Ethics by definition is a set of rules or standards that govern the conduct of a person or members of a group. Ethics involves learning what is right or wrong, and doing the right thing. The controversy: doing the right thing based on a moral principle or doing the right thing based on the situation. Doing the right thing does not always mean the same thing to different people, ultimately; it is up to the individual. Business ethics is knowing what is right or wrong in the workplace and doing what is right. Doing what is right, is not just the obvious "be good," "don't lie," etc., in times of stress, these values are overlooked. With all the scandals showing up in the press, business ethics has come under scrutiny. Did these companies have a business code of ethics? If they did, were they ignored out of greed or out of confusion? Without a strong code of ethics, managers/leaders have no strong moral compass to guide them in times of crisis and confusion.
Business ethics can be broken down into to broad areas:
Managerial mischief, example Enron, includes "illegal, unethical, or questionable practices of individual managers or organizations, as well as the causes of such behaviors and remedies to eradicate them." Here in lies the problem, more often than not, business ethics is more a matter of dealing with dilemmas that have no clear indication or what is right or wrong. 2.
Moral mazes of management consist of the day-to-day problems that managers have to deal with from conflicts of interest to misuse of company resources.
From the time of Aristotle, ethics has been the domain of philosophers, academics and social critics. There is has not been a practical resource designed specifically for leaders and managers. Most information on business ethics contains sensationalistic stories of business "gone bad" but not the daily concerns faced by managers and leaders. Or the information deals with simplistic ethical questions such as "Should Harry steal from the company?" Real-world cases are often more complex than that. With the birth of the social responsibility movement in the 1960's, expectations of businesses were raised. Businesses expected to use their financial and social influence to address social problems such as poverty, environmental protection, equal rights and public health. People asserted that because businesses were making a profit from using our country's resources, these businesses owed it to our country to work to improve society. Business ethics has become a management discipline like public relations and human resources. Organizations realized they needed more guidance to ensure that their dealings supported the common good and did not harm others. Most business schools provide some form of training in business ethics. Proponents of corporate social responsibility argue that the typical management education produces leaders who have a limited capacity to think broadly about the impact of their decisions on stockholders, employees, suppliers and the wider community. Competitive pressures on managers and ranking pressures on business schools have combined to encourage business educators and corporate leaders to pay even more attention to profit margins and maximization. Ethics is an integral part of management and leadership. An oft-cited case, Johnson & Johnson's Tylenol tampering, is a perfect example of business ethics cone right. "The Credo", Johnson & Johnson's code of ethics, was developed early in Johnson & Johnson's history. These values became the way Johnson & Johnson would always operate and became a part of everyday decision making. During the Tylenol crisis, instead of downplaying or hiding the incident, Johnson & Johnson openly admitted the problem and promised replacement bottles for every bottled returned by a customer. This and a recall of all Tylenol products cost the company $100 million and a 17% drop in stock value. Because of "The Credo," Johnson & Johnson willingness to...
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