Business Ethics

This kind of activity is sometimes called “political CSR,” since it is a kind of CSR that produces a political outcome (Scherer & Palazzo 2011). Instead of influencing political outcomes, corporations bring them about almost single-handedly. Prominent examples include the Forest Stewardship Council , the Roundtable on Sustainable Palm Oil , and the Extractive Industries Transparency Initiative (Scherer & Palazzo 2011). Critics have charged that MSIs, while effective in producing dialog among stakeholders, are ineffective at holding firms to account (Hussain & Moriarty 2018; Moog, Spicer, & Böhm 2015). We might begin by asking why corporations should be allowed to engage in political activity at all. In a democratic society, freedom of expression is both a right and a value .

Since history shows that neither regulated nor unregulated firms always behave ethically, neither regime offers an ethical panacea. The concept of began in the 1960s as corporations became more aware of a rising consumer-based society that showed concerns regarding the environment, social causes, and corporate responsibility. The increased focus on “social issues” was a hallmark of the decade. They argue that businesses should assume no other responsibilities, other than to produce goods and services efficiently and to maximise profits for the shareholders. They believe that business being economic entities, only economic values should be their guiding principles and the sole determinant of their performances. The ethics of human resource management covers those ethical issues arising around the employer-employee relationship, such as the rights and duties owed between employer and employee.

In simplified models of the market, individual buyers and sellers are “price-takers”, not “price-makers”. That is, the prices of goods and services are set by the aggregate forces of supply and demand; no individual buys or sells a good for anything other than the market price. As the world continues to grow more political – and more politically correct – an increased focus on proper business ethics and strong adherence to them become ever more the norm. While the idea of business ethics came into existence along with the creation of the first companies or organizations, what is most often referred to by the term is its recent history since the early 1970s. However, it might be considered a grey area – close to, but not quite, bribery – because the individual is then likely to be more inclined to give Company A a price break at the expense of getting the best deal for his own company.

For instance, if a company partakes in unethical practices, such as poor customer privacy procedures and protections, it could result in a data breach. This, in turn, may lead to a significant loss of customers, erosion of trust, less competitive hires, and share price declines. Here are a few examples of business ethics at work as corporations attempt to balance marketing and social responsibility. For example, Company XYZ sells cereals with all-natural ingredients. The marketing department wants to use the all-natural ingredients as a selling point, but it must temper enthusiasm for the product versus the laws that govern labeling practices.

Thus, the consequences of an action are measured in terms of the pleasure and pain caused to different individuals. Bentham suggested a procedure called hedonistic calculus for this purpose. The term ‘teleological’ is derived from the Greek word ‘telos’ which means an end. According to teleological theories the Tightness of an action is determined solely by its consequences rather than by any feature of the action itself.

] to identify the company’s expectations of workers and to offer guidance on handling some of the more common ethical problems that might arise in the course of doing business. ] that having such a policy will lead to greater ethical awareness, consistency in application, and the avoidance of ethical disasters. Scholars in business and management have paid much attention to the ethical issues in the different forms of relationships between organizations such as buyer-supplier relationships, networks, alliances, or joint ventures. Drawing in particular on Transaction Cost Theory and Agency Theory, they note the risk of opportunistic and unethical practices between partners through, for instance, shirking, poaching, and other deceitful behaviors.

The implementation of commitments should be based on honesty and responsiveness. refers to basic guidelines to study and analyse a sense of right and wrong and goodness and badness of our tasks. To make an ethical programme, a successful monitoring programme needs to be developed. Monitoring can be done by keen observation by ethics officer, surveys and supporting systems.

For instance, John Locke justified property rights saying that God had made “the earth, and all inferior creatures, common to all men”. Unionized workplaces may confront union busting and strike breaking and face the ethical implications of work rules that advantage some workers over others. Employers must consider workplace safety, which may involve modifying the workplace, or providing appropriate training or hazard disclosure. This differentiates on the location and type of work that is taking place and can need to comply with the standards to protect employees and non-employees under workplace safety. Aristotle said, “the end and purpose of the polis is the good life”. Adam Smith characterized the good life in terms of material goods and intellectual and moral excellences of character.

– It is needful that businessmen should try to make non-cooperation or discourage the evils, misconduct and unethical behaviour not only with different customers but with society also. In business activities, most ethical questions could be of two types – Overt and Covert. Overt ethical problems like bribery, theft, sabotage, collusion, etc. are clear for everyone to see and are generally considered reprehensible.

Since all subsystems within the society are interlinked and interdependent, so also are business and morality interlinked. Dramatically opposite to the Unitarian View, classical economists like Adam Smith and Milton Friedman asserted that the only goal of business should be profit maximisation; and that ethics and morality plays no part in business conduct. For example, you believe that an organisation should promote people on the basis of merit and not on seniority. However, the organisation does the opposite thing, you tend to feel disappointed and totally out of place. Your attitude and behaviour towards the organisation perhaps would be very optimistic if your values match with organization’s promotion policies.