Business Ethics and Its Effects and Main Business Ethics Theories

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Business Management 1
(BEC121E)

Assignment 1
Business Ethics
For
Juliet Puchert

By:
Mr. KUDZAI MACDONALD MANDIZVIDZA
201105404
Tut Group:
W10

Contents
INTRODUCTION3
Business ethics concept3
IMPORTANCE OF BUSINESS ETHICS4
Reputation4usiness ethics
Investors’ confidence4
Financial performance5
Consumers5
ETHICAL ISSUES5
The community5
Employees5
Customers6
Suppliers6
Managers7
BASIC BUSINESS ETHICS THEORIES7
Stockholders’ theory7
Stakeholder’s theory7
The Social contract theory.8
Utilitarian model9
Moral rights model9
Conclusion10
REFERENCE11

INTRODUCTION
Business ethics concept
Business ethics are defined as, “moral principles concerning acceptable and unacceptable behaviour by business people” (Friedman, 2007:111). Thus the main concern is inclined on what an individual regard to be right or wrong regardless of what the law say should be done. In other words that’s what organisational stakeholders expect of each other when performing their obligations that way ethics become part of these obligations. Therefore business ethics are also rights and duties between an organisation and its employees, suppliers, customers, its neighbours which involve trust integrity and truthfulness. These business ethics can be measured but this is done on a perspective basis for these are only personal considerations on what is regarded to be right or wrong. Basically there are for main perspectives in which business ethics can be measured. Thus society legal organisational and individual perspectives. There are societal perspectives, according to Hellriegel, Jackson, Slocum, Staude, Amos, Klopper, Louw & Oosthuizen (2004:114), thus the view from the society in which the behaviour occurs. The media expose and report on their behaviours which is then judged by the by the stake holders around them and the judgement is done on the perspective of the stakeholders. This way it makes it a task to the management to promote adjustments in ethical standards for these should tally with the society they are operating in and the time period in which the organisation is operating. The ethics can also be expressed in the form of laws by the government. Laws are, “society’s values and standards that are enforceable in the courts” (Hellriegel, et al., 2004:115). The legally bound ethics usually tally with public perspectives for they emanate from them. These will be enforceable and the level at which an organisation is operating can be measured against these laws. For instance it’s now expressed by law not to discriminate racially when recruiting. Ethical and unethical behaviours can be defined by an organisation. Thus when an organisation guide the actions of the employees be it through the behaviour of the top management, thus they lead by example or creation of codes of ethics. Regardless of all the measures of ethical standards above one as a human have their own sense of what is right and what is wrong. These ethics involve managerial ethics which are defined as the, “value-oriented decisions and behaviour “(Managerial ethics and social responsibilities.2007) thus the considerations by the managers they think is positive in regard to their own perspectives. Thus another way in which an organisation can define its ethics. IMPORTANCE OF BUSINESS ETHICS

Reputation
“It is the collective opinion of stake holders towards an organisation” (Rossouw and van Vuuren, 2004:33). The reputation is of effect towards the level of sales of a firm. It also attract investors in the sense that a firm which is of high reputation investors know that it has got high degree of potential success in its operations for this leads top high levels of success. Reputation also leads to recruitment of staff with expertise this being due to that high levels of sales sum to better-off salaries that way the organisation will have a large base from which they select their employees (recruitment)...
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