable business, resistance may be minimized.

After that, I can move forward with bigger issues. In the 21st century, we are demolishing everything to fulfill our demands. It’s time to raise some voices. It is a rough road ahead, but if I make ethical decisions by exerting pressure from the bottom ladder in my leadership, I think it will have a significant effect on the organization.

Now it’s time to discuss how to adopt this. We know that leaders are important keys in the choice of social policies and programs adopted and executed by organizations (Ng, E.S. and Burke, R.J., 2010). I think it is not an inborn characteristic. Everyone is a leader of his own. I need to first understand moral awareness and the difference between good and bad. At least after reading Barbara A. Ritter, I can say that if this is included in the curriculum, there might be a significant change in society. As an example, I am learning from this course. When I make decisions for the company shortly, I will think twice if that conflicts with my ethics. I must blow the whistle if any unethical activity occurs. It may cost me my promotion or the company profit, but I will not compromise. So leadership can be practiced in the curriculum to foster ethical decisions in organizations.

Now, let’s discuss ethics. I think it can also be taught in the curriculum. So when I make any decisions, at least I can understand the impact of that decision on society. Sometimes decisions can be biased because of pressure from higher-ups. If the CEO asks me to do anything, I might not consider whether it is ethical or not. If I have the practice to say no to unethical things, I can blow the whistle, which can prevent the world from unethical practices. This will have an impact on organizations. I firmly believe that if anyone knows anything unethical, they will think twice before engaging in it. This second thought will change society. So my ethical decisions will have an impact on organizations.

I believe business ethics can be taught and practiced in our everyday lives. If it is possible, then there must be an impact on the organization. After completing the last two weeks, we all know that sustainable business is profitable for the organization. So why should I make unethical decisions for short-term profits? From last week, I am now aware of most of the unethical issues of the 21st century. Now I have to think about how to prevent them with my leadership and ethical capabilities. As per Sachs, in today’s world, the poor are struggling to find food, safe water, health care, and shelter, so they need mere survival (Sachs, J.D., 2015). To make a few profits and make CEOs happy, I cannot make unethical decisions that will affect those people.

I make decisions every day, and I agree sometimes they may be unethical. I have to say I was unaware of various issues. They may cause problems for society as well. In today’s situation, scenarios are changing. I am trying to avoid plastics, reading about gender discrimination, trying to save natural energy, etc. I think it will also make a difference in organizations where I may play a role as a manager. Transformational leadership is more effective now for sustainable business (Ng, E.S. and Burke, R.J., 2010). So it can be easily said that our decisions will affect the organization, whether ethically or unethically. At least from now on, I will not compromise on my ethics. I practiced this leadership from my curriculum as well as ethics.

In conclusion, I want to say that every day we are making decisions to move forward with time. I or anyone else may not always be thinking of ethics. This affects society and also the organization. So why make unethical decisions or be in a dilemma about ethics? Ethical behavior must be practiced regularly so that it becomes a natural human trait. One more thing I have to say is that I must blow the whistle if any unethical practices are going on. My decisions count in the organization. They may be small, but someday they may cause more significant changes. The world is being destroyed every day, so if we do not make a sustainable plan, then shortly, there will be nothing left to discuss. Organizations like IKEA, Walmart, Nestle, Walt Disney & Nike are talking about sustainable business. So I think my decisions will foster ethical decision-making in organizations.

References:

1. Ng, E.S. and Burke, R.J., 2010. Predictors of business students’ attitudes toward sustainable business practices. Journal of Business Ethics, 95(4), pp.603-615.
2. Ritter, B.A., 2006. Can business ethics be trained? A study of the ethical decision-making process in business students. Journal of Business Ethics, 68(2), pp.153-164.
3. Johnson, C.E., 2017. Meeting the ethical challenges of leadership: Casting light or shadow. Sage Publications.
4. Sachs, Jeffrey D. (2015) The Age of Sustainable Development. (e-book), New York: Columbia University Press. Chapters 1-14.

Value System Essay on Business Ethics

In light of the recent uproar over the concept of business ethics, corporations often find themselves faced with the tricky task of balancing business interests and the expectation to meet ethical standards. In this paper, we will look at business ethics and decision-making. I will particularly consider two approaches to business ethics analyse the case study about both approaches and then motivate for my preferred approach. The two approaches to business ethics that I will look at are Utilitarianism and the Human Rights approach.

As a starting point, I first answer the question of what is business ethics and make a case for ethics in business. Ethics is defined as a “system or set of moral principles that influence an individual to make choices based on his or her various motives and the resultant ends of those choices” (Masten, 2012, pg. 4). Business ethics is then “the application of ethical values to business behavior” (Business Ethics and Human Rights, 26 July 2012). The concept of business ethics affects most if not all facets of business and contributes greatly to the decision-making process of business (Leśna-Wierszołowicz, 2012). It also holds that there are many approaches to ethics (in our case, business ethics) and this has a great impact on decisions made having given due regard to ethics. As noted earlier, I will look at what impact utilitarianism and human rights will each have on the outcome of the corporation in answering the question of whether or not the corporation retains the now disabled employee despite budget constraints and strategic objectives of the business.

Utilitarianism is a theory that holds that the morality of an action is dependent on the outcome or goodness of that outcome (Gamland, 2012). The theory can be traced back to the works of Plato and Aristotle. (Eggleston, 2012). It only developed as a theory that can be said to be both freestanding as well as defined in the eighteenth century and some of the early writers involved in development include Hume and Mill (Eggleston, 2012). The theory is commonly known as “the ends justify the means” theory with the classic case of a runway trolley running towards a group of tied-up persons and the only way to save them is by sacrificing one person. In this case, retaining in choosing whether or not to fire her, lay her off with compensation, or find a way to retain her would be resolved by giving preference to the option that will benefit mankind the most (Gamland, 2012). According to this theory, actions will never have an existing and permanent moral value (Gamland, 2012), the value is determined by the facts about “the maximization of overall well-being, which is closely related to happiness” (Eggleston, 2012, pg. 452).

The fundamental principle of utilitarianism is the principle of utility which has it that for an act to pass the test of ethics, it must yield the best overall result about usefulness or the welfare of all persons affected by the act in question. (Gamland, 2012).

Characteristics of utilitarianism are thus often along the lines of consequentialism which translates to that the outcome of an act affects if that act falls within the ambit of rightness or not; welfarism which qualifies one act as being higher than its alternative if that one act will amount to the happiness of a greater number of people; individualism which holds that the value will only hold if a being capable of feelings is affected; aggregation which is concerned with summing up all values of the persons affected; and maximization which qualifies an act as good only if it makes a greater number of people happier. (Eggleston, 2012). Therefore, applied to the facts at hand, the secretary will only be retained if the way found for retaining her would lead to a maximized state of happiness, not only for her but for all other stakeholders of the entity. Put in the alternative, she would need to be fired if it means that her losing her job will maximize the state of happiness or welfare of the business (the stakeholders as they are sentient beings).

I now move on to consider the second approach in question: The human rights approach. Human rights are rights held by individuals which are matters of significant importance and are undeniable (Brenkert, 2016). There are generally three approaches to human rights: Relativist which holds that rights are culturally based (Brenkert, 2016, 279), which takes a stand that rights are to be understood in a strict sense as basic moral rights (Brenkert, 2016, 280), and the expansive view which has it that rights are “things we might strive to realize for people for which we may necessarily be condemned or punished if we fail to achieve them (Brenkert, 2016, 281).

How human rights play a role in ethics, particularly business ethics can be explained as follows: there has been a move away from the traditional view that human rights are the responsibility of the state only. This can be attributed to the “developments in size, power, speed, and extent of business activities” (Brenkert, 2016, 271). Furthermore, businesses have come to realize their power and ability to impact stakeholders in their various forms. (Brenkert, 2016). Another factor is the questions relating to human rights that have arisen as a result of globalization (Brenkert, 2016), putting pressure on businesses to think and deliberate on the role and place of human rights in decision-making.

As such the modern view is that “businesses are morally responsible for human rights” as they “have a moral agency that is sufficiently appropriate to sustain moral responsibilities” (Brenkert, 2016, 288). This means the fact that they also have a significant impact on all their stakeholders including workers puts up a strong case for the moral obligation placed on them, to not only promote human rights but to also play an active role in their promotion. (Brenkert, 2016). Businesses, more often than not find themselves faced with risks stemming from commercial practices. One of the risks is the “moral risk associated” with these. Finally, it has been accepted that it is “part of a corporation’s general duty to exercise social responsibility” (Brenkert, 2016, 289).

As not above, human rights are undeniable. Therefore the fact that a business or the community in general has little to no regard for human rights does not mean that a right has been or can be waived by the holder (Brenkert, 2016). Businesses should therefore consider it only ethical to respect and uphold the rights of its stakeholders. “Doing business ethically necessarily involves respecting human rights in the course of business operations” (Business Ethics and Human Rights, 26 July 2012). Some of the rights that must be taken into account in our case are whether letting the employee go would not amount to a violation of her constitutional rights to dignity and not to be subjected to unfair discrimination on grounds of disability. Business also needs to consider if it would be ethical and be a display of respect for the international right to employment if they do not make means to retain her.

I now move on to the final aspect of this paper: to state my preferred approach and furnish reasons for that. My preferred approach is the utilitarian approach. I justifying this I start by offering criticism for the human rights alternative. The approach is too partial and considers the interests of only one person. All stakeholders have financial interests to be considered and protected and yet when we look at this approach we only look at the person and matter at hand. There is no regard for business strategic objectives. In this case, if retaining the employee is what will amount to ethical business conduct then that is the course to be followed. The fact that the business will suffer financially, which in the long run may affect more employees, customers, and shareholders, is ignored.

But with the utilitarian approach the business itself as well as other people involved. Retaining the employee at extra cost to the business would make the employee happy but happiness would be maximized by a guarantee that the budget will be kept to, the financial security of the company will not be compromised and whatever plans were already made for the already tight budget will be met.

It would therefore be very ethical to let the employee go with compensation. When it comes to business decisions her happiness cannot take priority over that of the whole organisation. It is important to note that the maximized happiness or welfare we are looking at here is not that of the organization as a juristic entity but of all its natural stakeholders that would be affected if the entity fails to meet its financial objectives or has to change its plans due to unforeseen changes in the budget. The result of happier stakeholders justifies disregard of loyalty and personal circumstances of one person. (1500 words)

References

1. BrenkerT, G. (2016). Business Ethics and Human Rights: An Overview. Retrieved from https://www.cambridge.org/core/journals/business-and-human-rights-journal/article/business-ethics-and-human-rights-an-overview/4E12322863D6BA2B17871B03EDA9BBB9
2. Business Ethics and Human Rights (2016). Retrieved from http://www.ibe.org.uk/userassets/briefings/ibe_briefing_26_business_ethics_and_human_rights.pdf
3. Eggleston, B. (2012). Retrieved from http://www.benegg.net/publications/Eggleston_Utilitarianism.pdf
4. Garland, E. (2012). Ethics Spring 102. Presentation, University of Bergen.
5. Leśna-Wierszołowicz, E. (2012). Retrieved from http://agro.icm.edu.pl/agro/element/bwmeta1.element.agro-77c1382c-2474-4016-9765-9437a33f69a8/c/Lesna_Wierszolowicz.pdf
6. Masten, K. (2012). Organizational Ethics in Accounting: A Comparison of Utilitarianism and Christian Deontological Principles. Retrieved from https://digitalcommons.liberty.edu/honors/276/