Business Ethics - Definition, Overview - Essay Example

?Business Ethics ment of view The people of the twenty first century are living in the world of innovations, with the growth of the economy of the world and the openings of free markets. New technologies are bringing challenges to the economy by increasing both opportunities and constraints. With the growing challenges for the society, more institutions and nations are now working together to encourage human rights, protect individual property rights, the rule of the law and to protect the environment. The social entities have rewritten or reframed the roles and responsibilities of the businesses keeping parity with recent changes and urgency. Thus, it is expected that the modern business will work for achieving growth and success for both the individual company and their communities (Business Ethics). The social and environmental thinking of business not only encompass a legal duty but also the long-term success of the business. Argument Businesses are operated within the society using the resources from and depending on the society for the proper functioning of the business operations. Therefore attending to the welfare of the society is an obligation or a responsibility on the part of the business organizations. Thus, the social responsibility of business forbids businesspersons in adopting unfair policies that may maximize the profit of the business but harm the interest of the society. Welfare activities on the part of the business organization gain benevolence and reputation. Business carrying out their duties properly can avoid government regulations. The employees are more satisfied if a good working environment is provided with some additional facilities. This in turn increases their productivity and hence facilitates the business. Last but not the least, providing quality products to the consumers at competitive prices is also necessary in the days of increasing consumer awareness about their rights. The integral development of human being is related with the obligations that may arise because of the relationship of man with the environment. Business or the material environment has been taking its toll on the environment and questioning the sustainability of future generations with the increasing pollution, new illnesses and its destructive capacity. If these are not immediately controlled then it may create immense problem for the entire human class. The problems of the ecological and environmental crisis cannot be looked upon distinctly from the notions of development. The obligations of the business towards the environment include consideration of the environment in the decision-making processes and thereafter supervise the activities. There are obligations including monitoring of proper discharge of water. Proper insurance should be done against environmental damage. The environmental taxes and the charges should be paid properly. The land that is being used for the construction purpose should follow proper planning norms and the environmental legislation unit of the country should approve the product. According to the definition of sustainable development, a development is said to be sustainable if the present generation can provide the future generations with at least the same benefits that it inherited from the past generation if not more. However, if the environmental degradation continues then the future generation will not be left also with their basic requirements for a proper living. Since the natural resources are scarce, the use of those resources by the business organizations in their production should be limited and handed in a proper manner to reduce misutilization. Negligence or refusal on the part of a few people in handling the stewardship of the environment in a responsible manner may invite the larger population to experience ‘increased hardship’. The creation of the God is for all human beings and generations and hence needed to be shared equally by the humanity as a whole. The supplies of certain natural resources are gravely being endangered by the environmental abuse and not only the current generation but also all generations to come will be affected due to this. Official policies that lack foresightedness and myopic economic policies often become the reason behind environmental degradation that is a serious threat towards creation (Business Ethics; Message of his Holiness). Since there is a moral outcome of every economic decision, so every economic decision needed to be taken with respect to the environment. The social and the environmental cost, which is an essential part of the total cost incurred in using the natural resources, should always be considered for the sake of the protection of these scarce resources. The business organizations should work accordingly to the clearly defined rules to protect the environment and safeguard the natural resources. These decisions will also be fruitful from the economic point of view. There is more need of taking these decisions to keep in view the future generation and the poor population of the world. The present business class is obliged to the future generation in providing them the benefits that they inherited and gained from the work or labor hours of the contemporaries. The cost of misutilization of the natural resources by the present generation should not be borne by the future generation. Business should use the natural resources in such a way so that it does not create any negative impact on the living creatures, the human society of both the present and the future. Universal destination of goods should not be interrupted because of the protection of private properties. Moreover, within the same generation the more industrialized world is marginalizing the use of the natural resources by the developing nations. The functioning of the industrialized countries is responsible for the present economic crisis. This necessitates the emerging economies of the world and the less developed countries to responsibly adopt significant environmental policies. Business should emphasize on reducing the consumption of energy and increase their efficiency by encouraging a relatively sober lifestyle. Moreover, researchers should emphasize on the use of energies with lower impact on the environment. There is also the need of redistribution of resources to enable the resource lacked nations utilize the necessities. Promoting integrated human development is linked with combating economical degradation. Therefore, there is the need for protecting the creation of the earth through proper management of the resources of the earth that should be coordinated internationally. Attention need to be paid to the global problem of Water that is the most necessity for living and to research on the potential of the solar energy so as to exploit it properly. Business should consider suitable strategies that will help in the rural development, proper management of forest, waste control and to use climatic changes in eradicating poverty (Business Ethics; Message of his Holiness). Business should not only concentrate on attracting the consumers but the agricultural and industrial production should be increased in order to satisfy the primary needs of the entire society. Technology should be considered as the force that helps in fulfilling the material limitations of the world and as a force that will reinforce the link between the human society and the environment. The pattern of consumption and production need to be revised so as to make it sustainable both from the economic and social point of view. The business organizations should now forget the selfish individualistic interest of profit maximization and concentrate on the development of the society as a whole in order to spread ecological responsibility. (Business Ethics; Message of his Holiness) Analysis According to Milton Friedman the ultimate motive of business is profit maximization and there are no social causes associated. John Mackey in criticizing his view argued that there are social responsibilities associated with business. According to him, there are different stakeholders of business like the consumers, the employees of the organization, the suppliers of the factors of the production and the community as a whole. Each of these groups has different needs and desires for participating in the business. Profit can be optimized by concentrating on increasing the satisfaction of the consumers and not just maximizing profit. There is the need for the organization to work on solutions that will meet the need of all and not merely the shareholders or the producers. A good business has its responsibility towards the consumers, the employees, and the community as well as to the environment. Similarly maximizing the profit of the shareholders also falls as responsibility of the business firm. The entrepreneurs and not the investors take the decision of the business and if the investors or the shareholders do not agree with the conditions of the business, they are always free to sell their shares. Thus, maximization of profit cannot be the sole motive behind the decision of the business. According to Mackey, most successful business firms consider the demand of the consumers as their priority than the investors. This is because if the consumers are satisfied with the products then the demand for the commodity will likely to increase and hence the revenue. Friedman later argued that the primary objective of profit maximization is an end in itself when viewed from the private perspective but it is the mean to achieve social well-being. According to him, each resource are used for a maximum gain from it and used more efficiently when combined with other resources. On the other hand according to some other economists maximizing profit can also be the mean to fulfill the demands and the needs of the other stakeholders. Higher profit boosts up growth which increases income of the people, that could increase their standard of living and hence again the demand for the commodity which will ultimately increase the profit. Thus the process follows a circular motion and the welfare of a class of stake holders depend on the functioning of the other and hence the society as a whole gains from their individual gain only if they are well connected. Thus, a well-established business can contribute to the welfare of the society if it is properly maintained. Business can contribute to the social environment by providing goods and services, providing employment opportunities and hence increase the standard of living of people through increased opportunities. The only need for these benefits is a proper balancing between the various responsibilities of the business in balancing the welfare and gain of every class of the stakeholders and hence resulting in the welfare of the society as a whole. (Rethinking the social responsibility of Business) Conclusion I had once witnessed an incident where I saw a man dressed in working uniform watering some small plants within the boundaries of a private bank. The plants were just sown along the boundary. It felt good to see that the corporate houses were becoming sensitive to the depletion of greeneries along with increasing construction in the urban areas. The land area used up could have been covered by trees, which in turn helps in maintaining atmospheric hygiene. This brings out their obligation to work towards creating some green spaces within the boundary, which contributed to the aesthetic sense as well as act as a demonstration of environmental responsibility. The business decisions when related and taken in coordination with the environmental decision leads to the development of the society and also induces long term growth opportunities for the firm itself. Environmental degradation can be the cause of destruction for the entire society and also for the upcoming generations and hence the use of the resources should be handled properly. The ultimate fact is that economic decision cannot be taken separately from environmental decision in order to achieve social well-being and sustainability. References Business Ethics, U S department Of Commerce, International Trade Administration, 2004, 7 March 2011, from: http://trade.gov/goodgovernance/adobe/bem_manual.pdf Message from His Holiness, If you want to cultivate peace protect creation, For the celebration of the world day of peace, 1st January, 2010, 7 March 2011, from: http://conservation.catholic.org/if_you_want_to_cultivate_peace.htm Rethinking the social responsibility of business, reason.com, October 2005, 7 March 2011, from: http://reason.com/archives/2005/10/01/rethinking-the-social-responsi Read More