Ethics and Professional Conduct - Term Paper Example

? Ethics and Business Ethics and Business “Ethics is the branch of study dealing with what is the proper of action for man”(Landauer and Rowlands, 2001). Strict observance of ethical or moral principles in all life segments is extremely important for the human kind to lead the world towards progress. “Being ethical is not the same as doing whatever society accepts" (What is ethics, 2010). In other words, the right of one society may not be the right of another society. For example, Muslims can have more than one wife whereas Christians and other religions advocate only one wife for a person. In short, ethical principle differs in different societies. Under such circumstances, it is difficult for a society filled with Muslims and Christians to standardise ethical principles. Business is one area in which ethical principles have relevance. The ultimate objective of many of the business organizations in this world is to make as much as profits possible using all the available means. Such greedy business organizations sacrifice ethical principles in business to generate profits. However, it is difficult for such organizations to survive in the business world in the long run. This is because of the fact that current consumers are valuing and respecting the reputation of the organization more while they take any purchasing decisions. Modern consumers respect organizations which demonstrate their social responsibility. In order to sustain business in the current heavily competitive business world, it is necessary for the organizations to give something back to the community in which they operate. Crane &Matten (2007) pointed out that “There appears to be good reason to suggest business ethics as a phenomenon, as a subject, but not as an oxymoron” (Crane &Matten, 2007, p.5). Business and ethics are not all contrasting each other. In other words, it is possible to do business in an ethical manner. Business ethics is important in decision making, personal integrity, social responsibility, law etc. This paper analyses the importance of ethics in business. Business Ethics as Ethical Decision Making  One of the fundamental handicaps of business is its misguided tendency to view ethics and business as if they can be treated as separate or separate-able. Business cannot and should not be disentangled from ethics and viewed in isolation any more than operations or marketing can or should be considered without regard for the products or services being inventoried or sold. The economics should not be paramount to ethics in business; if anything, ethics should be paramount to economics (Elm & Radin, 2012, p.314). Business is part of human life and hence it cannot be viewed in isolation with our social life. In other words, whatever, the ethical principles one may follow in his personal life, should be followed in his professional or business life also. So, whatever the decisions taken in business should be in line with the ethical principles. A business person cannot follow one policy in his personal life and another policy in his business life. It should be noted that most of the parameters we come across in business may come across in our personal life also. Therefore whatever the ethics and morals we follow in our personal life should be followed in business life also. Manpower is one of the major resources needed for business. Unlike machines, man has emotions and feelings. So, a business person cannot treat manpower and machine power in the same manner. He should treat manpower separately and machine power separately. He cannot ask an employee to work continuously just like a machine. Same way, in an organization, different employees may have different capabilities. It is difficult for a business person to ask all his employees to demonstrate a particular level of efficiency. In other words, a business person should take decisions based on the circumstances and humanitarian considerations. In short business decisions should be taken based on moral reasoning. “Justice, or ‘‘fairness,’’ was the central moral principle of higher levels of moral reasoning” (Elm & Radin, 2012, p.314). Unethical decisions harm the decision makers themselves as well as others, whereas ethical decisions have the opposite effect. Ethical decision making in business is a process in which reasoning (conscious processing) and intuition (subconscious processing) interact through forming, recalling, and applying moral principles necessary for long-term success in business (Woiceshyn, 2011, p.311). It is not necessary that a business person may take same decisions all the times when facing problems of same calibre. Even if the problem remains the same, the circumstances could be different. For example, a business person may ask the employees to work overtime when the workload increases during recession times. On the other hand, on all other occasions, he may try to recruit new employees when workload increases. There is nothing ethically wrong in asking the employees to work overtime during recession times, since it is the duty of the employees to help the employer during difficult times. It should be noted that the organization cater the needs of both the employer and the employee and hence it is the duty of both the employer and the employee to work in favour of the organizations all thr time. According to Elango et al.(2010), “both individual ethics (IE) and organizational ethics (OE) influence ethics intention (EI). Ethics congruence is also discussed as a positive influence. Younger managers are more influenced by OE than older managers” (Elango et al., 2010, p.543). Younger managers may not have the maturity to identify the importance of IE. They value OE more than IE. In fact they wanted to make an impression in front of the management. On the other hand older managers know the importance of IE along with OE. They know very well that they are the bridge between the employee and the organization and hence they need to consider both OE and IE equally. Business Ethics as Personal Integrity Mclarty et al, (2009) mentioned that “The concept of Professional Ethics is partly comprised of what a professional should or should not do in the work place” (Mclarty et al, 2009). As in the case of personal life, personal integrity plays a vital role in business life also as far as a business person is concerned. In other words, a person who sets high values in his personal life may try to implement it in his professional or business life also. In a heavily competitive business world, it is difficult for a professional to keep personal integrity in all his professional actions. “Professional Ethics concerns one's conduct of behaviour and practice when carrying out professional work” (Davison & Kock, 2004). There are plenty of situations in which a person forced to sacrifice his personal ethics for the betterment of his organization. For example, a sales person can never say something wrong about the product he is selling even if he knows the defects of the product. It is his duty or responsibility to sell the products of his organization at any cost. No consumer will purchase that product if he reveals the defects of that product. In short, he is deliberately trying to cheat the consumer by selling the defective product. On the other hand, while selling some of his personal properties, he can reveal the defects of the properties also since that sale is only a personal matter. Business Ethics as Social Responsibility  Many consumers and social advocates believe that businesses should not only make a profit but also consider the social implications of their activities. Social responsibility is a business’s obligation to maximize its positive impact and minimize its negative impact on society. Although many people use the terms social responsibility and ethics interchangeably, they do not mean the same thing. Business ethics relates to an individual’s or a work group’s decisions that society evaluates as right or wrong, whereas social responsibility is a broader concept that concerns the impact of the entire business’s activities on society (Business Ethics and Social Responsibility, n.d. p.39). All the available resources in this world are equally owned by the people. There is no point in arguing that somebody has better share since they own more than what others have. An organization operating in a community cannot use only its own resources. It will definitely use some community resources. For example, while operating in a community or society, Coca Cola and Pepsi like soft drink manufacturers exploit the underground water resources of that community. As a result of that people in that society may face drinking water shortage. Coke or Pepsi can never argue that the underground water resources are not private and hence anybody can use it. In fact these resources belong to the community. So, it is duty of these companies to give compensation for the underwater resources in a particular community. “Some businesspeople argue that there is a symbiotic relation between ethics and business in which ethics naturally emerges from a profit-oriented business” (Fieser, n. d). It is difficult to agree with the opinion of Fieser, especially when we consider the recent Enron scandal. Two former Enron CEOs, Ken Lay and Jeff Skilling, were found guilty on all counts of conspiring to hide the company’s financial condition. The judge in the case said the defendants could be found guilty of consciously avoiding knowing about wrongdoing at the company. Many other top executives including Andy Fastow, the chief financial officer, were found guilty of misconduct and are serving time in prison (Business Ethics and Social Responsibility, n.d. p.38). It should be noted that Enron was believed to be a socially committed company until recent times. Many people thought that it does business in an ethical manner. However the above incident surprised many people. There are plenty of other prominent companies which follow the footsteps of Enron. However it is difficult to identify such companies. In short it is difficult to argue that ethics and social commitments may evolve naturally from a company. “Honesty is an essential component of trust. Without trust an organization cannot function effectively” (ACM Code of Ethics and Professional Conduct, 1992) Ethics and the Law  One might suppose that where law is largely absent, behaviour is pretty bad. Yet it turns out to be nearly other way around. Wall Street scandals arose in most intensely regulated industries. Enron and WorldCom to name only the most widely known- involved issues of finance and accounting which are largely rule based disciplines (Michael, 2006, p.2-3). The above facts clearly suggest that ethics could be absent even in strongly regulated and controlled industries. In fact, ethics is entirely different from law. Laws are written all the time whereas there is no written definition for ethics. Since laws are formulated by the government or the public bodies, it is easy to implement it. However, forcing somebody to follow ethical norms in business is impractical. Breaking of laws is punishable whereas braking of ethical practices is not punishable most of the times. Ethics as Practical Reason In certain cases, ethics can act as practical reason. Suppose a reality TV program producer wants to shoot the mannerisms of an alcoholic person. Imagine he is secretly following the alcoholic person. Suppose that person try to drive his vehicle and the program producer realises the danger in allowing him to drive in that condition. It is easy for the producer to allow him to drive and shoot the accident which may occur. He may get complement or acceptance from his employer for shooting such real incidents. However his personal ethics may force him to prevent that person from driving. Here the alcoholic person can sue the program producer for interfering into his personal matters. Law can definitely punish the program producer since he doesn’t have the authority to block a person from driving. However, the producer can argue that his intention was to prevent the person from facing an accident. Conclusions Business ethics is one of the much needed parameters for the sustainment of business. Current consumers are interested in socially committed companies and they avoid the products of companies which have bad reputation. Profit making was the only objective of business in the past; however at present community servicing is also included in the objectives of business. References ACM Code of Ethics and Professional Conduct, 1992, Retrieved from http://www.acm.org/about/code-of-ethics Business Ethics and Social Responsibility, (n.d.) Retrieved from http://highered.mcgraw-hill.com/sites/dl/free/0073511722/620358/ferrell7e_chapter2.pdf Crane A. & Matten, D (2007), Business Ethics, Publisher: Oxford University Press, USA; 2 edition (March 1, 2007). Davison R & Kock N. (2004), Professional Ethics, Retrieved from http://www.cb.cityu.edu.hk/is/research/ISWorld/ethics/index.htm Elm, D.R. & Radin, T.J. (2012). Ethical Decision Making: Special or No Different?. Journal of Business Ethics (2012) 107:313–329. DOI 10.1007/s10551-011-1041-4 Elango, B.; Paul, K; Kundu, S & Paudel, S. (2010). Organizational Ethics, Individual Ethics, and Ethical Intentions in International Decision-Making. Journal of Business Ethics. Dec2010, Vol. 97 Issue 4, p543-561. Fieser, J. (n. d), Business ethics. Retrieved from http://www.utm.edu/staff/jfieser/vita/research/Busbook.htm Landauer J and Rowlands J (2001). Retrieved from http://www.importanceofphilosophy.com/Ethics_Main.html Mclarty P., Mcburney V., & Stevetuff (2009), Professional Ethics, Retrieved http://it.toolbox.com/wiki/index.php/Professional_Ethics Michael, M.L. (2006). Business Ethics. Retrieved from http://www.hks.harvard.edu/m-rcbg/CSRI/publications/workingpaper_19_michael.pdf What is ethics (2010). Retrieved from http://www.scu.edu/ethics/practicing/decision/whatisethics.html Woiceshyn, J. (2011). A Model for Ethical Decision Making in Business: Reasoning, Intuition, and Rational Moral Principles. Journal of Business Ethics. Dec2011, Vol. 104 Issue 3, p311-323. Read More