Business Ethics

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Business Ethics
"Like Nailing Jell-O to the Wall"

What are ethics?

A simple definition for "ethics" is those standards or morals a person sets for himself or herself regarding what is good and bad and right and wrong. If something is "ethical", it does not necessarily mean that it is legal, and vice-versa. This is partially because ethics are "subjective" – that is, each person's ethics are unique to that individual. For example, Sally, who works at Becker's, may give a carton of milk to a young mother with a baby who has no money for food. Though Sally believes this action is ethical, it is not legal. Another employee may not see Sally's action as ethical.

Where do ethics come from?

The most common factors that form a person's individual ethics are:

Family Influences. People tend to develop beliefs about ethics and morals from their parents, brothers, and sisters based on observing their behaviour, and punishment for doing things that the family perceives as "unethical".

Peer Influences. Classmates and others in a person's social network can shape ethics. Peer pressure, for example, can help determine how much a person is willing to engage in questionable activities like shoplifting, lying, etc.

Past Experiences. Often, the consequences of previous behaviour condition a person to feel comfortable with certain ethical standards. For instance, if a sales person lies to a customer to make a sale and then is reprimanded by the manager, he or she would likely perceive lying as undesirable behaviour and unethical. On the other hand, if the person makes the sale, and is rewarded by the manager, lying may become perceived as a desirable and ethical behaviour.

Religious Affiliation. Generally, a person's religious affiliation (if one exists), will shape what that person perceives as right and wrong.

Situational Factors. People adjust their ethics to suit certain circumstances. For instance, Sally in the example above, would probably have changed her behaviour if the customer had been a well-dressed parent who drove up in a BMW.

Business ethics

Business managers face ethical dilemmas (ethical questions) almost every day. Ethical dilemmas occur when a manager is faced with two or more conflicting ethical issues, and has to make a choice.

1. Business to Employee. A business has a responsibility to act ethically towards its employees. Most importantly, employers must hire and fire people in ethical ways. Wages and working conditions are a second ethical issue. Businesses must ensure that employees are paid a fair wage, and that working conditions are reasonable. For instance, paying a worker $1 per day is considered unethical. The same could be said of having an employee work in a room filled with toxic fumes that would cause illness. Privacy is the final ethical issue with respect to employees. This includes random drug testing; and listening to employee telephone calls.

1. Employee to Business. Employees have ethical responsibilities towards their employers. Some of importances include taking a part-time job with a competitor; leaking company secrets; wasting company time; and theft from the employer.

1. Business to External Environment. Because businesses exist within a community from which they take resources, some ethicists believe that businesses have ethical responsibilities to the community. This obligation to protect and enhance the society is called Social Responsibility. This also includes responsibilities to the customers from which they earn profits. The main areas of Social Responsibility are:

Ecology and environmental quality - preventing and cleaning pollution, noise control, recycling, preserving land.

Consumerism - truth in advertising, warranties, control of harmful products.

Community needs - helping charities, aid with health care and urban renewal.

Governmental relations - elimination of bribery of officials and lobbying, following...
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