Morals and Ethics in Organisations - Essay Example

So, the system actually discourages proper ethics in business. Further complications are found in the hierarchical structure of businesses, the availability of corporate deniability and the tendency for corporation members to conform to established behaviour. Even if we could establish a flawless definition for ethical behaviour, and create a useful method for measurement, some way to harmonize business needs and ethical needs would have to be developed, and the rules would have to be agreed upon by all those in power.

Perhaps the most practical method for encouraging ethical behaviour by organizations would be to make everything transparent. It was posed that the ,”The social responsibility of business is to increase its profits”, in Contemporary Moral Problems, (White 2000 233-238) but this attitude is becoming less and less popular as corporations are being held accountable for their actions. In times past the damage done by business was more localized and much less widely known. In today’s world mass media spreads the knowledge of wrongdoing like a brushfire.

More than this, the damage, as in the housing crisis in the US, can impact business and government globally. Not only were the companies involved behaving unethically, but their bonus systems promoted such behaviour, since sales increased bonuses without regard to whether or not the buyer was able to pay. When too many were unable to pay, the US government guarantor organizations, Fanny May and Freddie Mac, were unable to cope with the volume. They had to be rescued by a government emergency program, and the effects were not localized at all, but were felt around the world (Gjerstad and Smith 2013, 437).

The resulting US recession had echoes in all the major markets, including China, the UK, and the EU (Holt and Greenwood 2012, 363). The resulting foreclosures in the US damaged local neighbourhoods, depressed prices and increased crime (RW.ERROR - Unable to find reference:10926). Unemployment rose, causing more people to be unable to pay their mortgages and able buyers decreased further. Growth in housing markets around the world ended abruptly following the US crisis and global markets were profoundly negatively impacted (Scanlon, Lunde, and Whitehead 2011, 23).

Because people around the world are so interconnected now and global markets and political and economic ties between nations are massive and deep, and all of these react almost instantly to each other, it has become critically important that organizations should behave ethically, both for their own good and that of the people of the world. Historically, business has not been very moral and management was based solely upon profit and rewarded by that standard, making it actually counterproductive individually for managers to behave ethically (Scott 2002, 33).

Even if organizations continue to view ethics as being based upon what is good for the corporation, it is shown now that the corporate good is much more closely tied to the good of the whole range of stakeholders (Donaldson & Freeman 1994; Calton & Lad 1995). More transparency might be the way to develop ethical businesses without resorting to laws or prohibitions. If it affects the bottom line businesses will make change. All stakeholders should be involved, as each group has a different agenda and the bottom line is not