Can Ethical Behavior Really Exist in Business - Essay Example

?Can ethical behaviour really exist in business? Introduction It is a world of competition that one observes today and there are competitions among firms and also among the employees of a firm. A healthy competition is desirable and beneficial for both the firms and the employees. But an unethical way of behaviour is observed in the functioning of many firms and employees. Certain firms focus merely on the financial benefits and ignore the ethical side of business. It is also true that the workers of many firms behave unethically and one could identify various reasons behind such actions. This paper is an attempt to analyse the concept of ethical behaviour and focus on the possibilities for ethical behaviour to exist in a business. The meaning of business ethics An attempt to answer the following question could help us to understand the meaning of business ethics: What is the relationship between ethics and morality? According to Archie B. Carroll and Ann K. Buchholtz “ethics is the discipline that deals with what is good and bad and with moral duty and obligation. Ethics can also be regarded as a set of moral principles or values. Morality is a doctrine or system of moral conduct” (Carroll & Buchholtz 242). It is obvious from the definitions that ethics and morality are more or less similar concepts and both these terminologies can be used as substitutes for each other to analyse the right and wrong behaviour in business. Business ethics could thus be observed as linked with the right and wrong behaviour and practices which take place in a business setup. The existence of a business is dependant on the nature of relationship between customers, employees, investors, shareholders, managers and directors. It is the responsibility of director board of a company to ensure the functioning of the organisation in a legal and ethical manner. But in most cases a joint effort is observed from a majority of people who take part in a business activity to facilitate the acceptance of an unethical conduct when such an act is identified (Ferrell, Fraedrich, & Ferrell 30). Therefore one can never ignore the fact that these relationships are associated with bad organisational behaviour in a business establishment, even though such relationships are essential for the success of a business. Recent interpretations of right and wrong comprise questions of equity and fairness. There are two important branches of ethics; descriptive ethics and normative ethics. These branches observe the concept of ethics from different angles. As Archie B. Carroll and Ann K. Buchholtz puts in “descriptive ethics is concerned with describing, characterizing and studying the morality the people, an organisation, a culture or a society. It also compares and contrasts different moral codes, systems, practices, beliefs and values” (Carroll & Buchholtz 242). The focus of descriptive business ethics is primarily on what is taking place in specific areas such as behaviour, action, decisions and practices of organisations. It considers the present happenings in a business establishment and therefore there are possibilities for the development of an attitude among some people to follow the activities of a majority even if the action is unfair. At this point one could recognise the importance of normative business ethics as it focus on ‘what aught to be’ instead of ‘what is’ the ethical conditions of an organisation. According to Archie B. Carroll and Ann K. Buchholtz “normative ethics, by contrast, is concerned with supplying and justifying a coherent moral system of thinking and judging. It seeks to uncover, develop and justify basic moral principles that are indented to guide behaviour, actions and decisions” (Carroll & Buchholtz 242). Therefore normative ethics provides a clear cut idea regarding what is ethical and what is unethical in a business. It is more concerned with the do’s and don’ts and with setting up of standards for providing guidelines for a business establishment to ensure its ethical functioning which is necessary for the success of any business in the long run. Ethical behaviour We have identified business ethics as principles of behaviour for individuals or a business community. Higher standards of behaviour could be ensured in the relationship of a business firm with all individuals who are part of the business as well as others who are affected by the business if the firm follows an ethical way of doing business. The decisions and actions of the administrators of a company could not be regarded as ethical behaviour but instead it refers to the behaviour of every staff members of a firm. Les R. Dlabay, James L. Burrow and Brad Kleindl observe two different sections of ethical behaviour in their analysis and according to them “ethical behaviour is made up of the actions of individuals and groups and the results of those actions” (Dlabay, Burrow & Kleindl 164). In this regard the evaluation of ethical behaviour could not be made on the basis of administrative decisions or on the basis of the after effects of actions based on such decisions alone. Thus it is essential to consider both actions taken and effects to evaluate the ethical behaviour of a firm. Managers assume an important role in every business establishment in guiding the firm towards success and therefore success and failure of a business depends on the efficiency of managers. Business results such as profit or loss are not only the sole determinants of the success or failure of a firm but the business activities also plays an important role in deciding the success or failure of a firm. There are a number of factors concerned with the activities of a business and these factors are important to identify the presence of an ethical management in the actions of a company. Les R. Dlabay, James L. Burrow, Brad Kleindl observe the following as the necessary characteristics of ethical management. 1. Legal, honest and ethical actions. 2. Fair treatment of people and other companies. 3. Improvement of communities and the country in which a business operates. 4. Conservation of natural resources and protection of environment (Dlabay, Burrow & Kleindl 164). It could be considered as successful ethical management of business, if the managers of an organisation ensure all the above mentioned features in their business activities. Therefore ethical behaviour of a firm also plays an important role in judging the success of a firm apart from the general perception of success on the basis of business volume and profit. Ethical behaviour and influential factors An exploration of factors which affect the business behaviour could provide the rationale for the presence or absence of ethical behaviour in a business. According to William M. Pride, Robert J. Hughes and Jack R. Kapoor there are individual, social and opportunity factors which influence the ethical behaviour of a business. They observe factors such as personal values, individual knowledge of an issue and personal goals as the key individual factors which affect the ethical behaviour (Pride, Hughes & Kapoor 38). The awareness of an individual regarding an issue is important while taking decisions on the basis that particular issue. A clear understanding of a particular problem would help the decision maker to arrive at ethical solutions for the problem or else his actions may cause an ethical dilemma. The moral values of an individual are yet another factor which influences his ethical attitude. The actions of individuals to attain their personal goals could also influence their ethical behaviour. Therefore it is possible to observe a relationship between the moral values and the personal goals of an individual. An individual with desirable moral values will never resort to unethical activities to achieve his goals. But activities based on selfish motives may harm the business. There are many social factors which affect the ethical behaviour such as cultural norms, co-workers, significant others and the use of internet (Pride, Hughes & Kapoor 38). Cultural norms, even though they are subjected to variations, play an important role in forming the behaviour of an individual in a work place. The attitude of workers is heavily influenced by their cultural standards. Considering the case of customs agents who receive gratuities for their everyday jobs, the action is considered to be illegal in some countries and at the same time viewed as unethical in some other countries. The attitude, actions and decisions of colleagues also influences the formation of a desirable or undesirable attitude towards business ethics. A worker who sees his colleagues making prolonged telephone calls at companies cost would automatically develop a feeling in mind that what his colleagues are doing is right and he would also turn in to such actions in the recent future (Pride, Hughes & Kapoor 38). The ethical perceptions of an individual are also influenced immensely by the morality and values of his friends, relatives and family members. Internet is found to be useful for employees as well as employers. High-speed internet connections provide easy access to those web sites which are useful for their work. But there are also possibilities for employees to access social networking websites and other controversial websites. Factors such as presence of opportunity, ethical codes and enforcement are also proved to be influential in formation ethical behaviour (Pride, Hughes & Kapoor 38). The freedom provided by a company for its employees to behave ethically also falls as a determinant factor of ethical behaviour. Certain policies of companies are found to be restricting their employees to behave unethically. Therefore it is a better strategy for business firms not to provide unnecessary freedom for its employees to ensure their ethical behaviour. The presence and enforcement of an ethical code and also the policy of a company regarding its employees are other determinants of opportunity. Opportunity factors could thus be regarded as deliberate policy implementation of a company to reduce the freedom of their employees to ensure ethical behaviour. Reasons for unethical behaviour One could find several reasons behind the unethical behaviour of an individual in a business firm such as self-interest, conflict between workers and supervisors, blind obedience of workers, situational influence, social relationships and the nature of organisational setup. According to Linda K. Trevino and Katherine A. Nelson there are chances for a person to behave unethically as a result of conflicting roles and they explain it as “people are sometimes expected to play different roles that may make competing demands on them, causing internal conflict and stress that may be resolved via unethical behaviour such as lying” (Trevino & Nelson 275). People may behave unethically in order to reduce their work pressure. There are also cases in which the workers blindly obey the orders of their superior ignoring the ethical side of their action. Self-interest is yet another factor which could lead an individual towards unethical behaviour. Certain individuals are guided merely by self-interest and they would resort to any unethical activities in order to achieve their personal objectives and goals. All these factors lead to various ethical issues and Ronald R. Sims provides a detailed description of the major ethical issues observed in a business and they are “stealing, lying, fraud and deceit, conflict of interest and influence buying, hiding versus divulging information, cheating, personal decadence, interpersonal abuse, organisational abuse, rule violations, accessory to unethical acts, ethical dilemmas” (Sims 99). It is therefore evident that there are possibilities for different kind of unethical behaviour in a business organisation. But these issues could be solved by the planning and implementation of effective policies and strategies and it is the responsibility of the managers and administrators of a firm to ensure the ethical behaviour of employees. Outcomes of ethical behaviour The basic objective of every business firm is to maximise its profit and many experts argue that ethical behaviour could help an organisation to attain its goals in the long run. One could also find arguments which state that there is no relationship between ethical behaviour and financial success of a firm. Agreeing with the latter argument lead us to a question; why should be bothered about ethics if it doesn’t contributes to the financial success? It is necessary to have a look in to the outcomes of ethical behaviour in order to answer this question. Ethical behaviour provides benefit for the society as a whole. According to Jeffrey F. Beatty and Susan S. Samuelson, ethical behaviour is essential for a society to become economically competitive and as they puts in “there is no escaping this fact: the greater the measure of mutual trust and confidence in the ethics of a society, the greater its economic strength” (Beatty & Samuelson 27). It is also true that “people feel better when they behave ethically” (Beatty & Samuelson 27). Most people meet with situations which provide chances to be deceitful in their lives and a person who faces such situations with ethical responses feels good about his actions. Therefore it is obvious that profitability is not the motivating factor behind the ethical behaviour of managers. It is also observed that making a habit of ethical behaviour would help the employees as well as the managers to handle critical situations effectively (Lattal & Clark 86) It would help the workers to give their best to the organisation if all of them develop such habits. Daniels observes that it is possible “to create competitive advantages through ethical behaviour and to avoid being perceived as irresponsible” (Daniels 162). The rationale behind this argument is that financial and strategic success could be obtained as a result of responsible actions because they generate an element of trust and commitment. Ethical behaviour therefore falls to be an important principle to be followed by business firms. Conclusions It is evident form the above discussion that ethical behaviour is found to be beneficial for business firms in many different ways and therefore it is desirable for all business firms to develop such a behavioural pattern among their employees including managers. But it is also true that there are possibilities for workers of a company to behave unethically. One could observe many factors which adversely affect the ethical behaviour of employees such as the influence of colleagues, personal values, self-interest and values of other persons such as friends and family members. In certain cases people behave unethically in order to escape from a particular issue. Therefore it could be argued that it is difficult for unethical behaviour to exist in a business. But it is also true that activities bases on ethics provide many benefits to a firm even though it has little relationship with the financial success. Thus it becomes the responsibility of the managers and administers to develop and implement appropriate policy measures in order to ensure the ethical behaviour of their employees. References Beatty, Jeffrey F & Samuelson, Susan S. Essentials of Business Law. 3rd Illustrated ed: Cengage Learning, 2007. Print. Carroll, Archie B & Buchholtz, Ann K. Business and Society: Ethics and Stakeholder Management. 7th Illustrated ed: Cengage Learning, 2008. Print. Daniels. International Business,11/e (new Edition). Pearson Education India, 2007. Dlabay, Les R., Burrow, James L & Kleindl, Brad. Intro to Business. 7th Illustrated ed: Cengage Learning, 2008. Print. Ferrell, O. C., Fraedrich, John & Ferrell, Linda. Business Ethics: Ethical Decision Making and Cases. 7th revised ed: Cengage Learning, 2009. Print. Lattal, Alice Darnell & Clark, Ralph W. A good day's work: sustaining ethical behavior and business success. McGraw-Hill Professional, 2006. Print. Pride, William M., Hughes, Robert J & Kapoor, Jack R. Foundations of Business. 2nd ed: Cengage Learning, 2010. Print. Sims, Ronald R. Ethics and corporate social responsibility: why giants fall. Greenwood Publishing Group, 2003. Print. Trevino, Linda K & Nelson, Katherine A. Managing Business Ethics. 5th ed: John Wiley and Sons, 2010. Print. Read More