In this article, a conclusion of business ethics was done. Business ethics is described as the standards of conduct by which moral and appropriate decisions and actions are centered. There exist various theoretical approaches to these specifications of business moral behaviours. Relevant explanations were made on these theories which range from consequentialism, utilitarianism, egoism, principilism and deontological methodology.
Also, certain honest issues greatly impact the operational activities of today's business. Such issues include environmental issues, issues in product's ad and marketing, consumerism and those attached to occupation i. e. discrimination at work, labour utilisation and identical opportunities were discussed. In the light of the issues pointed out, it is thought that when giving them consideration have an impact on the realisation of business targets. Areas of the business enterprise objectives that can be affected were also analyzed in this statement.
There are various implications for a company and its stakeholders to operate ethically. This aspect was also investigated and lastly, appropriate conclusion and recommendations designed for today's business.
INTRODUCTION
Government and other stakeholders of the business are emphasizing the relevance of ethical techniques by business organizations. Lately, we have seen many unethical behaviours taking place in the procedures of certain businesses worldwide. This makes the population unsafe for approaching businesses, healthy competition, and consumers.
Business honest practice can be an concern which is increasingly being given proper attention in the business world today. Companies are recognising that more and more customers have become ethically conscious day-in-day-out. It is now being turned out in recent studies that many traders use the ethical behaviour of a company in the society as a yardstick for choosing company to invest in. To be able to remain ecological and competitive in the global market, many businesses have recognized the necessity to adopt good moral practice.
ETHICS AND BUSINESS ETHICS DEFINED
The idea of ethics and business ethics has been identified by various authors and accredited scholars. Ethics has been viewed as the conception of what is right and fair conduct or action (Carroll, 1991; Freeman and Gilbert, 1988). "Ethics is the concept of morals i. e. one's capability to choose between right and wrong, good and bad, acceptable and unacceptable" (Desjardins, 2009; Valasquez, 2009).
The concept of 'Business Ethics' has come to imply various what to various people. Regarding to Velasquez (2009), "business ethics is discovered as a professional review of moral right and wrong". Garrett (1970) defines business ethics "as the studies of the impacts of individual works, the firm, the business community, and modern culture all together". Relating to Weihrich and Koontz (1994), "business ethics can be involved with real truth and justice and has a number of aspects like the expectations of world, fair competition, advertising, public relations, social responsibilities, consumer protection under the law, and corporate patterns both within and outside the business wall space". "Business ethics is the typical of do and moral worth which governs certain actions and decisions of a business in its business environment. Such business actions and decisions derive from broad key points of integrity and fairness and stakeholders' issues in the areas of product quality, customer satisfaction, employee salary and benefits, local community and environmental duties" (Boone and Kurtz, 2005).
For the purpose of this article, business ethics can be explained as the expectations of conduct according to which business decisions and activities are created. Ethics can be described as a code of do or behaviour considered to be morally right. Business ethics requires the analysis of the level of morality that prevails in the actions and decisions of a particular business. To put it simply, ethics in business is dependant on the facts or assertions of what is considered right or wrong, bad or good and moral or immoral. For instance, an ethical decision of an business means doing what is seen as morally right. Hence, business ethics provide a construction for the conduct of business affairs.
THE CONCEPT OF THEORETICAL METHODS TO BUSINESS ETHICS
Different philosophers and theorists have propounded various ideas on what can be viewed as morally acceptable and unacceptable. Among these theories are:
Teleology (Consequentialist theories)
The consequentialists method of ethical reasoning will involve justifying an action by the final results or results attained by such action. From this truth, it is evident that consequentialism is based on two ideas:
What is morally right or wrong depends only on the final results or results of an act.
The more good outcomes can be made by an function, the better that function.
According the consequentialists, the results attained by an action or a decision establishes whether to categorize it as an honest or unethical one. In examining what the best effects are, consequentialism is not so informative unless combined with other theory. Utilitarianism and egoism will be the most influential varieties of consequentialism.
Utilitarianism
In the utilitarian method of ethical account, emphasis is laid on the amount of good and injury which might be derived from an action or a decision i. e. assess a specific action or decision by the quantity of delight or unhappiness it creates. For example, whenever a company opt to move its manufacturing facility in one location to another, what would be the quantity of good i. e. joy induced and amount of damage i. e. unhappiness that the movement would create. The utilitarian approach to business ethics is also obvious when analysing a particular action or decision on cost gain basis. For instance, when all the costs incurred from an action are added and weighed against the producing benefits. If the benefit is more than the cost, the action may be considered ethical.
According to a utilitarian, if the amount of good appears to outweigh the quantity of harm in the course of movement, your choice is recognized as being ethical. But if the reverse is the situation, it can be an unethical decision. An excellent reference for this is in the quotation of John Stuart Mill in his Greatest Joy Principles. He estimates that "Actions are right compared as they have a tendency to promote happiness, wrong as they tend produce the change of happiness". The bottom line is, utilitarianism says an action that is ethically right in confirmed situation is the one that produces the most happiness and least unhappiness for the largest amount of people. Relating the idea of utilitarianism to today's business, a business that weighs the quantity of affects its decisions and activities has on the numbers of stakeholders and use it as a basis of moral criteria is said to adopt a utilitarianism approach.
Egoism
Egoist theories define right and wrong in conditions of the results to one's home. In any honest decision making situation, an egoist would think about and choose among alternatives those that would contribute in the greatest amount to his/her personal home interest. Before carrying this out, critical consideration would have been done in evaluating the effects of such action or decision on his/her physical, mental or psychological welfare. An egoist theories is evident in today's business where a particular organization bottom part its ethical ideals on activities and decisions which it can to a very large extent, derive its most important purpose or objectives.
Deontological Theory
This theory is generally known as "duty-based theory" of business ethics. This is because the term deontological was produced from the Greek term deon meaning work. Rather than centering and attaching what is morally right or wrong to the consequence an action or a choice brings, deontologists structured their decisions about moral right and incorrect on extensive and universally suitable ethical beliefs such as credibility, fairness, duty, admiration for humans etc. Based on the deontological approach, some actions or decisions would be considered wrong even they created implications which were good while some would be looked at as good even though bad results were achieved. For example, an auditor embracing deontological strategy would likely insist upon telling the reality about a company's financial complications even if doing this might put the business out of business and his/her job on the line.
Summarily, deontologist denies that what in the end issues is not the results of the action but the action itself. Deontology is mostly related to Immanuel Kant, a German philosopher. The deontological theory is noticeable in many businesses today where company critically put into account their business activities to be able to be fair, accountable and transparent in their dealings with stakeholders. 5
THE CONCEPT RELATIVE AND Overall ETHICS
Relative ethics/relativism
This theory suggests that we now have no total truths, validity or generally acceptable concepts of ethics and this what's morally right and incorrect largely depend on individual and the prevailing societal views and ethnicities. The fact is that the relativist assumed that the conditions for measuring right and incorrect change over time and range across cultures. Simply put, relative ethics is the denial of ethical absolutism.
Relativism holds the view that morality is in accordance with the beliefs and norms of your respective culture i. e. categorizing an action as right or incorrect depends on the moral beliefs maintain by the society where such action is practice. An action may be labeled as morally right in a single modern culture but morally incorrect in another. Within the light of the, the relativist argues that there are no extensive and universally appropriate moral requirements as they are dictated by what has been practice in the contemporary society. Summarily, what is right for just one might not exactly be right for another or as a expressing should go "When in Rome, do as the Romans do" This is the idea behind the idea of relativism.
Arguments against as well as for relativism
One of the quarrels against comparative ethics is the fact that some is the idea of some individuals that universal moral standards can be done to be followed even if some moral norms and values differ among ethnicities. Although, great attention can get to cultural distinctions in moral practices and beliefs, a few of these practices and values that are morally wrong should be pointed out. For instance, the practice of slavery prior to the civil war in various countries. Comparative ethics does not recognise the fact that the explanation behind certain societal methods may be governed by home interest.
Since the moral rightness and wrongness of action will depend on what is prevailing in the world according to comparative ethics, it uses that certain must obey the norms of the society whether such norms are generally incorrect or right because to diverge from them is to act immorally. Would it mean that if you are part of an contemporary society that embraces racial discrimination, you need to acknowledge and promote it?
Also, it is possible that members of the same contemporary society keep different views and beliefs on a similar practice. How do one judge what's morally right or wrong in such situation? The concept of relativism will not address this example.
Despite the criticism above, the idea of relativism still has some acknowledgement for responding to societal issues which are essential. Relative ethics highlights the fact that different societies hold different beliefs and these beliefs are affected by culture. In addition, it stimulates individuals to explore the rationale for variations in opinion while also challenging those to examine known reasons for beliefs and prices they keep.
Absolute ethics/absolutism
The idea of absolutism explains that one activities or decisions are absolutely right or wrong irrespective of their results or effects as well as the rationale behind them. For example, eavesdropping to private subject might be considered to be always morally wrong even if the explanation for doing such thing is good, and even if it brings about good end result.
Simply put, honest absolutism states that there is universal or a unitary moral code or standard that is utter and which is similarly applicable to everyone in the contemporary society all the time. From this reality, it is obvious that absolute ethic is not dependent on specific views, existing ethnicities of the society etc.
Arguments for and against absolutism
While moral relativism is seen as only leading to problems and turmoil in one's life and in modern culture, it was argued that moral absolutism will lead to no or little misunderstandings i. e. when moral standard is based on general key points. The other debate for absolutism is that it's true and to some extent, observed in our daily lives. For example, we condemn or criticize wrong actions and reward good ones. This is an data that moral standard which is based on general views exist.
Judging what's right and incorrect on a universal moral standard is seen as criticizing other's culture. According to the relativist, this is intolerant as moral criticism of others is incorrect. Another important criticism of absolutism was its lack of human concern. Critics argued that attempting to keep up order by forcing or terrifying people into conformity by agreeing to a common moral standard can kill an individual potential for moral wisdom. Many philosophers also argued to oppose the idea of absolutism in times of life and fatality. For example, imagine it is decided that it is absolutely wrong to lie under any situations, imagine if one is confronted with the choice in which he/she must lay as a result of no other option.
ETHICAL CONDITIONS THAT CAN AFFECT THE OPERATIONAL ACTIVITIES OF TODAY'S BUSINESS
An ethical issue serves as a a challenge, situation or opportunity which requires individuals, group or an company to choose among several activities those that must be examined as right or incorrect, honest or unethical. Hence, an ethical issue from business of perspective is a topic matter which boosts questions about the requirements of do or behaviours that are being adhered to by the business independent from the financial motives. In some situations, certain honest issues may require the company to undertake behavior which is unprofitable if it adheres to 1 set of standards or profitable if adheres to another set of criteria. For example in the UK, while using women at lower rates of pay than men may have been considered acceptable according to the business ethics of the 1960s, it was not by the 1970s and even the Equal Pay Act which was approved in 1970. Types of ethical issues confronted by today's companies are:
Environmental Issues
Environmental issue is now a location of increasing concern for every business nowadays. Considering the growing concerns of global warming, many businesses now strive hard to reduce their emissions of carbon dioxide and encourage the production of more energy-efficient equipments and appliances. The objective is to stabilize greenhouse gas amount in the atmosphere at a level considered less in a position to trigger dangerous local climate change. Other environmental issues that make a difference the functional activities of today's business are in the aspects of water usage and pollution, in charge sourcing and waste materials management i. e. recycling. For example, the Coca-Cola Company has environmental issue in India when it was reported by some communities that its operation has resulted in shortage of drinking water, water pollution and against the law toxic dumping. This really influences the procedure of the business. Other recent issue that raised ethical questions is that of BP Gulf engine oil spills.
Employment Issues
These are issues associated with working for, or taking up a role in an organization. Types of issues due to discharging one's responsibilities in the workplace are:
Discrimination: This occurs when individuals are not being cared for accordingly at work. Types of areas where discrimination may occur are in pay, campaign and performance analysis. Also, racial and intimate discriminations in an organization create ethical issues which can in turn affect the procedures of such group. In the united kingdom, employers should never discriminate foundation on the aforementioned factors of course, if found guilty in virtually any aspect by any employer, such workplace will be liable.
Equal Opportunities and Variety: On the ground of being working ethically, many business give proper focus on equal opportunity through the procedure for recruitment, selection, staff training etc. They also promote diversity in every aspects of their business procedure by using and working with differing people of different nationalities, backgrounds, civilizations, people with disabilities etc. Each one of these go a long way in influencing business operations. For example, failing to give identical opportunities may leads to high rate of staff turnover, reduce employee morale and the pace of absenteeism within an organization.
Advertisement and Marketing
The procedure for creating recognition for products and services, the method of distribution, the ways that product/service are listed and the promotional strategies used are business area that creates potential ethical issues. For instance, false or misleading marketing communications i. e. the utilization of deceptive sales methods can jeopardize customer's rely upon a firm. Also, charging needless and unjustifiable high price or participating in price fixing for something or service may be considered unethical by buyers or users. These can affect business businesses. Many businesses try to adopt ethical requirements to promote and marketing and this goes a long in influencing that they operate. Labour Utilization
The manners in which labour is being used and paid for in the development of goods and provision of services constitute a major concern to business ethics. For instance, utilising labor at below minimum amount wage, not complying with health insurance and safety expectations, poor working conditions etc are current ethical issues in today's business. Also, it was disclosed lately that the levels of money paid as wages to employees by companies in a few part of Asian and African countries are by much too low compared to the amount of labor used for development.
Consumerism
In the united kingdom and other parts of the world e. g. US, consumers have rights to quality products and services. That is the reason why businesses, throughout their process of production give proper focus on methods adopted along the way of development and specifications laid down by legislation. On the floor of being honest functioning, businesses now take part in proper product labelling, packaging, honest advertisements, safe and quality products etc all for safeguarding consumer's interest.
HOW BUSINESS Targets ARE INFLUENCED BY ETHICAL CONSIDERATION
Business objectives will be the desirable end results which an organisation seeks to attain. Generally, every business wishes to maximize income, assures adequate return on investment funds increase market share, achieve business enlargement, reduce environmental effects and meet or if possible, exceed stakeholders' prospects. Ethical consideration impacts business organizations of most sizes. Aspects of the business that generate concerns when contemplating ethical procedure are mentioned below:
With the increasing demand for products and services as the planet economy expands, businesses have an increased trend of increasing sales and maximising profits so long as they meet the needs of customers. Modern companies are increasing seeking ways of undertaking their functional activities in a fashion that assures less effect on the environment. In the UK for example, it is well known that the aims of the building companies are affected by considering issues such as minimising waste, energy use, drinking water utilisation, and controlling emissions to minimise damage.
Also, maintaining an ethical workplace requires short-term costs against business objectives. Participating employees and other stakeholder i. e. suppliers in moral operation devote some time and money. Also consistent with, people with disabilities cannot perform organisational duties and take up more difficult assignments as those with no disability. An company who on the floor of performing ethically utilizes more disabled employees can experience less job performance although might be looked at as doing the right thing. However the fact remains that realisation of targets may be hindered by such organisation.
Every business desires to make sure its shareholders sufficient return on investment. Where a particular business consists of many unethically aware investors, considering ethical operation by such business might be observed as not relevant by the shareholders who've the voting right of seling their stocks or even quit the business.
Another important manner in which business aims are damaged by ethical awareness is the fact that it affects business direction. At times, considering undertaking business operation in an ethical way creates distress for new and young businesses how to assimilate this with the aims which have already been set. As described earlier in this record, consumers are increasingly becoming ethically conscious. Within the light of the, many businesses conclude establishing priorities in the order in which they shouldn't during establishing their targets.
IMPLICATIONS FOR THE BUSINESS AND ITS OWN STAKEHOLDERS TO USE ETHICALLY
Build sales: For an organization executing its business operation in an moral way, there exists higher tendency for it being the most preferred choice for customers especially as most people now base their purchasing decisions not only financial factor but on other relevant issues where being moral is part of.
Increase income: Clearly when ethically concerned customers are aware a particular business conducts its business affairs in an acceptable manner, they tend to patronize such business as sales increase, business revenue increases plus more profits generated. According to the KPMG report entitled "Ethical Business and Sustainable Communities" (May 2002), it was discovered that 91% of consumers are more likely to purchase goods or services from businesses that the consumer sees as performing ethically.
Attract investment: It has been proved in the united kingdom that long-term traders such as pension funds who run large opportunities for an incredible number of ordinary people thought in company would you not carry out its business procedure only on financial purpose, but also on interpersonal and moral issues. Apart from this, the numbers of ethically aware shareholders have grown in recent years. According to The Independent on Sunday 17 January 2009, it was revealed that 85 % of equity ISA buyers were considering investing in ethical funds and 67 the previous year. This amount shows how relevant it is for business to consider operating ethically.
Competitive edge: An organization operating ethically has a higher probability of attaining competitive advantages over its rivals who doesn't. In the current global market, it is necessary for businesses to put into practice good moral practice to stay lasting and competitive. Many businesses use reasonable moral practice as a strategy to combat opponents.
Promote employee devotion and determination: By dealing with staff consequently and providing similar opportunities in various business areas such as pay, campaign and job appraisal. The rate of personnel turnover will be reduced to zero or a minimum, staff will be faithful to the organization and determined to release their contractual duties to the realisation of collection objectives.
Improve the image/reputation of a business: In the wonderful world of today's business, honest procedure is one of the criteria of choosing liable business. For instance, accountable sourcing of recycleables which Tarmac Structure Company has always embraced enabled it to own unique image in the sight of its stakeholders.
Operating ethically also helps to protect brand value, improve corporate citizenship and consumer assurance in a business.
Promote rely upon a business: Clear ethical practices create trust in the company, both internally and externally. A business that demonstrates good ethical prices has a high probability of attaining customer commitment and trust.
According to Holme (2008), "it has been also been discovered that suppliers are comfortable in, and always seeking to source organizations with good moral practice that they can trust".
A "STAKEHOLDER" is anyone who influences or can be affected by the activities of a business. Stakeholders are categorized as inner i. e. the folks within and who perform daily work of the business enterprise e. g employees. And exterior stakeholders i. e. the ones that purchase, use and influence the sale of products or services of any company e. g. customers.
EMPLOYEES: It is not only on the business that functioning ethically has effects. Employees are fundamental internal stakeholder of any organization. Organizational ethics such as promoting equal opportunities, giving proper attention to employee health and safety, not engaging in any take action of discrimination, provision of quality working conditions etc make the workplace an interesting place to be and also enhance job performance. As pointed out before, employees will be encouraged and remain loyal to the business.
SHAREHOLDERS: For the shareholders, their dividends may be low in the short-run credited to both financial and non-financial costs incurred from ethical operation, however in the long-run as people become aware of the business operations, revenue increase and much more dividends will be distributed to shareholders. Also, from a shareholder's point of view, a small business that is functioning ethically provides higher assurance on prosperity. That's the kind of group which customers, employees, suppliers etc want to cope with. Demonstration of good business value is achieved by shareholders.
CUSTOMERS: Customers will trust the business. Without any benefit of doubt, they'll patronize the business's product or service thereby contributing to the business enterprise success. As pointed out before, customer retention will be achieved and more potential prospects will be attracted to the business.
CONCLUSION AND RECOMMENDATIONS
This survey has revealed that good ethical procedures by businesses are extremely significant to the realisation of organizational success. A small business firm that embraces moral ways of executing its business affairs is more likely to accomplish employees' commitment, commitment and satisfaction which lead to quality of works and increased performance than unethical one. Such business will also portray good organizational value in the eyes of the stakeholders. Additionally it is concluded that adopting good ethical behaviour increase being competitive, business sales, profit, customers retention and devotion and investments to mention a few.
Since the relevance of business ethics can't be downgraded in today's business community, it is strongly suggested that business organization embrace ethical methods. Businesses should deal with moral issues such as discrimination and equivalent opportunities in the workplace in the best possible manners. Clearly business do functions in vacuum, environmental issues such as energy utilisation, minimising misuse and recycling should be properly tackled so that business operations will never be negatively affected by stakeholders.
