BUSINESS ETHICS 10
Businessethics, also known as corporate ethics, are applied principles orpracticed values that evaluate ethical ideologies and moral problemsthat manifest in a business setting. It is functional to all types ofbusiness and applicable to the behavior of individuals and entirebusiness organizations (Berger & Herstein, 2014). Ethicalrequirements are necessary for very many aspects of life. Theyprovide different codes of conduct in which people should oblige toin order to maintain sanity. The most common forms of ethics arethose that society expects its population to uphold. There are manyreasons why ethics should be the basis upon which business isconducted. The complex and competitive nature of the corporate sectormakes it be in desperate need of principles. Without the guidance ofvalues, there will be gross misconduct that will characterize thisindustry (Rossouw, 2011). These ethical values serve to tame roguepeople in business and organizations and most importantly to ensurethat the consumers get value and quality for the products that theybuy (Srinivasan, 2011). Business ethics should be strictly followedbecause the investors, whose primary agenda is to make abnormalprofits regardless of any circumstance, would exploit the consumerswithout the regulations.
AccordingtoBergerand Herstein (2014), ethics refers to the guidelines that controlhuman every day human decisions. Others would argue that they areinternal systems that guide a person’s behavior, embedded intoevery individual by the community, laws, faith, tradition, family,and personal morals (Berger & Herstein, 2014). Professional andcorporate organizations, mainly licensing bodies, normally have awritten Code of Ethics that control standards of professionalbehaviors anticipated of all in the business fields (Susong, 2013). It is worth noting that ethics and laws are not identical. Similarly,the legal and ethical actions taken in given circumstances are alsodifferent. Regulations and Statutes passed by administrative boardsand legislative bodies provide the necessary rules that govern thebusiness world. Slavery was in the past officially permitted in theUnited States of America however, no one could argue that it wasethically correct (Berger & Herstein, 2014).
Businessprinciples represent the values of enterprising, of which one agendais to study the primary purposes of an enterprise. If a corporation’sidea is to maximize investor returns, then sacrificing profits toother requirements is a breach of its core responsibility. Businessentities are lawfully considered as private in the United States andmost countries. The entrepreneurs are legally allowed to theliabilities rights that are determined by their citizenship (Berger &Herstein, 2014).
Businessethics are important to the corporate world because they govern thedeeds and actions of people in the business sector. Corporate moralvalues have both descriptive and normative dimensions. However, as acorporate entity and a career specialization, the field is normative.Scholars who are trying to understand business behavior usedescriptive methods (Rossouw, 2011). The quantity and range ofbusiness ethical issues disclose the urge of return maximizing habitwith noneconomic concerns. Governments apply laws and regulations topoint business behavior in what they perceive to be beneficialdirections (Berger & Herstein, 2014). Moral values entirelycontrol details and areas of practices that lie outside governmentalpower. The emergence of large corporations with limited relationshipsand sensitivity to the communities in which they function acceleratedthe development of proper ethics regimes (Rossouw, 2011). Moreover,the survival of humanity greatly depends on the events that takeplace in the business world. Businesses, in the absence of ethics,will lead to the supply of goods and services that are not fit forhuman consumption (Van & Demuijnck, 2011). Additionally, therewill be unnecessary inflation of crucial commodities. Due to suchfactors, this field has attracted a lot of public attention. Sincethen, this subject has been studied by academics in the endeavor tounderstand its economic and social implications (Rossouw, 2011).
HowCompanies Lack Ethics
Itis widely known that the general duty of the corporate presidents isto generate maximum profits while in compliance with the fundamentalrules of the society. These consist of both the regulations includedin the law as well as the moral custom policies. Humans are the onlyentities that can have responsibilities- a business cannot haveduties (Van & Demuijnck, 2011). Ethical issues comprise the civilrights and obligations between a business and its workers, suppliers,clientele, neighbors, and, most importantly, its fiduciary task tothe shareholders. Take-overs and industrial intelligence are some ofthe problems that strain the relations of different corporations.Connected issues include business governance, company socialentrepreneurship, political contributions, and official matters suchas the ethical debate over introducing an offense of businessmanslaughter and the promotion of corporations` ethics policies(Susong, 2013). Ethical principles of an entire organization can beseverely damaged if a business psychopath is in charge (Rossouw,2011).
Financeis a societal science discipline. Finance is closely related tobehavioral economics, accounting, sociology, management, andeconomics. It involves technical issues such as the mix of equitydebt and dividend policy, the assessment of alternative investmentprojects, futures, options, swaps, and other derivatives, as well ascollection diversification. It is frequently mistaken by some to be adiscipline that is not linked to ethical burdens. The recent monetarycrisis caused critics to dare the ethics of the executives in controlof the United States of America and European monetary institutionsand financial control bodies. Finance ethics is unnoticed becauseissues in finance are frequently addressed as matters of law ratherthan ethical requirements (Berger & Herstein, 2014).
Nevertheless,some of the economists influenced by the philosophy of neoliberalismsaw the purpose of economics to be the maximization of financialgrowth through a fastened consumption and production of services andgoods (Berger & Herstein, 2014). Neoliberal principles promotedeconomics from its place as a component of economics to its positionof independence. Supporters of the ideology believe that unrestrictedfinancial flows, if redeemed from the connection to economicrepressions, it can best help the developing nations to grow rapidly(Susong, 2013). The theory suggests that open monetary systemsquicken economic growth by promoting foreign capital inﬂows, thus,enabling advanced levels of savings, employment, investment,efficiency and welfare, as well as containing dishonesty (Berger, &Herstein 2014). Neoliberals suggested that countries open theirmonetary systems to the worldwide market with minimal regulation overmoney flows. The recommendations, though, are standard withcriticisms from various schools of ethical beliefs. Some practicalethicists established these claims to be true and valid, even thoughneither of these makes the recommendations wrong or unethical(Rossouw, 2011). Financial analysts observe that increasing themonetary growth of a state to its highest level is tantamount toplacing the interests of that country second despite that scholarsdispute that economic development offers higher security than mostalternatives (Van & Demuijnck, 2011). Given that history showsthat neither controlled nor uninhibited companies always behavedecently.
Theidea of brought up by the neoliberals, which prompted developingstates to open up their financial systems to foreign investorswithout any restrictions was strongly refuted by the ethicists. Theargument that the removal of regulations and the opening up of neweconomies would decrease bribery was also opposed (Rossouw, 2011). According to Susong (2015), a rational agent is merely one whopursues individual financial advantage. In other words, beingbalanced in finance involves being distinctive, money-oriented, andaggressive. Commerce is a monetary game for humans, and the victorsemerge with fiscal benefits. This principle is accepted in economics(Santa Clara University, 2012).
Businessethics also applies to Human resource management (HRM). HRM involvesactivities such as employment orientation, selection, training,performance appraisal, manufacturing relations health and safetyissues. Corporate Ethicists differ in their orientation towards laborprinciples (Van & Demuijnck, 2011). According to Susong (2013),the presence of labor etiquette and a free workplace are some of thefactors used in the evaluation of the human resource ideologies.Examples of inalienable rights found in different workplaces includecollective bargaining and remuneration determined by individualworth. Nonetheless, prejudicial actions such as preference for acertain gender, individuals within certain age bracket, prettiness,weight, faith, disability and race are unethical. A familiar approachto stopping discrimination is taking an affirmative action (Susong,2013).
Ethicalobligations are accomplished once the staff has can discuss theirremuneration depending on the living cost, as well as promotions thatare determined by their qualifications. It is worth noting that manyorganizations have fewer promotion openings hence, the absence ofthe opportunities may not indicate a breach of the standard morals.It may seem unjust if a worker who has been with a business longer isnot approved for a promotion, but it is not unprincipled. It is onlyunethical if the boss did not give the worker appropriatethoughtfulness or used indecent criteria for the promotion (Van &Demuijnck, 2011). Possible workers have moral obligations to theirbosses, concerning intellectual assets protection and whistle-blowing(Rossouw, 2011). Managers must think about the place of work safety,which may entail customizing the place of work or providing suitabletraining or danger disclosure. Larger economic aspects such as tradepolicy, immigration, globalization, and trade unionism influenceworkplaces. They also have ethical dimensions but are frequentlybeyond the purview of individual companies (Van & Demuijnck,2011).
Businessethics are meant to maintain sanity within the corporate sector. Thehuman resources sector also requires following of strict ethicalcodes. The staff needs to be treated in a humane way so that theycan, in turn, be productive and efficient. It is human nature to begreedy in wealth creation thus, entrepreneurs are likely to commitmany business offenses. However, just like the ethical requirementsin the society, the corporate sector is also regulated by certainprinciples. These ethics are passed on good faith rather thanbusiness restrictions such as embargos that are imposed by countriesto others. Moreover, the monetary sector can be corrupt due to itssensitive nature. But with principles, however, sanity can beachieved in this crucial economic area.
SantaClara SCU hosts conference on business ethics andcorporate governance. (2012, Feb 02). Business Wire. Retrievedfrom http://search.proquest.com/docview/445488172?accountid=45049
Berger,R., & Herstein, R. (2014). The evolution of business ethics inIndia. International Journal of Social Economics, 41(11),1073. Retrieved fromhttp://search.proquest.com/docview/1633949187?accountid=45049
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Srinivasan,V. (2011). Business ethics in the South and South East Asia.Journal of , 104, 73-81.doi:http://dx.doi.org/10.1007/s10551-012-1264-z
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VanLiedekerke, L., & Demuijnck, G. (2011). Business ethics as afield of training, teaching and research in Europe. Journal of, 104, 29-41.doi:http://dx.doi.org/10.1007/s10551-012-1260-3