Why Organizations Should Uphold Ethical Measures - Coursework Example

? GULF COLLEGE-MUSCAT-SULTANATE OF OMAN UNDERGRADUATE BUSINESS PROGRAMME ACADEMIC YEAR ASSIGNMENT ID NO. MODULE CONTEMPORARY MANAGEMENT ISSUES MODULE CODE: MODULE LEADER: WEIGHTING: 100% SUBMISSION TIME AND DATE: Number of Words: 2445 Introduction: Business ethics deals with issues of right and wrong. Morality deals with customs, ideals and values ingrained in societal processes that explain the issues which are right or wrong. Ethics is more to moral ideals and the appliance of reason to expound specific rules and principles that establish right and wrong for a given situation. These rules and principles are called ethical theories. Ethics and values differ in that ethics are acquired from philosophical theories while values are acquired informally through valuing process of socialization. For something to be considered to be a value it must have the three key components; freely chosen, the prize and acted upon. Nowadays the world is considered a global market hence the term Globalization which means that business around the world is reduced into borderless units where trade moves freely from border to border. However, globalization has influenced the erosion of business ethics. The global economy can be referred to as the removal of barriers to trade and investments and the unprecedented international mobility of capital. Sustainability is the ability of a business to meet its demand and supply in present and also in future, is an important aspect for business ethics. Businesses need to use resources meaningful so as not to affect future generation needs (Crane & Matten, 2003). The case under consideration is the case against big tobacco companies i.e. Philip Morris, Reynolds, and Liggett on the safety of their products. These companies are being accused of knowingly selling harmful products such as cigarettes which cause lung cancer to consumers. They advertise their products to the general public especially targeting the youth and hiding the fact that the products are not healthy safe. They have also hindered various meaningful researches to determine the safety of their products and failed to produce freely safe products. Thus, the U.S. Department of Justice (DOJ) gathered evidence and filed a suit against these companies for violating the Racketeer-Influenced and Corrupt Organizations Act, hence they operated as outlaw companies since 1953. The DOJ also accused the companies of putting up advertisements that showed nicotine was not an addictive substance while they controlled the addictive nature of cigarettes to capture more and more customers. At the end of the assignment the following objectives will have been achieved. A good knowledge base and understanding on the various business ethics and moral issues. The duties of businesses to consumers and the theories involved. Also, discussion of other related theories to duties of organizations to consumers. To develop an international understanding of various business concepts by knowing the various norms and ethics of business involved. Be able to ethically reason when handling business related problems. Organization Duties to Consumers: It is worldwide accepted that businesses premises around the world cannot exist without the consumers. Thus organizations have an important role in ensuring it gives its consumers better and quality goods and services. They should avoid various malpractices like wrong labeling of products, untrue advertisements that are extremely exaggerated, adulteration (that is producing inferior products), and hoarding (hiding goods to create a shortage so as to raise the commodity prices). Consumers also have a right to demand better services and quality goods. The consumers need to be protected also from various businesses malpractices. Notably organizations which take consideration on the consumers usually prosper much than those who do not (Derry et al, 1989). The consumer has the right to choose whether to purchase or not to purchase a given product before examining it. Consumer interests usually depend on the consumers and not the producer companies. Thus it is essential for all consumers to weigh the options of their actions when purchasing in shunning from doubtful producer or services. The sellers actual responsibility is to ensure due law and ethical issues are followed to the latter. Hence, whether a consumer chooses to or not to purchase a product or service depends on business ethics. Organizations and consumer relations face a lot of challenges when upholding the ethical issues in the marketing activity. Some o these activities include: product policies which entails the safety of products and ability to serve the intended purpose; thus consumers have the right to harmless and effective products. Market communications such as untrue, misleading claims, intrusiveness and reinforcing stereotypes; consumers have the right to get accurate and true information, and their privacy not infringed (Darke & Robin, 2007). Pricing problems like hiking prices and deceptive pricings; consumers have right to fair pricing. Product distributions face challenges like bribery, slotting fees and bad buyer-seller relations; consumes posses the right to engage in markets. Marketing techniques of producers sometimes targets vulnerable consumers and excludes others; consumers have right to be free from distribution and basic freedom. Market research should be conducted in a way which does not infringe into the privacy of the consumers (Adair et al, 1985). The organization duties to consumers discussed above show that tobacco companies broke the ethical issues involved in business environments. Their production of unsafe products means they failed to follow the guidelines involved in product policies. Their integrated marketing advertisements were misleading of the safety nature of their product. Their targeting of children was an ethical since this kind of consumers are vulnerable to many deceptions since; they have no sufficient information on how safe the product is, they can be easily confused, and too young to formulate proficient autonomous decisions. These companies focus was to make profits and ignored the well being of its consumers. They ignored the fact that their posses a social responsibility. Also, to be able to prevent possibilities of damages caused by their actions of producing harmful products knowingly (Carson et al, 1985). Theories related to the Topic: Corporations around the world have an obligation of providing corporate social responsibility (CSR). CSR cover economical, ethical, philanthropically and legal responsibilities. The stakeholder theory of the firm is founded under two basic ideologies: the code of corporate rights (the corporation has a mandate not to interfere with other people rights), and the code of corporate effect (a company is self liable for the effects of its actions to others). From the stakeholder theory three other theories have been deduced fro it according to (Donaldson &.Preston, 1995). They are: Normative stakeholder theory (describes why it is necessary for corporations to mind its stakeholder’s interest), deceptive stakeholder theory (tries to see if corporations are actually considering or acting on stakeholder’s interest), and the instrumental stakeholder theory (weighs the benefits of corporations measures to secure stakeholder’s interests). Other emerging theories are corporate accountability, corporate transparency and corporate citizenship. The normative ethical theory sets what is wrong or right for different applicable situations. It is made up of traditional and contemporary ethical theories. Traditional ethical theories are absolutists while the contemporary ethical theories take a relativistic approach. Ethical absolutism are the superficially, collectively acknowledged moral principles. Here the acts of right or wrong are objective traits that can be realistically determined. Whereas, ethical relativism explains morality is circumstance reliant and prejudiced. The relatives argue that there is no measure in the world to rationally determine what is right or wrong. But it only falls in the hands of the decision maker and their cultural background. The principles of absolutism and relativism are used in combination. This is achieved through the principle known as pluralism which tries to attain a middle ground between the two theories. Pluralists readily accept diverse moral views and ideals in various situations in the community so as to reach an agreeable consensus (Crane & Matten, 2003). Contemporary ethical theories shift our understanding of right and wrong to be upon the people, person who makes decisions, and human capital. Virtue ethics suggests that good actions are performed by person’s of good virtue character. Feminine ethics developed from the hypothesis that women and men have different ways of carrying out with social life especially having differing ideas on how ethical problems can be solved. The males have embraced traditional ethics which championed for equality, objectivity and consistence in application of rules and values. The female approach portrays an individual to be entangled in a string of global relations. Hence the female approach can be termed to be harmonious, compassionate, sound social relationships, one that cares for one another and that which tries to minimize causing harm to others above all conceptual values (Fisher & Lovell , 2003). Discourse ethics purpose is to provide a solution to some ethical problems through rationally reflecting on the experiences that the relevant participants go through. Post-modern ethics is concerned on more than the rational view in emotional responses to moral issues towards others. Since the inner feelings are sometimes influenced by the situations. It links between morality and rationality which is a common feature of traditional ethical theories (Donaldson, 1982). The Descriptive ethical theory explains why different organizations arrive to certain ethical decisions and the factors which influence the final decisions. This defers with the normative theory which tells us what organizations should do while the descriptive theories tell us what organizations actually do and their reason behind it. A good ethical decision process follows the following four stages: the first is to recognize the moral issue. Then be able to give a moral judgment on the issue; meaning knowing the right thing to do. This is followed by having the right intention to perform the action. Finally, implement the best course of action (Fisher & Lovell, 2003). The process of making ethical decisions is affected by individual and situational factors. Individual factors bring out distinct characteristics that the decision maker posses such as those born with i.e. age and gender and those obtained from experience and socialization i.e. education, personality, culture and values. Situational factors refers to the specific perspective and features that determines if a person will make an ethical or an unethical decision like a work context (e.g. job roles, reward systems, organizational culture) and those linked with the issue itself (Mclntosh et al, 1998). Lately a lot of organizations are trying to shape how government policies should be made through activities such as lobbying, funding politicians, and even bribery. Business ethics has become a fundamental issue in corporations’ relations with the government due to this. The government has a duty to set acceptable policies in the business environment to ensure the rights of the consumers are not violated by issuing licenses to business enterprises. Laws are tools which regulate how businesses conduct their duties with the stipulation of what is right and wrong and usually include; models, objectives, tactics and government policies. Government regulations intend to expound on the law by spelling out principles of conformity and sanctions for digressions. The government as a stakeholder in businesses has a role to its citizens and its own interests. To its citizens it has the duty to restrict unlawful businesses and enable law abiding businesses. For its own interests it usually dependable on businesses and at the same time competing with other business. Ethical issues such as legitimacy, accountability, and mode of influence usually arise in relations between business and the government. The society and business are linked by the government. For example, the government taxes business, does job investments while developing regulation policies to protect the interests of its citizens. The results are a stable profitable economy for businesses while the society gets satisfaction of the products and services received. The tobacco companies violated most of these ethical theories discussed. They failed to provided the due well social responsibility they have to the society by allowing unsafe products to sell in the market for over 50years. Conclusion and Findings: Business ethics usually tries to determine what is right and wrong while law is set of rules and guidelines that propagate for a certain acceptable standards of behavior. Hence ethics is not law or the opposite of law since law does not distinguish between all rights and wrongs. Business ethics starts where the law ends. Contrary not all that is unlawful is unethical and vice-versa. With the onset of globalization and internationalization of business the triple bottom line of sustainability has emerged as a major concern in business. Due to changes in technological and political factors management has shifted paradigm from traditional to contemporary in the global economy. From the case analysis it is seen that some producers knowingly produce harmful products since their main objective is to gain profits. Little considerations are taken to protect the consumer’s basic rights. They suppress and frustrate any undertakings that try to unravel the truth behind their products at all costs. Although they perfectly understand the effects of products they produce they become ignorant and carry on with captivating advertisements which capture audiences of all ages especially emphasizing on youths which make the bulk of the market (Dworkin, 1977). Organizations should uphold ethical measures and good moral principles in their daily duties of providing goods and services. Following the set guidelines and rules of various business ethical theories will help ensure consumer rights are not infringed upon. Essential for managers in organizations to learn on the various business ethics tools of management so as to make ethical decisions on some problems. The study of business ethics should be well spread across all disciplines such as in relation with the stakeholders, the government, the civil society, the suppliers and competitors, and contemporary management tools. References: Adair, J. G., Terrance, W.D. & Lindsay, R.C. (1985). Ethical Regulations and Their Impact on Researh Practice. American Psychologist , 40, 59-72. Carson, T.L., Richard, E.W. & James, E.C. (1985). An Ethical Analysis of Deception in Advertising. Journal of Business Ethics , 4, 93-104. Crane, A. & Matten, D. (2003). Business Ethics: European Perspective. Oxford: Oxford University Press. Darke, P.R. & Robin, J.B. (2007). The Defensive Consumer: Advertising Deception, Defensive Processing, and distrust. Journal of Marketing Research , 114-127. Derry, R. & Ronald, M.G. (1989). Ethical Theory in Business Ethics: A Critical Assessment. Journal of Business Ethics , 8, 521-533. Donaldson, T. & Preston, L. (1995). The Stakeholder Theory of the Corporation. Academic Management Review. , 20 (1), 65-91. Donaldson, T. (1982). Corporations and Morality. NewJersey: Prentice hall. Dworkin, R. (1977). Taking Rights Seriously. Cambridge, MA: Havard University Press. Fisher, C. & Lovell, A. (2003). Business Ethics and Values. Harlow : Prentice hall. Jones, G. & George, J. (2003). Contemporary Managgement (3rd Edition ed.). McGraw-Hill. Mclntosh, M., Leipzigger, D., Jones, K. & Coleman, G. (1998). Corporate Citizenship: Successful Strategies for Responsible Companies. London: financial Times. Read More