Contemporary Business Ethics: Understanding And Addressing Ethical Issues

Individual Learning

Discuss about the Business Ethics for Contemporary Business.

Before understanding business ethics, it is important for us to understand the true meaning of ethics. Ethics can be explained as moral values that directs an individual’s behaviour and actions. According to scholarly definition, ethics is the important prearranged assessment of how an individual needs to behave in a given situation or circumstances, how we need to restrict ourselves from pursuing self interest when it is the cause of other’s problem or suffering (Durkheim, 2013). Every individual has attitude and thoughts. Ethics concerns efforts to discover higher-order ideology and values in an effort to rationalize and unite individual’s diverse moral values.

Business ethics can simply be explained as a set of professional ethics or a code of law that a business organization must follow in order to perform responsible business operations and provide welfare to the society (Weiss, 2014). Business ethics is a sub category of ethics and is based on moral and social principles. It basically provides an outline for ethical business processes. It presets socio-cultural, economic, juridical and other limitations for conducting a business, although it is a voluntary concept and government does not force business ethics on business organizations. While business ethics is a comparative term which changes according to personal values and beliefs, country of business operations, etc. Every profession has a definite set of code of conduct that must be followed by professionals which guides what is ethical and what is not in that particular profession.  

To understand business ethics it is important for business leaders and managers to recognize the ethical issues that rise in business processes. It is generally an identifiable situation or condition with the aim of evaluating between moralities and choosing the most ethical decision which will act both in welfare of stakeholders and business interest. The concept of ethics and morality changes according to socio-political-cultural practices around the globe (Hoffman, et al. 2014). For instant, in western business environment, if I am visiting a client for the first time, it is perfectly normal to bring gifts in elaborate manner and bribing is acceptable. On the other hand, in Southeast Asian countries bribing is viewed as impolite and unethical. For better understanding of some common ethical issues faced by business organizations, I have listed the most crucial and common ones bellow:

• Conflict of Interest: In the ethical course we have learnt that, building confidence among stakeholders is an important issue that organizations always emphasizes to build upon because it is our ability to trust among each other assist us to conduct business with each other. Thus the primary ethical issues faced by business organizations are integrity and trust. A conflict of interest rises in business situations, where we have to take decisions in personal interest or in interest of employee welfare (De George, 2011). To keep away from conflicts of interest, workforce must be able to take apart their personal financial interests from business transactions.
• Decision making: Decision making process within an organization is either a responsibility of an individual or a group. Decision making effects the organizational cultural of the business. So, it is vital that decision taken within an organization is an ethical as it can effect internal and external business environment, employee performance and stakeholder’s relationship with the organization (Weiss, 2014). Business operations are becoming a Hercules task in the contemporary unstable and multifarious business environment. The expectations of stakeholders are becoming diverse in terms of accountability and fairness, thus violating these confidences can bring negative results for the business organization. As the increase in competitiveness in the market, it is becoming evident for organizations to learn about diverse cultural diversity and their significant applications. As a result this develops the challenge for organizations to sustain and grow as a trusted brand in changing business environment.
• Working conditions and employee welfare: In our contemporary business environment, employee rights and suitable working conditions are constantly been improved by business organizations to immerge a more socially responsible organization. The new competitive market has experienced a considerable improvement in working conditions in multiple industries including, pharmaceuticals, retail, transportation and logistics, banking, software and hardware, etc. Thus in the course we have learnt that ethical working conditions and protecting employee rights are important issues that effects business and stakeholders relationship to a great extent.
• Social networking Issues: With technological advancements and ease in communication, business practices and organizational structures are changing drastically. New age employees or the millennials are constantly in touch with each other through social sites through which they share personal experience and information. The social networking is constantly evolving creating challenges for business organizations regarding corporate communication process. Access to social media during working hours by employees not only consumes time but also decrease the quality of work. Also, access of social media from workplace also causes misuse of organizational resources. Unauthorized use of organization’s name, logo, and copyright information on social media platform can violate organization’s rights and power over their property. Also disclosure of unauthorized sensitive information can harm organization’s competitive advantage. Sharing personal opinion (mostly negative) about organization or co-workers can be a professional damage for the employee as often organizations monitors employee activity in social media sites and if company reputation is under risk due to negative remarks or comments on social media, organizations take strict action.
• Communication: Communications is a further part in which ethical apprehension might occur. Phony and confusing advertising, as well as misleading selling strategy, unsatisfied customers can cause confusion and turbulent business operations. Honesty concerning product and service quality is vital to consumers. For instance, in the pharmaceutical industry, herbs are sold with partial regulation and testing, and there are many independent sellers in the market. Larger pharmaceutical manufactures and corporate like Warner-Lambert take control on regulated use of herbs and communicate in a effective manner about the regulation and testing process with the consumers. But as many small and independent manufactures are already present, regulations are not always ethically done; they also often fail to inform customers about product specification and differentiations.

In our day to day life where we face moral situations may have to carefully choose between what is right and what is wrong and decide according our actions and reactions. Similarly when we are conducting business, we face similar ethical and moral situations where the corporate or social circumstance around the decision maker generates serious obstructions and difficulty to act responsibly. One important point of ethical behaviour is the reality that social situations have a major influence over organizational behaviour (Peterson, and Ferrell, 2016). Thus effective business leaders have a great influence in creating ethical business environment, which is also known as corporate culture that promotes ethical decision making and ethical practice in everyday business processes. The significance of ethical business leadership is to generate the circumstances in which ethical practices are conducted and corrupt people are also guided and motivated to act morally.

Understanding Business Ethics

In the modern business organizations, the management is giving immense importance to build corporate social responsibility and every business organization has a strategy regarding CSR and publicizes an annual report detailing the activity (Hartman, et al. 2014). In short CSR can be defined as the connection and association between the corporate and the stakeholders. A business organization that is alarmed regarding the social order with producing profits is expected to empower voluntarily in socially conscientious activities. For instance, renowned corporate IT giant Microsoft has been awarded the organization with CSR activities by Forbes. A strong CSR brings trust and commitment among the stakeholders. Ethical business environment has a positive impact with ethical behaviour of employees.

Enquiry based learning can be explained as the learning process which is based on analysis, learning and research. EBL has helped me in taking more responsibility for recognizing what I need to learn and finding reliable sources for acquiring knowledge. It has helped me to develop my research skills in solving practical problems. Through EBL learning, I have cultured the importance and significance of ethics in business decision making and other processes. As I student of business, I have learnt that managing a business organization and taking decisions for organization’s growth and sustainability takes a lot of skills, abilities, knowledge and practical experience. One of the crucial elements that every manager should understand and have knowledge is to take decisions which will not only be potential for organizational growth and sustainability but also safeguards stakeholders’ interest and community as a whole. As discussed earlier, business ethics is a group of code of conduct that every profession should maintain in business processes and decision making and applying a moral code in business. Thus it is necessary for business organizations to engage in fair practice and this is a long term learning process which cannot be acquired over night.

As a student of business ethics, there are two primary factors for learning business ethics is helpful before entering workplace:

• Accepting the significance of relationship of ethics and morality will help me to become an effective business leader: In any business organization, when an individual is at work, catching up with deadlines, routine works, reviews and organization’s performance reports, it is quite evitable to overlook the secret factors that make a business successful. It is co operations and coordination between the workforce and leadership qualities. In the present turmoil economic conditions we often experience leaders abandoning their struggling organizations and employees concerned with personal goals and objectives. Thus it is necessary for new age business leaders and professionals to learn skills and abilities which will help them in solving complex corporate dilemma and circumstances (De Cremer, & de Bettignies, 2013).
• Having theoretical and practical knowledge about ethics and morality will help me to identify situations and options that are available to make decisions that need integrity, fairness and reliability. It also gives me a pre knowledge about real world business challenges that we are going to face as business professionals.

In my course I have learned the significance of ethics in business and according to my understanding I have noted the following issues:

• Basic Human Need: Honesty and integrity is one of the most basic human needs. An individual cannot grow in a dishonest and unethical environment as a result almost everybody wants to work in a organization which is moral and ethical in its practices.
• Developing Reliability: A business organization which has a strong desire to deliver moral practices is respected and trusted by the society even if an individual has least information about the organization. For instance, Microsoft is awarded one of the most ethical and morally responsible organizations towards society in 2015 by Forbes, which has helped Microsoft building a perception, and brand which is held far and wide and building strong brand image even for those who does not even have idea of Microsoft’s business. Also, a reliable business organization also attracts investors to invest in the business for long term growth (Pimentel, et al. 2010). Thus maintaining ethical practice in a business organization will allow it to grow in long term.
• Integrity in Workforce: Stakeholder includes employee or workforce also and a socially responsible organization takes a decision which safeguards the interest of the employees. Thus brining trust and commitment in employees and committed workforce perform better to achieve organizational objective. A socially responsible organization has a strong leadership to guide the organization to success. A business organization which safe guards its employee welfare and promotes business and workforce environment for employee growth and development also attracts the best talents in the industry. Thus, everybody wants to work for a socially responsible organization, as it helps employee to grow and sustain.

Thus, in our business ethics course line I have learned that ethical and moral decisions are profitable to a business organization in long term growth and sustainability. Ethics is the primary element that safeguards public interest even if law fails to preserve it and helps a business organization in making business decisions and practices which are socially responsible. Business ethics will assists and guide me about how to conduct my job responsibilities, relationship with co-workers and subordinates and make crucial business decisions in the sense that it will be beneficial in long term professional career.

1. Business Ethics:
2. When I was in my previous job as an executive in ABC Ltd I came across one such circumstance where I was stuck between my morality and the temptation. I was asked by manager to scrutinize and select one of the advertising companies that my organization was going to give advertising tender for one year. I was given five advertising firms and term performance reports. One of the advertising companies was CDE Pvt Ltd and their sales manager offered me a bribe is I would have selected them and helped them to get the tender. I was shocked and confused and I didn’t have the courage to take decision by myself, so I reported the matter to my manager who took the matters in hand and eventually that organization was black listed from getting the tender. After I learned and understood about business ethics, looking at that incident, I think now I can better judge the situation now. If I was aware about ethical decision making at that time, I would have taken action myself rather reporting to my superior. That showed my insufficiency to take serious business decision in ethical situations where we have to choose from right and wrong and act according to organization’s interest. Ethics learning is important because it sets the system of standard behaviour in an individual (Lamberton, 2014). As a business professional I have to face situations where there will be a conflict of interest and position of trust, in those circumstances, my study of ethics will assists me to take moral conclusions.
3. An understanding of ethical theories & moral reasoning will assist me to apply business ethics in my future professional practice by:

• Moral reasoning can be simply explained as the judgmental process of understanding a situation if it is ethical and unethical (Wildermuth, et al. 2014). It is the moral development of an individual which assists to identify moral situations. In business organizations, we have to face situations where moral reasoning is required thus understand of ethics, theories and its implication is very important for any business professional for effective decision making. It includes our moral behaviour which allows us to feel how others will be affected by our decisions.
• Studying ethics will help me to understand individual’s perception about what is moral and what is unethical and analyse how people decides when faces ethical dilemmas.
• Studying normative ethical theory has helped me to judge an individual’s ethical action and why they should take that. For instance, when a person It serves as a principle for evaluating a situation. Understanding normative ethical approach will provide me perspective to take ethical decisions.
• Learning and understanding Prescriptive ethical approach will assist me to focus on the duties and responsibilities that my job needs me to perform and my ethical behaviour to fulfil my responsibilities. For instance, a train driver is viewing a child on the railway track, he can save the child by derailing the train, which can cost some loss for the company or he can run over the child to save the loss. In this scenario, the driver should take ethical decision of derailing the train as a loss or live is more than business loss.
• The Utilitarian ethical approach has taught me to take decision that will provide greater benefit. For instance, as a business manager I will outsource my production unit to some other low cost location so that my consumers can get the product in much cheaper margin.
• Consequentialismargues that the principles of an act are evaluated completely by its consequences (Wenstøp, 2005). This theory generally produces self defeating results if applied. Usually, this approach is not applied in practice but will allow me to understand the self defending nation of my co workers and subordinates.
• Thus study of ethics and ethical theories have helped me to understand myself as well as others and human behaviour during decision making. It has also taught me how ethical practice can bring effectiveness and integrity and productivity in workforce as well as in organizational success. 

Reference: 

De Cremer, D. & de Bettignies, H. 2013, “PRAGMATIC BUSINESS ETHICS”, Business Strategy Review, vol. 24, no. 2, pp. 64-67.

De George, R.T., 2011. Business ethics. Pearson Education India.

Durkheim, E., 2013. Professional ethics and civic morals. Routledge.

Hartman, L.P., DesJardins, J.R. and MacDonald, C., 2014. Business ethics: Decision making for personal integrity and social responsibility. McGraw-Hill.

Hoffman, W.M., Frederick, R.E. and Schwartz, M.S. eds., 2014. Business ethics: Readings and cases in corporate morality. John Wiley & Sons.

Lamberton, G.W. 2014, “An ethical response to climate change”, Journal of Business Systems, Governance & Ethics, vol. 6, no. 2.

Peterson, P.E. and Ferrell, O.C., 2016. Business Ethics: New Challenges for Business Schools and Corporate Leaders: New Challenges for Business Schools and Corporate Leaders. Routledge.

Pimentel, J.R.C., Kuntz, J.R. & Elenkov, D.S. 2010, “Ethical decision-making: an integrative model for business practice”, European Business Review, vol. 22, no. 4, pp. 359-376.

Weiss, J.W., 2014. Business ethics: A stakeholder and issues management approach. Berrett-Koehler Publishers.

Weiss, J.W., 2014. Business ethics: A stakeholder and issues management approach. Berrett-Koehler Publishers.

Wenstøp, F. 2005, “Some viewpoints on emotion, consequentialism and multicriteria decision making”, Journal of Multi?Criteria Decision Analysis, vol. 13, no. 4, pp. 191-198.

Wildermuth, C., De Mello e Souza, Carlos A & Kozitza, T. 2015, “Circles of Ethics: The Impact of Proximity on Moral Reasoning”, Journal of Business Ethics, .