The Role of “Ethics” in Tomorrow’s Society by Abia Bassey Edet Abstract Ethics pervades business decision making in all spheres of production, finance, marketing and distribution, and customer relations. The operational challenge is therefore the extent to which business decision-makers incorporate ethical standards openly into their business strategy, business management processes, and the creation of an environment in which ethical codes are practiced by “commission” as opposed to such codes being violated by “omission”.
Companies today live in a pressure of expectations, personal and organizational, and often financial. At the same time it is clear that there are persistent concerns about corporate ethics that raise important questions about whether there is a sufficient commitment to ethical decision-making and, frequently, a cynicism that there is not. This article explores ways to strengthen and assure a high standard of ethical conduct, and the role of leaders in making this happen. . In this paper, we are exploring ethics beyond compliance programs, ethics training, codes of conduct, values statements, and company policy.
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I will use these as important contributors to an ethical environment, but my focus is the likely role of “ethics” in tomorrow’s society from a business perspective and the everyday life of the organization where our values rub up against reality. INTRODUCTION TO BUSINESS ETHICS Business ethics (also known as corporate ethics) is a form of applied ethics or professional ethics that examines ethical principles and moral or ethical problems that arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and business organizations as a whole.
Applied ethics is a field of ethics that deals with ethical questions in many fields such as medical, technical, legal and business ethics. Business ethics can be both a normative and a descriptive discipline. As a corporate practice and a career specialization, the field is primarily normative. In academia descriptive approaches are also taken. The range and quantity of business ethical issues reflects the degree to which business is perceived to be at odds with non-economic social values. Historically, interest in business ethics accelerated dramatically during the 1980s and 1990s, both within major corporations and within academia.
For example, today most major corporate websites lay emphasis on commitment to promoting non-economic social values under a variety of headings (e. g. ethics codes, social responsibility charters). In some cases, corporations have redefined their core values in the light of business ethical considerations. Ethics Some years ago, sociologist Raymond Baumhart asked business people; “What does ethics mean to you? ” Among their replies were the following : “Ethics has to do with what my feelings tell me is right or wrong. ” “Ethics has to do with my religious beliefs. ” “Being ethical is doing what the law requires. “Ethics consists of the standards of behavior our society accepts. ” “I don’t know what the word means. ” These replies might be typical of our own. The meaning of “ethics” is hard to pin down, and the views many people have about ethics are shaky. Like Baumhart’s first respondent, many people tend to equate ethics with their feelings. But being ethical is clearly not a matter of following one’s feelings. A person following his or her feelings may recoil from doing what is right. In fact, feelings frequently deviate from what is ethical. One should not identify ethics with religion.
Most religions, of course, advocate high ethical standards. Yet if ethics were confined to religion, then ethics would apply only to religious people. But ethics applies as much to the behavior of the atheist as to that of the saint. Religion can set high ethical standards and can provide intense motivations for ethical behavior. Ethics, however, cannot be confined to religion nor is it the same as religion. Being ethical is also not the same as following the law. The law often incorporates ethical standards to which most citizens subscribe. But laws, like feelings, can deviate from what is ethical.
Our own pre-Civil War slavery laws and the old apartheid laws of present-day South Africa are grotesquely obvious examples of laws that deviate from what is ethical. More so, being ethical is not the same as doing “whatever society accepts. ” In any society, most people accept standards that are, in fact, ethical. But standards of behavior in society can deviate from what is ethical. An entire society can become ethically corrupt. Nazi Germany is a good example of a morally corrupt society. Moreover, if being ethical were doing “whatever society accepts,” then to find out what is ethical, one would have to find out what society accepts.
To decide what I should think about abortion, for example, I would have to take a survey of American society and then conform my beliefs to whatever society accepts. But no one ever tries to decide an ethical issue by doing a survey. Further, the lack of social consensus on many issues makes it impossible to equate ethics with whatever society accepts. Some people accept abortion but many others do not. If being ethical were doing whatever society accepts, one would have to find an agreement on issues which does not, in fact, exist.
Discussion on ethics in business is necessary because business can become unethical, and there are plenty of evidences as in today on unethical corporate practices. Even Adam Smith opined that ‘People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices ’ Business does not operate in a vacuum. By virtue of existing in the social and natural environment, business is duty bound to be accountable to the natural and social environment in which it survives . What is ethics?
Ethics is two things. First, ethics refers to well-founded standards of right and wrong that prescribe what humans ought to do, usually in terms of rights, obligations, benefits to society, fairness, or specific virtues . Ethics, for example, refers to those standards that impose the reasonable obligations to refrain from rape, stealing, murder, assault, slander, and fraud. Ethical standards also include those that enjoin virtues of honesty, compassion, and loyalty. And, ethical standards include standards relating to rights, such as the right to life, the right to freedom from injury, and the right to privacy.
Such standards are adequate standards of ethics because they are supported by consistent and well-founded reasons. Secondly, ethics refers to the study and development of one’s ethical standards. As mentioned above, feelings, laws, and social norms can deviate from what is ethical. So it is necessary to constantly examine one’s standards to ensure that they are reasonable and well-founded. Ethics also means, then, the continuous effort of studying our own moral beliefs and our moral conduct, and striving to ensure that we, and the institutions we help to shape, live up to standards that are reasonable and solidly-based.
From my understanding, Ethics is about doing the right things, and in business this means doing the right business in the right way. An ongoing discourse on ethics in business decision-making is necessary because business is prone to going unethical. For example, in the early days of industrialization, Adam Smith(1723-1790), the Scottish moral philosopher and one of the forefathers of modern economics, expressed his concern that ‘People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices .
These days we refer to this practice as collusion or price-fixing! But unethical behaviour in the 21st century is much broader than a simple “…contrivance to raise prices”! From the localized world ofAdam Smith, the ever-advancing civilization has moved us to an integrated global economy with growing complexity and rising moral trade-offs. The birth of the so-called “global village” has brought with it a complex web of ethical challenges emanating from not only moral domain but also with origins in the diversity of cultures, religious and social practices.
Ethics beyond Compliance and Codes The very term ethics is open to many interpretations, which is in itself a problem if an organization doesn’t have its own clear, shared understanding of what it means for itself . For the purpose of paper, ethics is a system of moral principles and the methods for applying them, and in my view, moral principles are the values formally adopted by the organization to promote ethical practices and activities. Here is a sampling of some of these everyday issues and dilemmas: A company is seeking a large contract with a governmental organization and is asked to make a donation to a political campaign while the selection process is under way. The connection to the selection process is vague but nevertheless sensed. Nothing illegal is being asked and no company policy exists to guide action; ? A salesperson in order to win a contract over-promises on the benefits the customer will realize. Those providing the product are now faced with confronting this performance gap and having the company contradict itself before the client; A partner in one part of a consulting firm charged with providing impartial advice is incentivized and expected to recommend a service of another part of their firm to a client, but knows that a competitor provides a superior service that will better serve the client; ? A leader suspects that a long time colleague, good friend, and valued member of the organization is cheating on their expense reports; an offence for which a junior member of the organization would be terminated without hesitation. Point to Note in the Role of Ethics in Decision-Making
There is no universally accepted standard for organizational ethics beyond the limited world of legality and regulation. Meaningful action rests therefore in the hands of the leadership of individual organizations. What meaningful action should that leadership take? The following are strong foundation for clarifying and strengthening the role of ethics in decision-making: ? Make the role of ethics in decision-making a regular part of leadership discussions using current, real-life ethical dilemmas to continually clarify what everyday ethical conduct is expected throughout the organization; Understand the nature of unethical acts; ? Implement processes and structures that support an environment of open communication within the organization at all levels to surface and to resolve ethical dilemmas; ? Act with equal decisiveness when senior staff breaches the ethical standards of the organization as when other staff does so. Personal Integrity There are deep personal factors at play in the arena of ethical conduct and it is important to acknowledge them.
Most of us have been at times driven by a perceived need for self-preservation, leading us to act in ways that may offend our own sense of personal integrity but which we judge necessary to save our jobs, to take care of our family, to get the rewards we have earned by our efforts, and so on. Indeed, some reward systems play on this need for self-preservation by making it clear that if you do not achieve your organizational objectives you will not remain with the organization. Most of us have an instinctive feeling about whether an action might be wrong, meaning a violation of the organization’s values or our personal values.
We might literally have a gut feeling. An issue may continue to play on our minds, unresolved. We might have trouble sleeping or be short tempered. We can pay attention to these visceral signals and raise the issue at hand, or we can suppress them because to face the questions they pose is too uncomfortable for us. If you value your personal integrity, and surely most of us do, and the decisions being made at work contradict that integrity then, no matter how well-justified you may be in staying, being a good soldier, and not speaking up, consider in the long view the price to your vitality and well-being in taking that route.
Just as organizational ethics can be eroded, so too can our sense of personal integrity, bit by bit over time. The possibility – and regrettably without certainty of an immediate positive outcome – is that by speaking up you will give voice to something on the minds of many that needs to be discussed in the organization. Consider that your voice may be more influential than you think. Each of has to make our own decision about this, and we do so, often unconsciously, every day. Proven Approaches to Instill Ethical Leadership
Any person who knows what is truly right will automatically do it, according to Socrates. While he correlated knowledge with virtue, he similarly equated virtue with happiness. The truly wise man will know what is right, do what is good, and therefore be happy . An effective compliance training program that incorporates an introduction to business ethics as part of its curriculum takes the following key actions to build an organization that values ethics in business: ? Demonstrate the unequivocal importance of an introduction to business ethics from the top levels of management; Make the completion of an introduction to business ethics essential to career advancement; ? Publicly reward ethical behavior. Publicly punish lapses; and ? Require that everyone at the company completes an introduction to business ethics training program. CASE STUDIES Case One: Student Choices – What Will Sex Mean? The Ethics Center is developing a set of cases that raise everyday dilemmas for college students. Cases are based on real-life experiences reported by American college students. In this story, written up by student worker Rebecca Fox-Bivona, a freshman considers whether to remain a virgin:
Katherine entered college with a very high standard for herself regarding sex. She is proud of her choice to remain a virgin until marriage. Now she has met the most amazing guy during the fall term of her freshman year. Max, her boyfriend, believes physical affection and even sex are important ways of showing how much two people care for each other. He has pressed Katherine to express their growing romance sexually, but so far she has said no. Should Katherine revise her beliefs about sex because someone she respects and wants to have a deep relationship with believes differently?
His views are probably the mainstream views among their friends, she realizes. Should Max keep pressing her for sex? Is his bringing it up often a legitimate part of his wanting to express his love for her? Or do his frequent suggestions show a lack of respect for her beliefs? Case Two: The Case for Ethical Leadership Recent global corporate scandals have done long-lasting damage to the reputations of some of our most important civic institutions and businesses. Key constituents ??? employees, investors, and community members ??? no longer trust or respect many institutions as much as they once did.
Meanwhile, increased transparency and connectivity have enabled greater access to previously private information. The way to thrive in this era of increased public scrutiny is to put an introduction to business ethics training at the core of how corporations conduct business, and by tangibly demonstrating they have nothing to hide. LRN believes that “doing what’s right” represents a sustainable way to create competitive advantage. The path to operationalizing ethical capitalism requires formalizing an introduction to business ethics, grounded in a code of ethics, not just at the top, but throughout the organization.
Over time, ethical leadership fosters and sustains enduring corporate cultures that self-govern around corporate values and set forth a code of conduct that meets the highest standards. Case Three: Serving Two Masters – Should a councilmember bring a request before the council on behalf of an organization to which she belongs? When an elected official takes on a fiduciary responsibility for a community organization, such as the Little League, there are several pitfalls to avoid. First, it is important to avoid any appearance that fundraising activities are tied to the power of position of the public servant.
Secondly, it should not be assumed that the policy-making authority of the individual would “come in handy” when the organization has a petition before the city council. In this case, Councilmember Moray is responsible for providing complete and accurate financial information, and should not only recuse herself from the discussion at the Little League board level, but also should not discuss or vote on the measure at the council meeting. This is a request that can and should be made by the president of the Little League.
Approaching Ethics The Virtue Approach ? Focuses on attitudes, dispositions, or character traits that enable us to be and to act in ways that develop our human potential; ? Examples: honesty, courage, faithfulness, trustworthiness, integrity, etc; and ? The principle states: “What is ethical is what develops moral virtues in us and our communities. ” The Utilitarian Approach ? Focuses on the consequences that actions or policies have on the well-being (“utility”) of all persons directly or indirectly affected by the action or policy; and The principle states: “Of any two actions, the most ethical one will produce the greatest balance of benefits over harms to the greatest number. ” The Rights Approach ? Identifies certain interests or activities that our behavior must respect, especially those areas of our lives that are of such value to us that they merit protection from others; ? Each person has a fundamental right to be respected and treated as a free and equal rational person capable of making his or her own decisions; ? This implies other rights (e. g. privacy, free consent, freedom of conscience, etc. ) that must be protected if a person is to have the freedom to direct his or her own life; and ? The principle states: “An action or policy is morally right only if those persons affected by the decision are not used merely as instruments for advancing some goal, but are fully informed and treated only as they have freely and knowingly consented to be treated. ” The Fairness (or Justice) Approach ? Focuses on how fairly or unfairly our actions distribute benefits and burdens among the members of a group; Fairness requires consistency in the way people are treated; and ? The principle states: “Treat people the same unless there are morally relevant differences between them. ” The Common Good Approach ? Presents a vision of society as a community whose members are joined in a shared pursuit of values and goals they hold in common; ? The community is comprised of individuals whose own good is inextricably bound to the good of the whole; and ? The principle states: “What is ethical is what advances the common good. ” Ethical Problem Solving
These five approaches stated below suggest that once we have ascertained the facts, we should ask ourselves five questions when trying to resolve a moral issue : ? What benefits and what harms will each course of action produce, and which alternative will lead to the best overall consequences? ? What moral rights do the affected parties have, and which course of action best respects those rights? ? Which course of action treats everyone the same, except where there is a morally justifiable reason not to, and does not show favoritism or discrimination? Which course of action advances the common good? ? Which course of action develops moral virtues? This method, of course, does not provide an automatic solution to moral problems. The method is merely meant to help identify most of the important ethical considerations. At the tail end, moral issues must be deliberated among ourselves, keeping a careful eye on both the facts and on the ethical considerations involved. A Framework for Ethical Decision Making Ethics or morality poses questions about how we ought to act and how we should live.
It asks, “According to what standards are these actions right or wrong? ” It asks, “What character traits (like honesty, compassion, fairness) are necessary to live a truly human life? ” It also asks, “What concerns or groups do we usually minimize or ignore? And why might that be? ” Admitting our blindness is the beginning of vision . Recognize a Moral Issue ? Is there something wrong personally, interpersonally, or socially? Is there conflict that could be damaging to people, institutions, animals, society or the environment? Does the issue go deeper than legal or institutional concerns? What does it do to people as persons who have dignity, rights, and hopes for a better life together? Get the Facts ? What are the relevant facts of the case? ? What individuals and groups have an important stake in the outcome? What is at stake for each? Do some have a greater stake because they have a special need (e. g. , those who are poor or excluded) or because we have special obligations to them? Are there other important stakeholders in addition to those directly involved? ? What are the options for acting?
Have all the relevant persons and groups been consulted? If you showed your list of options to someone you respect, what would that person say? Evaluate the Alternative Actions from Various Moral Perspectives ? Which option will produce the most good and do the least harm? ? Which option respects the rights and dignity of all stakeholders? Even if not everyone gets all they want, will everyone still be treated fairly? ? Which option would promote the common good and help all participate more fully in the goods we share as a society, as a community, as a company, as a family? Which option would enable the deepening or development of those virtues or character traits that we value as individuals, profession or as a society? Make a Decision ? Considering these perspectives, which of the options is the right thing to do? ? If you told someone you respect why you chose this option, what would that person say? Act, and then Reflect On the Decision Later ? How did it turn out for all concerned? If you had to do it over again, what, if anything, would you do differently? Conclusion All ethical questions hinge on making a decision. So how does one go about framing that choice?
Initially, of course, a person or corporation has to recognize that an ethical issue exists. The issue could be a legal one, or more of a judgment call, but in both cases the question of ‘what is the greatest good’ must be asked (and answered). In determining right versus wrong, we have to remember that those terms are subjective. That’s where the understanding of the definition of ethics, and relying on a corporate code of ethics, can be very helpful. The code is the baseline by which a person, group, or organization can measure the facts of a case; including whether a determination can be made impartially.
Ethical business behavior may be defined by law, but it also can be defined by business leadership. Generally speaking an action or choice can be considered ethically correct if it’s honest, fair, supports a beneficial outcome for both parties, and generally enables the overall corporate image and vision. When analysis and evaluation begins, the rights of the individual and group, the equality of treatment, and the steps taken to remedy the situation in a way that best serves the corporate vision or identity must all come into play.
By examining each of these facts a decision that’s cohesive, consistent and appropriate will be formed. Finally, that decision must be implemented. References 1. Issues in Ethics, IIE V1 N1 (Fall 1987) Revised 201 2. Smith, A (1776/ 1952); An Inquiry Into the Nature and Causes of the Wealth of Nations. Chicago, IL: University of Chicago Press:55 3. Berle, A. A. , & Means, G. C. (2003); The Modern Corporation and Private Property. New Jersey: Transaction Publishers 4. Manuel Velasquez, Claire Andre, Thomas Shanks, S. J. , and Michael J. Meyer; What is Ethics? Markkula Center for Applied Ethics, Santa Clara University . Smith, A (1776/ 1952); An Inquiry Into the Nature and Causes of the Wealth of Nations. Chicago, IL: University of Chicago Press: Page. 55 6. Jack Gilbert, Ed. D; The Role of Ethics and Personal Integrity in Organizations. New Page Consulting, Inc. 1155 Camino Del Mar #402, Del Mar, CA 9201 7. Sahakian, William S. & Sahakian, Mabel Lewis; Ideas of the Great Philosophers. pp 32-33. Barnes & Noble Books (1993). ISBN 9781566192712 8. [email protected] edu 9. Borgerson, J. L. and J. E. Schroeder (2008); Building an Ethics of Visual Representation: Contesting Epistemic Closure in Marketing Communication