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There are novo educations. One should teach us how to make a living and the other how to live”. -John T. Adams Introduction Business is part of human society and as old as human civilization. It is part of the complex web of interaction among institutions and people; its activities must be viewed and examined from the perspective of morality. Business without ethics threatens the survival of human society. Business is an activity that is part and parcel Of human society.
The fundamental reason for examining the activities of business from the moral perspective is for the promotion of the common good, protection of the individual’s interests, and the preservation of the human society in general. Without ethics, business will be a chaotic human activity because there will be no common understanding about what is right and wrong conduct. What is Business? Businesses a complex activity that involves major activities like production, manufacturing, advertising selling and the like. Businessmen also deal with suppliers, customers, employees and even competitors.
Within this structure of interaction of people that a lot of questionable practices occur ?? false advertising, misbranding, local price-cutting, misrepresentation and others. Somehow people’s rights are being violated and the interest of the common good is disregarded. Business is a good human activity – it is the wrong motive and personal interests of unprincipled businessmen that make business bad. The Importance of Ethics in Business The study of Ethics paves the Way for common ground in our understanding of the fundamental idea of what is good and bad in our human conduct.
Without Ethics, people, esp.. Businessmen will set their own moral standards, rules and principles. This would result to a kind of subjective morality in which case what is good for one may be bad for another and vice versa. Example, cheating the customers may be acceptable for some but bad for others, abortion may be correct for one but evil for another customer. Ethics a science does not only evaluate the morality of our human conduct but also provides a common understanding of the universal, objective and irreversible moral principles that govern our human conduct and guide our moral prince piles.
The study of Business Ethics will prepare and equip managers for a more effective way of managing people and organizations. Businessman’s Myths about Business Ethics Business certainly is a good human activity. However it is the business leader’s wrong perception of the role of ethics in the Business that affect their decisions, and in some cases, forget to be Ethical. Myth#l: Ethics is a Personal Affair and not a Public Debatable Matter Some Businessmen claim that Ethics is a Private issue and not a public matter. If Ethics is a subjective thing then it will make morality very personal ND relative.
Therefore, what is good for one person may be bad for another person. If morality is subjective, people will make their own moral laws and principles. The individual’s moral values may be very subjective but in the exercise of this value system, he must also consider the impact and gravity of his actions on others. Thus, Ethics is not a personal affair but a Public Debatable Matter. Myth#2: Ethics and Business do not Mix Some businessman claim that ethics has no place at all in business. To claim the business in an activity which is independent of morality is again, a horologists view of the relationship between ethics and business.
Since business is part of human society and its activities operate within the structure of beliefs and value system of people, it must also be viewed and examined from the prospective of ethics. Further, the belief that Ethics does not mix with business will only justify illegal activities and will most likely promote questionable practices in business activities. Myth#3: Ethics in Business is Relative. Taken to the view that Ethics is a private and subjective matter is the claim that morality depends on cultural and religious orientations Of people.
This implies further that what may be considered right action in one country may be unacceptable in another country. The truth of the matter is, there are universal moral principles that people share and agree upon regardless of religious orientations, cultures, and value systems. And so, all peoples around the world believe that murder is always wrong, that stealing is always unacceptable. The study of ethics paves the way for our common understanding of the fundamental ideas of right and wrong as reflected in our human nature and our human conduct. Myth#4: Good Business Means Good Ethics.
Some businessmen claim that good business means good ethics. This certainly is a myth. A business may be profitable but the means of acquiring profits may be questionable. The study of Ethics in Business encourages businessmen and managers to look closely into the end and the means of doing business. Profit minimization is a good end in Business but the means of getting those profits must also be examined. Myth#5: Business is a War. Some business leaders and businessmen believe that business is a war. Because of this belief, businessmen often resort to using predatory tactics to story the competitors in order to emerge as the market leader.
Business is a good human activity. And as an integral part of the society, it must promote healthy competition and not destroy competitors. Relationship between Ethics and Business Ethics provides us with a clear distinction between morality and legality. Laws are insufficient. Ethics is the unwritten law, written in the hearts of men. In the absence of the law, Ethics dictates the correct conduct to follow. The trend today is to train managers to maximize profits and to quantify the operations of business. They must also be prepared to respond to complex situations bearing ethical consequences.
Trucker simply reminds us that a business corporation is not just created to make profits but to consider its moral an social obligations to the stakeholders. Moral Reasoning in Business Moral reasoning is a process in which ethical issues and problems are benchmark against a moral standard so that a moral judgment is made possible. Responsibility of Managers Since managers are tasked to solve problems in the organization and its activities, it is also the responsibility of managers to help in the resolution, if to, prevention Of moral problems in business activities and the enterprise.
Characteristics of a Good Moral Standard 1 . A good moral standard is one that looks at the issue as something very serious, e. G. , murder, graft and corruption, stealing. 2. A good standard must be grounded on good moral argument. A good argument is an argument that always tells the truth. A solid moral argument leaves no room for loopholes and counterarguments. 3. A good standard should be objective and not subjective. It should be universally accepted and should apply to all. What is good for one person should be at the same time good for everybody. A good standard, when violated, brings about feelings of guilt, shame, and remorse of conscience. Characteristics of a Good Moral Judgment 1 . A good moral judgment must be logical. This means, that the decisions maker must arrive at an informed resolution of the issue based on logical reasoning. 2. A good moral judgment must be based on facts and solid evidence. The information used in the process of moral reasoning must not come from weak sources like, hearsay, rumors and grapevine. 3. A good moral judgment must be based on sound and defensible moral principles.
A sake ethical principle is open to a lot of criticisms. The Morality of Profit-Motive 1 . Why people go into business? People go into business for a numbers Of reasons like, personal satisfaction, to earn a livelihood,to serve the society through the goods and services they offer to the customers,and the most dominant motive why people go into business is to make a profit. 2. How do businessmen viewed profit through their eyes? Businessmen consider profit as a form of anticipated reward or a compensation for the efforts they spend, skills they apply, and returns for the capital they invested in organizing the business. The Morality of Profit-Motive – Reasons why people go into business: Personal Satisfaction To earn a livelihood To serve the society through the goods and services they offer To make profit (most common reason) Businessmen consider Profit as a form of anticipated reward or a compensation for the efforts they spend, skill they apply, and returns for the capital they invested in organizing the business. Milton Friedman – ” only responsibility of business is to make profit so long as it Stays within the rules of the game, which is to say, engage in open and free competition without exception or fraud. Peter Trucker- disagrees with this view by saying, that the “enterprise is an organ of the society and therefore, it’s actions and decisions have a great impact on society and people. ” Factors that a businessman must consider in doing business: Customer satisfaction Fair treatment of the employees Respect for the environment 6. 1 The assumptions of Profit-Motive Profit-motive in business is an ethical issue. Since business is an integral part Of society, its activities, including profit-making, must be examined from the perspective of morality.
It operates within the two important aspects of our human conduct: Freedom- implies that businessmen have the right to decide on the amount of profit they want to earn in the process of selling goods and services to customers Structure of business- a guideline that governs business activities including profit-making. The ultimate criterion of gauging the success or failure of business is profit. 6. 2 The Good and Bad Sides of Profit-Motive: A. The Good side of Profit- Motive: 1. Motivates people to do something meaningful. 2. Promotes ingenuity and cleverness in running a business. 3. Makes people productive.