Maintaining Ethical Standards in Business

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Table of Contents

Introduction
Ethical behavior in business
Overview of ethical business behavior
Benefits
Enforcing ethical behavior
Recommendations
Conclusion
References

Introduction

Ethical behavior in business has remained a major subject of discussion in almost every business environment and company boardroom. Many company managers and businessmen invest heavily in programs that are aimed at instilling and nurturing reputable business behavior to augment good business performance, image and winning the loyalty of customers.

Despite these efforts, cases of unethical behavior are frequently reported in countless companies around the world (Ronald, 1992). For instance, former chairman of NASDAQ, Bernie Madoff was arrested in Namibia for unethical conduct. Hewlett Packard, a respected company in the world found Patricia Dunn to be the mastermind of several unethical scandals in the company.

The list for companies that have had to suspend managers and employers for unethical behavior is endless and grows daily. In every direction we face in the business world, we encounter an array of ethical scandals affecting companies, individuals and businesses.

Is it possible to maintain ethical behavior? Maintaining ethical standards is possible and crucial for every business through corporate efforts and holistic management approach. This research paper critically analyses ethical behavior in business, how it can be realized and nurtured among other issues commonly discussed in the context of the topic.

Ethical behavior in business

The concept of ethics is well described with reference to philosophical approach of thinking and defining human behavior and how we make decisions based on what we believe and accept to be morally right. Although such decisions may be made independently, they may have far-reaching impact on individuals or the entire group of people involved.

Importantly, decisions in business are not only governed by rules and regulations but also by ethical practices that may have been nurtured for years by an organization or business (Boatright, 2009). This is usually aimed at promoting fairness and equity in ensuring that business activities are carried out within the confines of moral standards.

In defining business ethics, many analysts concur that they are usually professional regulations adopted and observed by a company or business organization and play a major role in decision-making especially during management crises.

Business ethics therefore refer to general aspects that define business conduct and are essential in shaping the behavior of not only individual employees but also the entire business organization (Boatright, 2009). Additionally, business ethics is associated by both descriptive and normative dimensions.

The field is commonly referred to as normative due to its core role in career specialization. On other hand, business ethics are well understood by academicians form a descriptive point of view.

Overview of ethical business behavior

In appreciating the role of ethical business behavior, it is imperative to underscore the fact that these moral standards may vary from one organization to another and from period to period. This to say that ethical issues being faced by one company may not be similar to those being experienced by another.

Nevertheless, the common issues experienced may have certain similarities in terms of how they are handled by people in-charge. By the fact that the history of business dates back several centuries, it can further be argued that ethical issues in business have a deep and wide history (Boatright, 2009).

This is because business is governed by morals and standards that ensure pinnacle performance and competitiveness in any performance context. Business was common during colonialism, slavery and Cold War. This implies that it is an issue that has continuously haunted business owners and organizations around the world.

By the fact that business ethics encompasses the entire behavior that a company or organization adheres to, there is no doubt that attaining these standards is quite important in any form of business management.

This ethical behavior further shapes the interaction between businesses and the world through service delivery (Ronald, 1992). On the other hand, ethical behavior may define the interplay between a company and its individual customers.

Notably, the reputation of any business solely depends on the way it upholds business ethics for the interests of the parties involved and the world at large. While most businesses are highly driven by the desire to make money through profit maximization and practicing of pure capitalism, good conduct cannot be traded for anything if good business reputation is to be maintained (Lattal & Clark, 2006).

On this note, it is important to reiterate that making money out of business is not wrong. In fact, it is regarded as the number one reason that prompts most people to establish businesses. Whist this is the case, the manner in which some businesses are conducted is what triggers the question of ethical business behavior and the need of maintaining it.

By failing to observe some of these ethical regulations, countless companies continue being fined as a way of augmenting business morality. However, some companies and business owners may get blinded by the amount of money earned from a business, thus compromising the need to adhere to ethical business conduct (Lattal & Clark, 2006).

A major question that arises in discussing the concept of ethical business behavior is its purpose especially in cases where a company is performing best while being involved in unethical conduct. Regardless of the billions of dollars collected in form of profit by a company, ethical consideration is extremely essential especially in winning the loyalty and trust of customers (Trevino & Nelson, 2010).

Even though there are several companies which do not observe required ethical standards, others have risen to become known countrywide and around the world for their outstanding ethical behavior and performance. Whether in small or large-scale, the clearest idea is the fact that good business behavior is paramount across the board.

Although companies suffer most due to fines imposed when ethical conduct is undermined, customers too are at the risk of being exploited and manipulated by scrupulous business owners that have no idea of the need for ethical business conduct.

In attempts to comply with Business ethics, many companies have strived to attain this status even though the number has steadily decreased with increase in business competiveness (Trevino & Nelson, 2010).

Benefits

Among other factors why ethical business behavior is essential are financial returns and performance. When critically compared, it is evident that companies which maintain moral standards perform far better than those that do not appreciate these regulations.

In this respect, most companies give priority to their customers since they are principal drivers of any given business in the world. This implies that no single business owner would prefer amassing profit in form of a short-time achievement at the expense of losing loyal customers (Boatright, 2009).

As mentioned above, ethical behavior has immense significance in determining the company image and reputation to the world and its customers. This is equally important in developing trust with suppliers and business associates.

By developing strong supplier-business relationship, one is able to allow the existence of a successful business environment (Ferrell & Fraedrich, 2012). In this case, suppliers would remain loyal and trustworthy by supplying customer with their needs promptly.

As mentioned before, ethical issues affect both managers and employees of any given business. As a result, entrepreneurs act as role models to other workers by setting performance and behavioral standards.

If an entrepreneur’s behavior is characterized by unfulfilled promises, bribery and dishonesty, then there is no doubt that these attributes would significantly impact on the performance of employees and bring down an organization (Ferrell & Fraedrich, 2012). It therefore follows that business entrepreneurs set pace in terms of adherence to business ethics during their daily management duties.

With regard to this, ethical behavior and standards also affect the relationship between an organization and the surrounding community. Under any circumstances, the society would expect a company or business to operate in the most acceptable and ethical manner. This has far-reaching impact especially in cementing a positive public image (Boatright, 2009).

As a result, the business’ code of conduct will either attract or repel customers depending on its reception by the general public. It is possible to hurt a business by not telling the employees the truth but rather focusing on what you consider palatable by the workforce.

Based on innumerable benefits of ethical behavior, it is important for every business to erect strategies that would promote moral standards. How can this be achieved? The following segments expound on how to realize ethical behavior that would ensure sustainable competitive advantage in an ever-changing business world.

Enforcing ethical behavior

For many years, it has been proved that ethical behavior can be realized and nurtured in any business setup around the world. However, the main challenge remains the approach of inculcating these standards in a society that is clouded with the spirit of unethical conduct and scandals.

One of the common ways of realizing ethical behavior is the development, adoption and implementation of a code of ethics to address ethical issues that may arise in business (Christopher, 2004). Through this approach, a company ensures that employees cannot lean on ignorance as a form of defense to engage in malpractices and propagate unethical behavior.

Together with this, it has to be the responsibility of the corporate management to let the expectations of the company be known to the employees. This allows concerned parties to adjust in accordance with stipulated behavioral expectations.

Being a good listener also allows employees to share out their thoughts regarding good conduct and attainment of reputable moral standards as a company or business (Christopher, 2004). By accommodating diverse views, managers and stakeholders involved can realize equilibrium and set standards for the company or organization.

As role models mangers have no option but to positively influence the behavior of employees on a daily basis. This is possible through consistent actions over a period of time. A team leader who does not have a straight forward conduct is likely to impact his or her juniors negatively (Christopher, 2004).

What impression would be generated by a human resource manager who accepts bribes before promoting certain employees or reports to work any time? Through their good conduct, it is possible to effectively influence the behavior and moral adherence of the entire business. Besides this, the general working atmosphere of employees matter a lot. This has to be characterized by equality and non-harassment.

Equality would imply that every person is treated professionally without favor or discrimination (Boatright, 2009). As a result, employees within the organization would be willing to exploit their talents and abilities without intimidation.

Similarly, harassment belittles employees and may resort to rebellion and misconduct in order to neutralize the unacceptable behavior from the management. In this regard, it is paramount for a business to establish a code of ethics that can easily be followed by everybody without feeling burdened or exploited.

Does the government of any state have the audacity to promote ethical behavior in business? Due to increasing corporate scandals in the world today, several governments have enacted legislations aimed at instilling morality in business. For instance, the US Federal government adopted a law that requires all public corporations to have a corporate code of ethics (Eliot, 2005).

It is worth noting that even though the Sarbanes-Oxley Act of 2002 does not qualify the elimination of unethical behavior in business, it offers insights on how to deal with unbecoming conduct among employees or any other person involved in scandalous practices. To promote these efforts, the government imposes a lower charge on compliant companies whose employees may be found engaging in unethical behavior.

Recommendations

Although it is possible to achieve ethical businesses behavior, it has to be underlined that the process is not easy. Many businesses collapse because of being vague and general in handling ethical issues (Eliot, 2005). To realize ethical standards in any business, developed codes of conduct must deviate from the normal general format and address specific issues affecting an organization.

However, these codes must not be prescriptive in a manner that allows noncompliance resulting from literal interpretation (Boatright, 2009). Of great significance is the role played by an organization’s top management.

Among other duties, managers are responsible of establishing an organizational culture that sets pace for ethical standards which are passed to other employees of the company. Executive officers and other top officials have to always remain role models regardless of the prevailing ethical conditions.

Additionally, a business can only realize ethical behavior if its developed policies, standards and rules are fully integrated into its overall control system. In other words, employees can remain ethical without maintaining the standards of an organization.

To curb this, companies are required to periodically review their codes and make necessary adjustments depending on existing demands and changes in the business world (Boatright, 2009). This approach eliminates the likelihood of upholding outdated ethical practices in business.

Public awareness among employees is also essential to allow the entire business community to understand the role of ethical behavior in business. By so doing, all employees would easily appreciate ethics and put them into practice.

Conclusion

Based on the above synthesis, it is evident that ethics are essential in any business setup. From winning customer loyalty to promoting a positive public image, business ethics are core and irreplaceable (George, 1993). Regardless of the business, these regulations are quite essential in setting tone for moral and professional performance among employees.

Additionally, it is worth noting that any business can become a victim of unethical behavior. As a result, all necessary measures like trainings, nurturing of an ethical culture and adherence to federal legislations have to be considered. Above all, maintaining ethical standards is possible and crucial for every business through corporate efforts and holistic management approach.

References

Boatright, J. (2009). Ethics and the conduct of business. Upper Saddle River, NJ: Prentice Hall.

Christopher, M. (2004). Institutional Culture and Individual Behavior: Creating an Ethical Environment. Science & Engineering Ethics, 10 (2), 269-276.

Eliot, S. (2005). Business Ethics Regulation. Vital Speeches of the Day, 71(10), 298-304.

Ferrell, O., & Fraedrich, J. (2012). Business Ethics: Ethical Decision Making & Cases. Stamford, Connecticut, U.S: Cengage Learning.

George, S. (1993). Business and law respondents: What is ethical behavior? Journal of Education for Business, 68(6), 348.

Lattal, A., & Clark, R. (2006). A good day’s work: sustaining ethical behavior and business success. New York City, U.S: McGraw-Hill Professional.

Ronald, S. (1992). The Challenge of Ethical Behavior in Organizations. Journal of Business Ethics, 11(7). 1.

Trevino, L., & Nelson, K. (2010). Managing Business Ethics. Hoboken, New Jersey: John Wiley and Sons.

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