06-03-2013, 02:32 PM
BUSINESS ETHICS
BUSINESS ETHICS.pdf (Size: 245.08 KB / Downloads: 58)
Definitions of Business ethics
Business ethics is the branch of ethics that examines ethical rules and principles within
a commercial context; the various moral or ethical problems that can arise in a business
setting; and any special duties or obligations that apply to persons who are engaged in
commerce. Those who are interested in business ethics examine various kinds of
business activities and ask, "Is the conduct ethically right or wrong?"
Business ethics is a form of the art of applied ethics that examines ethical rules and
principles within a commercial context, the various moral or ethical problems that can
arise in a business setting and any special duties or obligations that apply to persons
who are engaged in commerce.
In the increasingly conscience-focused marketplaces of the 21st century, the demand
for more ethical business processes and actions (known as ethicism) is increasing.
Simultaneously, pressure is applied on industry to improve business ethics through new
public initiatives and laws (e.g. higher UK road tax for higher-emission vehicles).
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 (e.g. BP's "beyond petroleum"
environmental tilt).
Overview of issues in business ethics
General business ethics
· This part of business ethics overlaps with the philosophy of business, one of the aims
of which is to determine the fundamental purposes of a company. If a company's main
purpose is to maximize the returns to its shareholders, then it could be seen as
unethical for a company to consider the interests and rights of anyone else.
· Corporate social responsibility or CSR: an umbrella term under which the ethical
rights and duties existing between companies and society is debated.
· Issues regarding the moral rights and duties between a company and its shareholders:
fiduciary responsibility, stakeholder concept v. shareholder concept.
Ethics of accounting information
· Creative accounting, earnings management, misleading financial analysis.
· Insider trading, securities fraud, bucket shop, forex scams: concerns (criminal)
manipulation of the financial markets.
· Executive compensation: concerns excessive payments made to corporate CEO's.
· Bribery, kickbacks, facilitation payments: while these may be in the (short-term)
interests of the company and its shareholders, these practices may be anti-competitive
or offend against the values of society.
Ethics of human resource management
The ethics of human resource management (HRM) covers those ethical issues arising around
the employer-employee relationship, such as the rights and duties owed between employer
and employee.
· Discrimination issues include discrimination on the bases of age (ageism), gender,
race, religion, disabilities, weight and attractiveness. See also: affirmative action,
sexual harassment.
· Issues surrounding the representation of employees and the democratization of the
workplace: union busting, strike breaking.
· Issues affecting the privacy of the employee: workplace surveillance, drug testing.
See also: privacy.
· Issues affecting the privacy of the employer: whistle-blowing.
· Issues relating to the fairness of the employment contract and the balance of power
between employer and employee: slavery, indentured servitude, employment law.
· Occupational safety and health.
Ethics of sales and marketing
Marketing which goes beyond the mere provision of information about (and access to) a
product may seek to manipulate our values and behaviour. To some extent society regards
this as acceptable, but where is the ethical line to be drawn? Marketing ethics overlaps
strongly with media ethics, because marketing makes heavy use of media. However, media
ethics is a much larger topic and extends outside business ethics.
Ethics of production
This area of business ethics deals with the duties of a company to ensure that products and
production processes do not cause harm. Some of the more acute dilemmas in this area arise
out of the fact that there is usually a degree of danger in any product or production process
and it is difficult to define a degree of permissibility, or the degree of permissibility may
depend on the changing state of preventative technologies or changing social perceptions of
acceptable risk.
Ethics management:
Ethics management is a new science in the field of management. With the rapid evolution
in the field of management, the role of ethics has been recognized, by and large, by the
management experts. By ethics, it refers to the principles of conduct governing an
individual or group in a society is known as ethics management.
Role of organizational culture in ethics:
By culture, it refers to the ideas, customs, skills, arts etc. of a people or group, which are
transferred, communicated or passed along, as in or to succeeding generations.
The organization that manages such ideas, customs etc. of a particular people or group in
a particular period evolves a distinct culture as drastically different from that of other
similar organizations in the field. This is known as organizational culture. With the
involvement of management in ethical related issues in an undertaking, the roles of
organizational culture in ethics need to be recognized.