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Ethics is concerned with what is right or wrong, good or bad, fair or unfair, responsible or irresponsible, obligatory or permissible, praiseworthy or blameworthy. It is associated with guilt, shame, indignation, resentment, empathy, compassion, and care. It is interested in character as well as conduct. It addresses matters of public policy as well as more personal matters. (http://www. Ninetieths. Erg/Education) In business ethics is applied and practiced in all levels however the level where the practice is approached is various, in today’s business environment ethics has become a core nominative advantage that big companies are promoting to overtake each other’s by presenting a quality ethical environment. “Business Ethics” can be defined as the critical, structured examination of how people & institutions should behave in the world Of commerce.
In particular, it involves examining appropriate constraints on the pursuit of self-interest, or (for firms) profits, when the actions of individuals or firms affects others. (http:// www. Bushiness’s. Ca/definitions/business-ethics. HTML) BENEFITS OF ETHICS FOR BUSINESS One of the main benefits for a business of behaving ethically is that a better mage is given to the world at large, and especially to consumers, resulting in greater profit. It also means that expensive and potentially embarrassing public relation disasters are avoided.
As far as employees are concerned, if the business is seen to behave ethically, for example with regard to the environment, it will recruit more highly qualified employees, and this leads to better employee motivation as the employees are proud Of their jobs. PROBLEMS OF ETHICS FOR BUSINESS Being ethical can increase costs for the business, e. G. They have to pay reasonable wages to all employees. If a business is truly putting its ethics into practice it will have to pass on the same standards down the supply chain and this will mean no longer doing business with suppliers who are not prepared to meet the same standards.
Ethics theories There are two main types of theories that linking ethics and morality Some ethical theories are teleological – what is right or wrong depends on the end or outcome of an action – for utilitarian, pleasure, happiness or ‘the greatest good’; for Aristotle, ‘Dominance’. Other theories are deontological – doing what is right means doing your duty or following the rules – for Kant, the dictatorial imperative; in Natural Law, the secondary precepts. It is easy to think of teleological theories as relativist and deontological theories as absolutist, but it is not that simple.
Apart from Kantian Ethics (thoroughly absolutist and deontological) and Situation Ethics (clearly relativist and teleological). Absolutist ethical theories Kantian ethics Kant believed that morality, in all spheres of human life, including business, should be grounded in reason. His Categorical Imperative held that people should act only according to maxims that they would be willing to see become universal norms and that people should never be treated as a means to an end. Cant’s theory implies the necessity of trust, adherence to rules, and keeping promises (e. . Contracts). Kant argued that the highest good was the good will – the importance of acting from duty, so, for example, if a merchant is honest in order to gain a good reputation, then these acts of honesty are not genuinely moral. Cant’s ethics are ethics of duty rather than consequence: a business behaving morally in order to impress consumers is not truly moral according to Kant. Cant’s ethical theory applies well to both employees and consumers as it does not permit people to be treated as means to an end – even if that end is profit.
Kantian ethics would also see a business as a moral community – employers and employees, stakeholders and shareholders, standing in a moral relationship with each other which would influence the way they treat each other. This seems to require that the work that employees are given is meaningful, and that businesses should be organized more democratically. Natural Law Natural Law is often described as deontological because, in practice, it leads to a set of rules that people have a duty to follow.
These rules are absolutist, because they know of no exception. For example, using contraception to prevent conception is absolutely wrong, regardless of consequences such as the spread of AIDS, unwanted pregnancies etc. However, Aquinas’ Natural Law Theory says we should try to fulfill our God-given purpose. This is teleological, as it is interested in our design or ‘end’. The primary precepts – worshipping God, living in an ordered society, reproducing etc. – are teleological: they are the ends to which all our actions should aim.
The primary precepts are also absolutist – Aquinas believed we were all made by God with a shared human purpose. Moral relativism Situation Ethics This must not be confused with cultural relativism. Cultural relativism is a very weak moral theory that says things are right and wrong relative to our culture. The theory is easily refuted. Situation Ethics says that what is right and wrong is relative to the situation. In other words, if you asked “Is it wrong to abort a fetus? ” would ask ‘Under what circumstances? Clearly the outcome of my actions is of central importance here. Rules may be useful, but you may need to ignore the rules in order to do the right (loving) thing – the hind that is in the best interests of the people affected. Theories that can be either Absolutist or relativist Utilitarianism- Virtue iv vwvvuwvvbUtilitarianism considers the majority affected by a certain action – general welfare is important, and this is often seen as good business policy: the general good of the organization is more important than that of individuals.
So, for example, an employee, though qualified for a certain position, will have to give way to another so that the interest of the business as a whole can be preserved. A farmer may have to give up some of his land or a dam project, because it will provide irrigation for lots of farmers and generate electricity for the whole community. However, the best business transactions are the ones in which the best result is achieved, when Business and consumer, employer and employee, shareholders and stakeholders are considered and benefited.
This means that when making business decisions all alternatives need considering – no one can just act on intuition if they wish to maximize utility. Economically Utilitarianism would seem to be a good ethical approach to business; however, in many cases it is not simple and clear cut. For example, closing a polluting factory may be good for the environment, but not for the local community who may need the jobs. Whatever the business does it is going to upset one group of people or another. Utilitarianism does not always help here.
Virtue Ethics Virtue Ethics from Aristotle shows that business cannot be separated from society – everyone is part of the larger community, the polis’, the corporation, the neighborhood, the city, the country or the world and our virtues are defined by that larger community. Business is part of that community. Virtue ethics focuses on the character and motivation of the agent and on the gent’s ability to pursue demoniac. Virtue is also learnt through observation of others’ behavior – as far as business is concerned an individual cannot be ethical in a vacuum, but always as part of the ethical community.
This applies to the employers as well as the employees who must show the virtues Of character such as honesty, prudence, fairness and courage. The virtues of co- operation seem to triumph over competition, but does this mean that the virtuous person in business will be the good corporate citizen rather than the high-flier, wheeler-dealer or the entrepreneurial innovator? Virtue Ethics is interested in the most general traits that make a harmonious society possible, so the traits that make for good business must be the same as those of a good society; the virtues of a successful businessman and those of a good citizen must also be the same.
In business, as in society, trustworthiness and co-operation are essential; even the most devious business dealings presuppose an atmosphere of trust, and competition is only possible (as in sport) within a context of general co-operation. Business is an essential part of society, not separate from it, and, as in society, living together is central, asking a profit is just a means. The previous theories have approached Ethics differently to introduce ethics in three words Actions with Morale Motivation that always interact with people, society and environment.
This has led the government to produce acts to protect the ethical approach in the Business framework such as employment acts; equality acts; environmental protection acts; advertising and promotion acts and more; Also ethics have implied businesses with different organization such as Human Rights, the Office of Fair Trade and media which created pressure points when the operate locally and internationally , thus businesses have been pushed to act ethically in every operation not only that but it became a competitive advantage to create and attract new stakeholder to the business such as producing a statement of a social responsibility and list of duties toward society, environment and employments. CARS cooperate social responsibility Definition: CARS definition as “the obligations of business to pursue those policies, to make those decisions or to follow those lines of action which are desirable in terms of the objectives and values of our society. ” (Bowen, 1953).
This is code Of responsibility which states the purpose of the CARS in business as the obligation in which raise the awareness towards objectives and values of our societies to ensure decisions are made to maintain the relation between communities and business policies. A CARS statement: ‘ Our biggest challenge this century is to take an idea that seems abstractedness’s developmental turn it into a reality for all the world’s peoples. Kopi Anna, former UN Secretary General One of humankind’s greatest challenges this century will be to ensure sustainable, just and balanced development. The needs of current and future enervation cannot be met unless there is respect for natural systems and international standards protecting core social and environmental values.
In this context, it is increasingly recognized that the role of the business sector is critical. As a part of society, it is in business interest to contribute to addressing common problems. Strategically speaking, business can only flourish when the communities and ecosystems in which they operate are healthy’ In developing nations: Definition A country that is poor, and has a mainly agricultural economy but has a desire to advance both socially and economically. Another term is “Third World”. Some examples of developing countries include Honduras, Guatemala, Egypt and Benign. (http://BMW. Investigators. Com/definition/developing- country. HTML) Those nations has been suffering from corruption, unfair human acts, abuse and all sort of unethical behavior that has stopped them from development despite the fact that they may have more resources and treasures than any developed country such as Diamond in Sierra-Leon and Monuments in Egypt, those countries had corrupted regimes that opened the doors for unfair business practices and bad working conditions but those actions are customers for any companies which likes to go global but the argue would can they act ethically globally as well as they do locally?! That creates the challenge for any business to not to fail in entrapment that ethics and morality may create.
We have seen many unethical businesses that are still running and exist so that agencies has researched top 10 unethical businesses which include Iranian, total oil, Marlboro and Freeport-Anchorman whom have been highlighted for different ethical behaviors, two related examples of business in developing nations are: Example 1 Freeport- Anchorman The cooper and gold company has been accused on infringing upon the land of West Pans and oppressing their rights. In 1998, a lawsuit was brought against the company accusing Freeport of human rights abuses in West Papua. These abuses included; house arrest, death threats, psychological harassment and surveillance monitoring by the security forces who Were employed by Freeport. The lawsuits failed because the district court ruled the alleged abuses were not a violation of the ‘law of nations’.
The unethical companies mining procedures still continue today, unopposed by laws and officials. Example 2 Total The unethical French oil and gas corporation, Total has a large oil pipeline in Manner, built by slave labor. The Burma KICK Campaign has criticized the company for playing a crucial role in funding the Burmese military junta. The junta receive between $200 million to 5450 million a year from the oil whilst the people of Burma receive nothing but aggravation. The profit made from the pipeline has been spent on funding the juntas military with 10 MIS jets being purchased from Russia. Security forces employed to protect the pipeline have been known to commit horrific human rights abuses.
The oral’s most unethical companies have been compiled by Swiss research company Covalent in their 201 0 annual review of multinational corporations (http://www. Confrontational. Com/#/top-l O-unethical- companies/4545796858) In the other side there are many companies which has a strong ethical approaches globally as well as nationally such as Prime Mark, Catbird, Marriott International and Avoidance Group will be analyzing the ethical performance in a developing country and my example will be based on Egypt. Avoidance Egypt has shown an exemplary track-record in CARS initiatives aimed at benefiting local communities in Egypt. As detailed on its Face-book page, “Avoidance’s investments in Egypt are an evident reflection of its commitment to civic involvement for a stronger market foothold”.
Indeed, CARS has been integral to the company’s corporate development and competitive advantage, with an estimated expenditure to support social investment estimated at approximately $23 million (LEE 140 million). It contributes to various social initiatives in the domain of health, education, and emergency relief, and won the award for ‘Best CARS Contribution’ at the 2009 Telecoms World Awards Middle East, for its community development ND Tell-Medicine Project at Asia Oasis, implemented in cooperation with the UNDO and MIMIC Trust Fund. In addition Avoidance Egypt Foundation, a separate legal entity, actively participates in emergency relief and works closely with marginalia communities in Egypt.
It was registered in 2003 as a corporate donor in The Egyptian Ministry of Social Solidarity, and receives 0. 02% of Avoidance’s earnings pre-taxation, relying additionally on contributions from the Avoidance Foundation in London. Avoidance Group LTD, the majority shareholder of Avoidance Egypt emphasizes that “it does not insider sustainability as a philanthropic gesture or add-on. It is part of our core business [and] mirrors the way we manage our business”. Whilst its CARS initiatives undoubtedly show it has engaged actively in promoting and contributing to societal needs at a variety of levels, it has also strongly partaken in creating ‘shared value’, not with the community, but with the government.
In itself, it is important to remember that a corporation is not a moral gatekeeper; its primary role is to maximize its profits, and develop a value-chain which generates economic value top-down through its core equines activities and strategic mission. It would be unfair to berate without context the fact that Avoidance, like many international companies, actively work in partnerships with governments. In reality, it is often such partnerships which can lead to important reforms, and intensify positive industry clusters.