Reason Why Ethical Issue is Important for Business Management - Essay Example

Formal Writing Assignment #3: Business Ethics Introduction In various professional endeavors, practitioners are guided to observe explicitly defined codes of ethical behavior that provides detailed guidelines needed in decision-making processes. In the field of business management, for instance, conformity to ethical standards is given paramount importance. There is an association for business management practitioners, known as the Association of Business Process Management Professionals (ABPMP) International that published a code of ethics and standards of conduct were values and principles of integrity, honestly, equality, and justice are specifically noted as guide current and future behavior. Within the business setting, there are various ethical issues that range from conflicts of interests, bribery, accepting gifts, disparagement, transparency, romantic relationships in the work settings, to name a few. In this regard, the current essay aims to present a particular ethical issue that pertains to evaluating the possibility of expanding one’s business in a country where bribery was noted to be a regular and normal part of doing business. The paper will therefore briefly provide a description of the ethical issues; prior to providing the rationale why this ethical issue is important to be addressed in the field of business management. In addition, the analysis of why this in an issue right now would be provided; in conjunction to identifying and evaluating who is involved. Likewise, the position of the business profession on bribery would be disclosed. Finally, the proposed steps that professional governing bodies should take to prevent accidental or intentional misconduct regarding briberies would be expounded. Description of Ethical Issue The ethical issue was searched from a case published in the Markkula Center for Applied Ethics and written by Michael L. Hackworth and Thomas Shanks. As disclosed, an organization, Pegasus International Inc. is reportedly a “leading manufacturer of integrated circuits (chips) and related software for such specialty markets as communications and mass storage, as well as PC-based audio, video, and multimedia” [Hac12]. In line with its strategy for global expansion, the organization’s CEO, Tom Oswald, and other managers of various divisions in the organization, have allegedly evaluated the possibility of expanding through offering their products and services in China. However, as noted, to get their licenses to do business with them, Chinese approving officials normally require pay-offs or bribes. The possibility of giving pay-offs have been known to be unethical and counter the organizational values of integrity and intellectual honesty and the CEO openly acknowledged being uncomfortable with the need to provide pay-offs. In this regard, he sought the opportunity loss if their organization would not push through doing business with China and the information provided by the Wireless Division Manager was: “It will be huge not to do business in all the countries expecting payoffs. China alone represents easily $100 million of business per year” [Hac12]. Given that the company has had the reputation of doing business that adheres to their values and with strict adherence to ethical standards, the CEO is in a dilemma as to what decision should he make in this situation. Reason Why Ethical Issue is Important for Business Management The ethical issue of pay-offs or bribery is a federal offence in the United States and is punishable by the imposition of a stipulated fine in monetary amount or a corresponding term of imprisonment. As explicitly defined under the General Federal Bribery Statute: “The General Federal Bribery Statute punishes the offence of bribery in the U.S. According to 18 USCS prec § 201(b), whoever directly or indirectly, corruptly gives, offers or promises anything of value to any public official with intent to influence that person’s official act will be fined for the offence of bribery. The punishment prescribed by the statue is a fine of an amount not more than three times the monetary equivalent of the thing of value, or imprisonment for not more than fifteen years, or both” [USL10]. There are also provisions in the Foreign Corrupt Practices Act (FCPA) or Ant bribery provisions that corroborate and detail five elements that must be present to perpetuate and charge violators: who, corrupt intent, payment, recipient, and business purpose intent [Unind3]. It is therefore important for business organizations to adhere to these laws to ensure that the offence of bribery would never be contracted to ensure fair and honest dealings of business transactions with all parties at all times. Analysis of Why this is an Issue Right Now The issue of bribery is an important issue right now because there are other countries, such as China and Germany, which have acknowledged bribery as part of their national culture. In a news article written by Wayne (2012) entitled “Foreign Firms Most Affected by a U.S. Law Barring Bribes” it was revealed that “Justice Department officials argue that it is in the United States’s interest to prosecute corporate bribery wherever it takes place. American executives have long complained that they are at a disadvantage when competing for overseas business against bribe-paying foreign competitors. Department officials say that by prosecuting foreign companies, they are seeking to level the playing field — and to end the grumbling from American executives” [Way12]. Apparently, until contemporary times, there are still some American and foreign executives that are aptly prosecuted as found to have violated these laws. It was revealed that “American and foreign executives involved in the bribery scandal faced criminal sentences. In February, Halliburton’s former chief executive, Albert J. Stanley, was sentenced to two and a half years in prison for his role in the scheme” [Way12]. Analysis of who is Involved Should the CEO and his managers decide to go through with expanding their business operations in China and to give pay-offs, under the provisions of who would be indicted under the FCPA are as follows: “any individual, firm, officer, director, employee, or agent of a firm and any stockholder acting on behalf of a firm. Individuals and firms may also be penalized if they order, authorize, or assist someone else to violate the anti-bribery provisions or if they conspire to violate those provisions” [Unind3]. This means that the CEO, Tom Oswald, the managers involved, and even the agent who is supposed to represent their organization in China and to secure the license in their behalf. Position of the Profession on the Ethical Issue As explicitly indicated, the profession and even the federal government have instituted laws (FCPA) that bar bribery in whatever possible situation. Criminal and civil sanctions are noted: “corporations and other business entities are subject to a fine of up to $2,000,000; officers, directors, stockholders, employees, and agents are subject to a fine of up to $100,000 and imprisonment for up to five years” [Unind3] and “a civil action for a fine of up to $10,000 against any firm as well as any officer, director, employee, or agent of a firm, or stockholder acting on behalf of the firm, who violates the anti-bribery provisions” [Unind3]. Steps the Profession has taken to Prevent Accidental or Intentional Misconduct The imposition of the FCPA and anti-bribery provisions that clearly stipulate sanctions for violating ethical codes of integrity, honesty, fair and equitable dealings with organizations has set the needed policies and disciplinary action to prevent any accidental or intentional misconduct by forging into alliances with other organizations (local or foreign) through payoffs or through bribery. This therefore acknowledged how the ethical standards are given paramount importance in dealings across various ventures and across international shores. As such, given these laws and provisions, the CEO of Pegasus International Inc., Tom Oswald, should know better than even considering contracting business with China as a strategy for organizational growth. If this option would be taken, he and his organization would be subjected to various fines, criminal and civil sanctions over and above the $100 million per annum that they envision to realize. Works Cited Hac12: , (Hackworth and Shanks par. 3), Hac12: , (Hackworth and Shanks par. 10), USL10: , (US Legal par. 2), Unind3: , (United States Department of Justice), Way12: , (Wayne par. 17), Way12: , (Wayne par. 23), Unind3: , (United States Department of Justice 2), Unind3: , (United States Department of Justice 5), Read More