Engagements, Responsibility and Liability: Ethics Implications

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Adam Gonzalez
Individual Research Project
BA: Business Law (3301)
Thursday 7:00 – 9:45
November 17, 2011

University of Houston – Downtown
100 Main St.
Houston, TX 77002
Adam Gonzalez

Engagements, Responsibility and Liability: Ethics Implications

People act unethically for a number of reasons. Unethical behavior is defined as behavior that contravenes rules designed to maintain the fairness and morality of a situation. The study of business ethics and its implications for different stakeholders have seen tremendous growth in the past few decades. There has also been a rise in the use and development of codes of ethics and announcements for ethical practices by many firms; however companies are still criticized for their unethical practices at different levels. Business ethics, according to the literature has been entrenched with the philosophical details of Ethics (Mintz 1995). Ethics has been defined as ‘the activity of examining the moral standards of a society, and asking how these standards apply to one personal life and whether these standards are reasonable (Perry 2005). The literature on business ethics is divided on its views about the motivation and reason for businesses to have an ethical dimension (Ferrell 2008). Drawing upon Ford, there are two major schools of thoughts, first those who suggest that firms are profit generating institutions and therefore business ethics is yet another way to attract customers, second those who support corporate conscience and intrinsic motivation for the adoption of business ethics (Ford 2005).

Business ethics has been considered very subjective in nature and according to S. Paul is considered a function of time and culture (Paul 2001). It has been established that with the passage of time business ethics have evolved and also that the cultural values and norms drive business ethics within national and regional boundaries (Paul 2001). One of the major studies regarding the national values has been conducted by (Hofstede 1983). According to this research, which was only based on four indicators individualism, power distance, uncertainty avoidance and masculinity, there is a great deal of differences among values across different nations and consequently the business ethics (Reis 2010). Globalization combined with standardization has made businesses financially efficient but at the same time poses questions regarding the standardized codes of business ethics across national boundaries (Di Lorenzo 2006).

One of the main causes of unethical behavior is greed. A person often chooses to act immorally or unethically for personal financial gain (Daly 2007). In business, there are a number of opportunities for employees and employers to do the wrong thing. For example, an employee who has contact with a client may be willing to give them a discount in exchange for a kickback.

A person acts unethically because she believes it helps her career. An unethical act is used as a means of impressing a superior or hurting the career of a competitor. For example, a person sabotages a co-worker's project as a means of making herself look better in comparison.

Ethical conflicts or violations are not always transparent, and it's easy for an employee to perform an unethical act without knowing it (Kanter 2011). For this reason, it is important for companies to make employees aware both of the company's general ethics policy, and specific examples of ethical and unethical behavior.

Ethical issues can be divided at different levels international business, domestic business, and professional ethics (Vinten 1991). At the international level ethical issues include free-masonry and socialism versus capitalism, at domestic level these include religious dimensions, social marketing and ethical education; and lastly at the individual level these include bribery, corruption and data protection (Leung 2005). There are many reasons and criticisms for the failure of adoption of ethics...
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