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A world full of lawlessness governed by greed and disrespect. Where anything goes and nothing has value. This would be our world without ethics. It is said that “true character is defined by what you do when no one is looking. ” Ethics is grounded in values and virtue and how we translate into our lives determines our behavior and our ethical beliefs shape our world. Ethical principles evolve over time and change with our focUS the ethical concepts we struggle with today become our laws in the uture.
Any discussion regarding business ethics should begin will the definition of ethics. The dictionary defines ethics as “that branch of philosophy dealing with values relating to human conduct, with respect to the rightness and wrongness of certain actions and to the goodness and badness of the motives and ends of such actions. ” (Ethics. (n. d. ). ) The theory of ethics has been discussed by philosophers for thousands of years and many consider it to be the “science of conduct”. (D. Gebler) This science asks about the reasoning behind our ethical beliefs.
There are both informal and formal methods of ethical reasoning. Informal reasoning is based on upbringing fear of punishment and promise of rewards that can dictate our behavior. Beyond the informal methods of ethical reasoning comes the formal methods which include Virtue ethics, Teleology and Deontology. Virtue ethics came about through the writings of Aristotle and is found in his Nichomachean Ethics written in 350 B. C. The premise for his writing is that individuals only become virtuous by living virtuous lives and he identified characteristics which dictate virtuousness.
They are courage, temperance, iberality, magnificence, pride, calmness, friendliness, wittiness, shame, justice, courage and honor. (Bixby, Beck-Dudley) Within this reasoning justice is considered the most important virtue and is defined as being of basically two types. Distributive and commutative. These issues deal with what is fair and equitable both in regard to the individual (commutative) and the distribution of goods and services (distributive). This philosophical theory concedes that the “good life” can be decided upon by the community. A sense of community does not play a part in the other formal theories of ethical easoning.
Teleological philosophies which include egoism and utilitarianism consider not only the particular act but the consequences of those acts as well. Egoism is simply the theory of self-interest. A person will act according to what is best for him and these actions will be decided with contemplation of the best results which will lead to an enlightened realization of ones full potential. (Bixby, Beck-Dudley) Utilitarianism on the other hand consists of the theory that the morally correct course of action results in the greatest good for the greatest number.
Virtue is determined by utility. Other theories Of ethical reasoning which insist that consequences Of an act should not be considered when determining the ethical nature of an act only the act itself are deontological theories. They include both Universalization and Judeo-Christian Principles. Universalization which was founded by Immanual Kant states that all humans have responsibilities and they must act upon these responsibilities regardless of the consequences. Furthermore these responsibilities are determined by universal law which means they are applicable to everyone.
The other deontological theory is based on Judeo- Christian Principles. It is based on biblical doctrine set forth in the Ten Commandments. This theory is prevalent in the United States and is based in the religious heritage of most of its citizens. The central concept behind this theory is that people are morally obligated to take care others. The golden rule to treat others as you would like to be treated falls within this theory. (Bixby, Beck-Dudley) Business Ethics is tied to both societal and personal ethics. Dictionary . om defines business ethics as “the study and examination of moral and social responsibility in relation to business practices and decision-making in thics) It is coming to know what it right or wrong in the workplace and doing what’s right this is in regard to effects of products/services and in relationships with stakeholders. Attention to business ethics is critical during times of fundamental change. It is important when leaders and managers are struggling in times of crises and confusion, they retain a strong moral compass.
Business ethics calls for add ressing social problems such as poverty, crime, environmental protection, equal rights, public health and improving education (D. Gebler). Much debate and controversy has arisen ver the responsibility of business. Some agree with the argument set forth by economist Milton Friedman (1 912-2006) that states that “The Social Responsibility of Business to increase its Profit”. This theory states that the only moral obligation of a business is to its stockholders. Bixby, Beck-Dudley)l question as to how that moral obligation can be met without consideration for all entities involved with the business? There are two theories that relate to the method by which business social responsibility and duties may be accessed. The first is stakeholder theory which states that businesses should ct ethically and honestly to encompass the entire network of business relationships. The concept of stakeholders is defined in our textbook as “groups or individuals who can affect or are affected by the actions of a business. (Bixby, Beck-Dudley) Therefore stakeholder theory dictates that businesses be concerned with additional factors beyond profits and consider political, competitive and economic factors as well as social and ethical duties. Half the states have adopted statutes set forth in the Corporate Constituency Statutes which encompass stakeholder theory. Closely related to this theory s the social contract theory which is based on the premise that a firm has three duties to improve the welfare of employees and consumers, to lessen shortcomings Of industrialization and to operate within the confines of the principles of justice and human rights. Bixby, Beck-Dudley) Many corporations have developed a social conscience and as a result Corporate Social Responsibility was born. The main principles of Corporate Social Responsibility state that a corporation has responsibilities to planet, people and profits. (D. Gebler) Within these principles a corporation monitors and nsures its active compliance with the spirit of the law, ethical standards and international norms. So far we have discussed the definition of ethics and business ethics as well as the basis of ethical reasoning but how do ethics relate to the law? Dictionary. om defines the law as “the principles and regulations established in a community by some authority and applicable to its people, whether in the form of legislation or of custom and policies recognized and enforced by judicial decision. ” (law. (n. d. ). ) Most of the principles and regulations enacted by law are based in principle upon ethics. Common law is based on the premise of what our society believes is right and just. Contract law is based on the premise that people should keep their word and uphold commitments. Criminal law is based on premise that actions should be moral and not cause harm to society or others.
Tort and negligence law is based on the premise that compensation should be given for careless actions that injure another. Our textbook describes law as the “floor below which society will tolerate certain conduct” and I think that accurately portrays the relationship between law and ethics. (Bixby, Beck-Dudley) In addition law is hat standardizes ethical concepts since ethical conduct will vary from person to person and culture to culture. Business ethical issues are defined by the times. Todays ethical dilemmas and social consciousness will be tomorroWs laws.
Ethical issues change with times and technology. Historical ethical dilemmas and societal response to them are the premise for most of our current laws regarding corporate responsibility. In the 1 960,s and 1970’s we saw the shift from small businesses to large corporations which brought on labor disputes and concerns over employee safety this resulted in the unsafe practice and value ovement in response laws protecting the safety of workers and regulations governing labor disputes were enacted. Businesses responded by the introduction of a Code of Conduct for its employees.
Environmental concerns first began to emerge and in 1970 the Environmental Protection Agency was formed. (J Hart) In 1980’s and 1990’s the public frustration with corporate conduct and the lack of enforcement brought on federal sentencing guidelines in 1986 the public determined that stiffer penalties would reduce corporate crime. In 1990 the controversy over sweatshops resurfaced in the Kathy Lee Gifford candal and the Fair Labor Standards Act was passed. In 1 993 the Ere-X Canadian Miners scandal brought concerns about false claims in advertising and advertising law was born.
In response to the growing concern regarding corporate ethics educational programs began to arise and corporation ethical officers were established. (J Hart) The twenty first century brought with it ecommerce and the internet ethical concerns regarding privacy and proper use of personal information have resulted in laws regarding the proper handling of sensitive information and confidential clauses in most companies today. The Corporate scandals of 2001 – 2004 rocked the financial world and drove our economy into the worst depression in history, Scandals like Enron, Arthur Anderson, and World Corn lead to the Sarbanes-Oxley Act in 2002.
This act established a new federal agency which regulates accounting firms which audit public companies. The ethical scandals of recent years have led to legislation regarding the protection of whistleblowers who aid in the discovery of fraudulent practices. (Bixby, Beck-Dudley) It has been said that experience is the best teacher our experiences over thical dilemmas have proven that as a society we must hold true to ethical concepts both in our personal conduct and business conduct.
We have seen the devastation that results from the unethical conduct and have suffered human, financial and emotional lose at the hands of greedy unethical Corporate Executives We must become vigilant in the pursuit of accountability and corporate social responsibility. In conclusion when faced with ethical situations that offer us solutions that maybe legal but borderline on unethical we must remember to act in a way that upholds our ethical principles. These principles are integrity, honesty, loyalty, fairness, law abiding, leadership, morality and accountability and respect for one another.