Business and management HL
analysis Business ethics in specific case studies
Definition of business ethics
The term business ethics defines the value and meaning of ethics in the aspect of business. Therefor it’s the study of what’s good and evil, what’s right and wrong and just and unjust in business. These ethics include avoid breaking the criminal law in one’s work activity , avoid action that may result in civil law suits against the company and avoid actions that are bad for the company image. Businesses are especially concerned with these three things since they involve loss of money and company reputation. In theory, a business could address these three concerns by assigning corporate attorneys and public relations experts to escort employees on their daily activities.
External influence on business
There are a number of external factors that effects business in the perspective of cultural and international values. These factors are : * business ethics
* moral behavior
* social and environmental audits
As it has already been mentioned , business ethics define 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 perspectives of business behavior and is relevant to the conduct of individuals and entire organizations. These ethics might also cause tension between different stakeholders. It includes values , beliefs , responsibilities and corporate greed’s of a company according the culture.
Another external factor is the effect of stakeholders. As we know stakeholders are the factors that have direct or indirect effect on the life of the company and it’s workers for shareholders, customers, employees, manager, local community, environment and suppliers. These companies have certain responsibilities that will be mentioned right now : - Shareholders: generates profile and pay dividends.
- customers: provide good quality products with reasonable prices. Also safety, honesty ,decency and trustfulness. -employees: health and safety at work. Security, fair pay.
- suppliers: pay on time, pay fair ,rates for the work done, provide element of security. - local community : provide employment , safe working environment, minimize pollution and negative externalities provide external benefits - government: abide by the law, pay taxes, abide by regulations. -management: their aims versus those of the organization as a whole. -environmental aspects : environmental degradation, limit pollution, congestion development and etc.… ,
additional to that, moral behavior is one of the main factors towards having and ethically appropriate business. It consists of questions such as whether what is being done is wrong or right? Should the company be trading with corrupt regimes? trading with weapons? How about the humanitarian issues? To what extent will Advertising and promotion be unethical ? will regulations / legislations of the society be looked forward to in the company? Will safety of products and the work place be provided? Will new products be tested by Research and development? And questions from that nature. There are some tensions towards applying the moralities in a companies ethical aspect . such as situations where profit is standing versus higher , explanations versus development, production versus pollution, supplier benefits versus consumer prices/ lower costs , survival of the business versus needs of stakeholders . for instance in production of toys or multi national industries . but after being under a great deal of pressure, what will the solutions be ? * taxations:
* self regulation
* government eg. EU regulations
* pressure groups
* improve competition and contestability of markets.