Solomon Essay Research Paper Ethics in BusinessBusiness

Solomon Essay, Research Paper

Ethics in Business

Business ethics is a diverse field that cannot be defined with a single definition. This area addresses numerous issues, problems, and dilemmas within the management of businesses. Does this through numerous perspectives and methods. Of course, in order to present the complexities of business ethics, we must explore the types of issues that business professionals are continuously confronted with. To understand one must

know the definition of corporate ethics as well as knowing what the ethics of responsibility are. After defining what ethics are, we then need to see how these are played out within management. This will show the decline and fall of business ethics over time and how whistle blowing has played its part. Business ethics not only portray humans, but also how businesses treat the environment.

The majority of European and U.S. CEO’s and higher ranking managers define corporate ethics as a subject that is to be dealt with at three levels; (1) the corporate mission, (2) constituency relations, and (3) policies and practices. The corporate mission is the most easily recognized and widely applicable category. Executives say that the enterprise in which they are engaged in, and the products or services that they market, should serve an essentially ethical purpose and that a companies first ethical responsibilities are defined by the nature of their objectives (Madsen and Shafritz, 1990).

Managers also speak of constituency relations when formulating their company’s ethical standards. This usually requires the creation of statements of corporate responsibilities for each individual company. Most of the codes describe the company’s commitment toward certain groups rather than prescribing ethical conduct for specific situations. Madsen and Shafritz, in the textbook Essential of Business ethics quoted a former chairman of a large Japanese company when he said,

Our responsibility is not only to our stockholders, but also to our client,

our employees and their families, our local community residents, and all of

society at large. Our profit comes about through our effort to promote the

prosperity of the community as a whole. (p.15).

There are many differences of opinion in the role that ethics ought to play at the third level of evaluating policies and practices. This is because every person within a corporation may be held to a different set of ethical standards depending upon the position they hold. Not all have the same feelings about the ethical standards that one individual may have even though they all know what position he holds and what his job is. This can lead to potential conflicts between corporate ethics programs, management roles, and individuals.

Many sermons have been preached about the ethics of business and the ethics of businessmen. Of these, one topic is plain. This is the use of everyday honesty. Businessmen are constantly told they should not cheat, steal, lie, bribe, or accept bribes. Men and women do not gain exemption from these rules just because of their jobs or positions within a business or society for that matter. As such, when these individuals do break the rules of ethics,

they are usually severely punished. Often this punishment varies with the level of the responsibility held in their specific job or the position they hold.

In today’s fast-paced world of business, there seems to be a rise in the number of white-collar crimes. More and more companies are receiving a lot of publicity about unethical and illegal practices by senior personnel. There seems to be a “profit at any price” mentality being carried out among the business professions today. Investment banking seems to be getting the most of this bad publicity (Magnet, 1988).

Insider trading is investment banking’s most widely publicized ethical problem. Investment bankers are now routinely trading confidential information in an effort to gain new business. As a result, this information spreads out among investors like wild fire land causes buying and selling sprees. This is best known a recent event in the business world. A CEO was trying to buy his company out from under its corporate partner. The CEO almost froze and gave up on the deal when it came time to hire investment bankers to help structure the deal. He feared that his boss would find out about his plan before he could present it in detail and that he would then be fired as a traitor. Unfortunately, this is becoming more and more prevalent within the business communities of this nation. Investment bankers will sell out their clients for several million dollars in fees (Madsen and Shafritz, 1990).

Why did a once, calm and collected gentlemanly approach toward business turn into such a free-for-all? The takeover movement fueled this change by dumping great amounts of money into investment banking. This in turn attracted hordes of people who wanted to get their pockets filled at someone else’s expense. With all these huge deals taking place, stock appreciation skyrocketed so much that some quiet trading information

on your insider trading could make you extremely rich.

Today’s Americans have a belief that they have set for themselves as well as the rest of the world, a higher example of individual freedom. Americans became a nation with the conviction that arbitrary government action should not restrict the freedom of individuals to follow their own consciences. Today though, arbitrary treatment of citizens by powerful institutions has taken on a new form. There seems to have been erosion of human values within the hierarchy of business.

In the past, the hopes for change in corporate and government behavior have focused mainly on the external pressures such as regulations, competition, litigation, and exposure to public opinion. There was little attention given to the fact that the adequacy of these external pressures is dependent on the internal freedom of those within the organization.

Employees are the first to know if something within an organization is not legally or ethically right. Unfortunately, they are also the lasts to speak out about such problems. Nobody wants to be a whistle blower on the company that they are working for.

According to Ralph Nader and his colleagues who wrote the book, Business Ethics in America, whistle blowing is, “the problem of the employee who publicly criticizes corporate policies because those policies may be dangerous to other parts of the community” (p.54). What has been learned is the willingness and ability of insiders to blow the whistle is the last line of defense for the ordinary citizen. Every corporation, unions, societies, the government, and the law should all change to allow the protection of the whistle-blower whenever possible.

Each corporation should provide an employee bill of rights as well as a system of appeals to guarantee these rights. As a condition of employment, workers at every level should be allowed to voice their concerns about the company’s activities or policies. They should also be afforded a fair hearing in order to voice these concerns. They should be allowed to go public with the story when all other internal channels of communication have been exhausted and the problem remains uncorrected (Madsen and Shafritz, 1990). Protecting individual whistle blower is a necessary measure to ensure corporate honesty and ethical behavior. Corporations have proven their unconcern for protecting the environment if it diminishes profit. Therefore, the next area of concern is business ethics as they pertain to the environment.

There are many debates about what is being done to protect the environment. Many would argue that not enough has been done to protect it. There has been a heightened sense of commitment toward environmental problems and protecting the environment within the federal government. Lately the White House administration’s Environmental Protection Agency has come under fierce attack for a seeming insensitivity toward ecological matters. The Justice Department has been stepping up its enforcement of violations of environmental laws that are designed to safeguard the nation’s soil, air and water.

Over the past eighteen years, since the creation of a special environmental crime section of the Justice Department, the prosecution of corporate organizations and individual managers are continuously on the rise.

The punishments that these groups are receiving are becoming more and more substantial. In fact, between 1982 and 1989, there were 486 indictments for environmental crimes compared to only 25 indictments during the 1970’s. Many of these are some of the United States best-known corporations. Thus, the Justice Department is sending a strong message to corporate America that they can no longer get away with environmental crimes (The Wall street Journal, 1989).

Industry must begin to take the initiative in the problem solving process in order to tackle the major environmental problems and concerns such as vanishing forests, growing desserts, global warming, and the depletion of the ozone layer. Furthermore, industry should not only obey current environmental laws, but they should go above and beyond them. These issues cannot be addressed by passing more laws or regulations. They cannot be cured by committees, states, or even individual nations. These are global problems and should be handled on an international level with full cooperation from all.

Business ethics are complicated, multi-issue problems that are ever changing in our fast-paced world. It is a very complex issue entailing many things from corporate ethics to the ethics of responsibility. Whistle blowing is one result of declining corporate ethics and the decline of ethics has declining corporate ethics and the decline of ethics has led to negative impact on the environment. These complex issues must be addressed or an ever increasing basis in the future.

REFERENCES

Madsen, Peter. Shafritz, Jay, M. (1990). Essentials of Business Ethics.

New York, NY: Author.

The Wall Street Journal. (1989). Dow Jones and Company Inc.

Magnet, Myron. (1988). The Decline and Fall of Business Ethics. Fortune: Time Inc.

Benson, G. C. S. (1982). Business Ethics in America. Lexington MA: D.C. Heath and Company.