Ethics and Governance

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With reference to the Oxford English Dictionary (2012), ethics is described as the science of morals. It is also the agency of study with regards to the values of moral obligations of what is right or wrong. It also covers human behaviour. A company makes many decisions in a course of one day. It may include, launching new products, doing Public Relations, making sales, rewriting company policies and the recruitment or retrenchment of people, just to name a few. All business aims to do so ethically. To conduct business ethically, a business must first commit to adhering to laws and regulation (Timms, 2009). These are clearly defined, as they are in black and white. However, once the definition of what is ethical becomes contested, ethical dilemmas will arise. An ethical dilemma occurs when there is a situation which all alternate choices and behaviours have been deemed undesirable, and that there may be potential ethical consequences when one is unable to identify the right from the wrong. An example of an ethical dilemma is of follows, where one faces a conflict between his ethical code and his business aims. Cadbury, the chocolate producer, was offered a contract by Queen Victoria to send decorative tins of chocolates to every single one of her soldiers in the Anglo-Boer war in South Africa (Andrews, 1989). However, since he was against the war, which resulted in him deciding to resolve this conflict by completing the order without profit. According to Sir Adrian Cadbury (1987), his grandfather “made no profit out of what he saw as an unjust war. The additional work benefitted his employees, the royal presents consisting of tins of chocolates were sent to the soldiers, and it was a win-win situation. In a business, there are 3 levels of ethics: the ethics of the governing body, workplace ethics and individual ethics (Trevina & Nelson, 2011). A governing body usually is made up of a board of directors, whose aim in the company is to make good corporate practices easier and more available for employees. They too must drive and motivate employees to strive for good performance, conformance and results. Workplace ethics are important, as it ensures a conducive and supportive environment to work in. There must be equal treatment among and within subgroups, open communication between levels, and information must be transparent and readily available. Individual ethics is affected by four complementary elements. Individuals must be able to identify ethical issues; recognise the values and priorities through their grasping of principles, rules, norms and theories; developing their individual sets of reasoning and perception; and improving the strength of one to act upon such decisions (Trevina & Nelson, 2011). Before a difficult decision is made, the shareholder or the manager has to think a problem though. One way to do so is using Kidder’s Ethical Checkpoints (2006). He has 9 checkpoints which he feels will lead to an ethical decision being made. First, the manager needs to recognise that there is a moral issue. After determining the actor, he has to gather the relevant facts. Next, he tests for right-versus-wrong issues as well as paradigms. After applying resolution principles, he has to look for a third way before making the decision. After the decision is made, he has to revisit and reflect on the decision. After much research, I feel that Utilitarian approach is the most useful in guiding company decisions. I will explain why below. A decision is only ethical, according to the utilitarian principle, if it has the greatest net utility as compared to any other alternatives. As a decision maker, he must evaluate and weigh every option present to him. He must determine if there any positive or negative utilities arising from the option, before selecting the option that has the greatest net utility (Fuitzsche, 2005). It is very similar to the cost-benefit analysis used by stakeholders to consider the costs and benefits...
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