Discuss about the Analysis And Evaluation Of Different Aspects Of Business Ethics.
In today’s business world, ethics is considered as one of the major pillars of success as the companies are required to comply with all the ethical code of conducts. Business ethics refers to the applied ethics or professional ethics that helps in providing the solutions of various ethical problems arises from the business operations (Hartman, DesJardins and MacDonald 2014). All the business organizations become majorly beneficial by complying with all the ethical principles and code of conducts like the increase in productivity, retention of clients and others. At the same time, business entities have to face great difficulties while non-complying with the required ethical principles. It needs to be mentioned that the business entities can solve different kinds of complex issues with the help of ethical decision making models (Crane and Matten 2016). The main aim of this report involves in the analysis and evaluation of different aspects of business ethics to solve the ethical issues in the provided case.
As per the above discussion, the Australian business entities are required to comply with the major ethical principles while conducting the business operations. The following discussion provides the overview of these ethical principles:
Integrity: As per this principle, business entities are required to be honest and straightforward while conducting their business operations; in addition, they need to be truthful towards the trust of the employees and the key stakeholders like investors, customers, creditors, lenders and others (Pearson 2017).
Honesty: As per this principle, it is the responsibility of the business entities not to involve in any dishonest code of conduct in the business operation that can mislead the key stakeholders of the businesses. In this process, businesses are required to provide accurate and complete information about various business activities (Hartman, DesJardins and MacDonald 2014).
Fairness: Fairness is considered as another crucial ethical principle that puts the obligation on the business entities to treat all of their employees in equal manner. At the same time, they are needed to be fair towards their key stakeholders (Werhane 2014).
Responsibility: As per this principle, business entities are needed to be responsible enough to discharge their business duties in the honest manner. At the same time, they are required to be committed towards fulfilling the needs of their stakeholders (DesJardins and McCall 2014).
Competence: According to this principle, business entities are needed to have the required competence to fulfil the needs and demands of the customers and other stakeholders. For this reason, the employees of the companies are required to have required competency, innovation and experience in order to live up to the expectations of the customers (Werhane 2014).
Reliability: As per this principle, business organizations are required to gain reliability from the customers by providing them with superior quality of products and services (DesJardins and McCall 2014).
Different types of models are there for making effective decision in order to avoid any unethical situations in the workplace. The following discussion provides an overview of three of them:
REFLECT Model: REFLECT model is considered as a crucial model for ethical decision-making. Six specific steps can be seen in this model for solving any unethical situation. The first step is the recognition of potential issues or problems. The next step is to find the relevant information. The third step is to consult with the peers and supervisors in the company. The next step is the evaluation of the available options. The next step is to arrive to the decision. The last step is to take time to reflect (Ford and Richardson 2013).
The ETHICS Model: As per the above, six specific steps can be seen in the ETHICS decision making model. Evaluation of the ethical dilemma is the first step. To think about various outcomes is the second step. To receive help is the third step. To consider all the relevant information is the fourth step. Fifth step is the risk calculation. Selection of an action is the last step (Craft 2013).
These are two of the major ethical decision making model used by most of the business entities to solve different types of unethical situations in the workplace.
Every unethical situation has their negative effects on some of the specific stakeholders in the business organizations and there is not any exception of this fact in case of the provided scenario. In this situation, the stakeholders are the employees, financial accountant and the company. The following discussion shows the effects of this unethical situation in the mentioned stakeholders:
Employees: As per the fairness principle of ethics, it is the right of the employees to receive fair wages from the companies. However, in the provided situation, the employees are being deprived from getting minimum wage that affects their financial situations. In addition, it is the obligation on the companies to keep the records of formal employment contract. In the absence of this, there is not any guarantee of employment for the employees (Lienert, Schnetzer and Ingold 2013).
Financial Accountant: It is the responsibility of the financial accountants of the companies to ensure the correct calculation of the salary and wages of the employees so that they can receive the correct amount of salary. There can be violation of the ethical as well as professional principles in case the financial accountant does not put attention to this matter. In this process, he/she can lose the job by not fulfilling the professional responsibility (Lienert, Schnetzer and Ingold 2013).
In the provided situation, there are some major ethical issues and they are discussed in below:
Non-inclusion of Employees in the Formal Payroll: As per the provided situation, it can be seen that the company has not included a significant number of employees in the formal payroll. As per the ethical principle of responsibility, companies are required to discharge their responsibilities in the most correct manner. Thus, in the situation, the company has failed in discharging its resomnsbilty that has contributed towards the ethical issue (McMurrian and Matulich 2016).
Non-Payment of Minimum Wage: As per the honesty ethical principle, it is the responsibility of the business entities to provide the employees with the minimum wage as per the regulations. However, in the provided situation, it can be observed that the company does not pay the minimum wage to their employees. Thus, this whole situation has created an ethical issue by violating the honesty ethical principle (Strobel, Tumasjan and Welpe 2015).
Absence of Formal Employment Contract: It is the obligation on the management of the business entities to provide the employees with the formal employment contract as a proof of their employment in the company. However, as per the provided situation, it can be observed that the company has not provided the employees with formal employment contract that leads to the breach of ethical principle like integrity, honesty and responsibility. Thus, this whole scenario has created a major ethical issue (McMurrian and Matulich 2016).
In this context, it needs to be mentioned that financial accountants have different types of responsibilities in the business organizations. It is the responsibility of the financial accountant to ensure proper maintenance and classification of company’s financial records. For this reason, the financial accountants are required to be organized and analytical to maintain the reporting of company’s financial statements (Michalos 2017). There is not any exception of this fact in case of the provided situation.
As per the provided scenario, the first major responsibility of the financial accountant is to make sure that the computation of minimum wage is done in the correct manner. At the same time, the financial accountant needs to check that whether the company has complied with the regulation of Australia for the computation of minimum wage payment. If not, the financial accountant needs to take the matter to the senior management for solution (Nica 2013).
After that, the financial accountant needs to make sure that all the employees have been included in the formal payroll of the company. In this process, the financial accountant is required to check the financial control related to formal payroll so that any deficiency in the system can be discovered (Michalos 2017).
Lastly, it is the responsibility of the financial accountant to make sure that all the employees have records of formal employment contract. In this process, the financial accountant needs to contact with other personnel like the Human Resource Manager for the enrolment of the employees informal employment contracts (Nica 2013).
Conclusion
From the above discussion, it can be observed that ethics play an integral part in the business organizations and all the companies are required to comply with all the required ethical principles like honesty, integrity, responsibility and others. In addition, companies can use different types of ethical decision making model for solving ethical issue in the companies; like REFLECT Model, ETHICS model and others. In the provides scenario, violation of ethical code can be seen that leads to the development of ethical issues in the workplace. For this reason, the financial accountant is required to take some steps to solve these issues; like the correct computation of minimum wages, enrolment of the employees under formal payroll and others.
References
Craft, J.L., 2013. A review of the empirical ethical decision-making literature: 2004–2011. Journal of business ethics, 117(2), pp.221-259.
Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press.
DesJardins, J.R. and McCall, J.J., 2014. Contemporary issues in business ethics. Cengage Learning.
Ford, R.C. and Richardson, W.D., 2013. Ethical decision making: A review of the empirical literature. In Citation classics from the Journal of Business Ethics (pp. 19-44). Springer, Dordrecht.
Hartman, L.P., DesJardins, J.R. and MacDonald, C., 2014. Business ethics: Decision making for personal integrity and social responsibility. New York: McGraw-Hill.
Hartman, L.P., DesJardins, J.R. and MacDonald, C., 2014. Business ethics: Decision making for personal integrity and social responsibility. New York: McGraw-Hill.
Lienert, J., Schnetzer, F. and Ingold, K., 2013. Stakeholder analysis combined with social network analysis provides fine-grained insights into water infrastructure planning processes. Journal of environmental management, 125, pp.134-148.
McMurrian, R.C. and Matulich, E., 2016. Building customer value and profitability with business ethics. Journal of Business & Economics Research (Online), 14(3), p.83.
Michalos, A.C., 2017. Issues for business ethics in the nineties and beyond. In How Good Policies and Business Ethics Enhance Good Quality of Life (pp. 197-212). Springer, Cham.
Nica, E., 2013. Social Responsibility, Corporate Welfare, and Business Ethics. Psychosociological Issues in Human Resource Management, 1(1), pp.9-14.
Pearson, R., 2017. Business ethics as communication ethics: Public relations practice and the idea of dialogue. In Public relations theory (pp. 111-131). Routledge.
Strobel, M., Tumasjan, A. and Welpe, I., 2015. Do business ethics pay off?. Zeitschrift für Psychologie/Journal of Psychology.
Werhane, P.H., 2014. Moral imagination. John Wiley & Sons, Ltd.
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