Ethics In Business Essay, Research Paper

The Necessity Of Ethics In Business

Ours is a business-centered society. No group in America is more influential than businessmen (Baumhart xv). Their influence, for good or evil, enters every life and every home many times each day. If this influence is good, the nation is strengthened; if it is evil, the nation is weakened. Obviously, the myriad decisions of businessmen will significantly determine our national health; ethical, as well as economic. Business ethics are discussed not only in board rooms, but at dinner tables, in university faculty rooms and on the floor of Congress (Garrett 1). Many, especially the impressionable young, imitate the mores and manners of successful businessmen. How important are business ethics? In what ways are business ethics defined? The ethical standards of businesses shape America and are key to a business functioning.

Ethics are the backbone of American industry, well, they should be. Whether an organization has good or bad ethical standards, ethics is an issue for all people. Ethical problems arise not only from the difficulties experienced in making a valid moral judgment, but also from practical obstacles to the execution of even a correct decision (Pastin 1). Often, it is harder to go through with a morally correct decision even though you know it is the right thing to do. More often than not, the temptation to take the easy way out is overwhelming.

There are many definitions of ethics, but, according to author Herbert Johnston, ethics is concerned with two things: human conduct and what ought to be done (Johnston 1-2). It also involves people s perceptions about what should be done. People have duties to do what is right and to not hurt other people. More or less, ethics involve obligations. Johnston also defines ethics as a practical, philosophical science by which we may reach conclusions concerning the rightness or wrongness of voluntary acts as related to our last end (Johnston 25). Johnston is saying that ethics are judgments based on society s set moral standards that result in good outcomes or bad outcomes, depending on the goodness or badness of the judgment. More specifically, business ethics are an attempt to develop and apply basic principles in the area of human economic

relations (McLennen 5).

With the definition of ethics now clarified, the reasons for being ethical arise. Why do/should businessmen act ethically? Based on Ray Baumhart s 1998survey of 1,031 businessmen, the most influential incentive for being ethical was a man s personal code of behavior. Most people are ethical because of what they believe to be right. Most people want to take the credit for doing the right thing when they will be recognized or even rewarded. The true test is seeing what people do when no one is looking. The following list are the other top 5 choices in descending order of importance to the surveyed businessmen: 2. formal company policy, 3. the behavior of a man s superiors, 4. the ethical climate of the industry, and 5. the behavior of a man s equals in the company (Weaver 97). From these rankings, it appears that when a businessman acts ethically, he attributes it to his own ability to resist pressure and temptation, with some credit due to his superiors and the company policy. People want the reputation of being ethical. They feel like they are a good person if they are known as being ethically good. On the other hand, the human reluctance to blame oneself for ethical failings helps to explain why our respondents [to the survey] rank personal financial needs as least important of the five factors influencing unethical behavior (Baumhart 46). (See chart on page 10)

In some instances, people believe good business is good ethics (Lewis 48). Of those Baumhart surveyed, 98% believed that sound ethics is good business in the long run. However, after being questioned further, and when defining good business as maximized profit, then most disagreed that good business is good ethics. They stated that good ethics are not going to bring in maximized profit. Others argued that you can catch more bees with honey than with vinegar. This study leads one to conclude that businessmen are only ethical to make themselves look good and all is fair when it comes to making a dollar.

The popular image of today s American businessmen includes the notion that they are relatively unethical. The standard consensus seems to think that most businessmen will do anything, honest or not, for a buck (Wong 17). An overwhelming 77% regarded business as a dog-eat-dog proposition. The sources of this popular image of businessmen are, of course, personal experience, but also, the stereotype is produced by communications media (television, radio, daily newspapers, and weekly magazines), plays, movies, and political speeches. Unfortunately for businessmen, their wrongdoings and shortcomings are what most often make the news. This negative press gives the overall impression that businessmen are unethical. Are they really unethical, or are they just getting the bad end of the deal due to negative press?

According to Sal Marino s study, the results are bittersweet. Although the majority of those interviewed said they had never been propositioned to do anything unethical at work, a relatively high percent of those who had been propositioned had indeed done the dirty deed that they were asked to do. Marino made the following comment on the results of his study:

The good news is that seventy-six per cent of the respondents said that they had never been asked (or ordered) to do anything they considered unethical pertaining to work. The bad news is that twenty-four per cent confessed that they have been asked (or ordered) to do something that they considered unethical. And the really bad news is that forty-one of those asked eventually did the dastardly deed that was requested of them without objecting (Marino 22).

The ever-prodding Marino then asked the respondents what they would do if they discovered that their employer was asking them to do something unethical, dishonest, or unlawful. An alarmingly low five per cent said they would quit on the spot, another nine per cent would look the other way, and an overwhelming majority, seventy-eight per cent, would try to talk to their bosses or try to resolve the problem in some way that would not cause them to lose their job. The remaining eight per cent were uncertain about what they would do — or they refused to fess up. Today, Americans, workers and nonworkers, have developed an alarming tolerance for intolerance (Trudel 69). People are not bothered as much by dishonesty, crookedness, or lack of respect. They have come to think of it as normal. People just do not expect anything more than a crooked businessman these days. In an interview with Marino, Alvin Toffler, a futurist, replied that, the sophistication of deception is increasing at a greater rate than the technology for verification. That means the end of truth. Many of our leaders are liars, skilled at deception. Lying has become tolerable, if not acceptable (Trudel 68). (Bill Clinton: Are you listening?) Accountability has slipped. Lawyer lies, those technically true but misleading statements are prevalent. Why is this happening? Two reasons: Greed and poor ethics. Present day Americans are not ethical. They are selfish, deceitful, egomaniacs only looking out for themselves. Today, if the economy is good, it is tolerable to be bad. Today, if you merely apologize for a heinous crime, it is tolerable to be forgiven. Today, if you misrepresent the goods, it is tolerable if you are selling yourself. Today, if you work for a cheater, it is tolerable as long as you benefit from it (Marino 23). Ethical leaders, honest people who serve rather than deceive, will be increasingly cherished in the future (Trudel 69). Right now we live in a time when the ends justify the means.

There is hope however. For all of the crooked businessmen in the world, there are still some noble and ethical businessmen holding on. Although some businessmen may not believe it, according to Rodger Spiller, director of the New Zealand Centre for Business Ethics (NZCBE), there is a strong positive correlation between ethics and sustainable financial performance (Spiller 52). Ethics is becoming very important and this is reflected by international business increasing momentum towards ethics and sustainable wealth. Businesses are no longer looking for the quick (albeit probably also unethical) ways of getting rich. They now want to build long term relationships that will keep the income flowing for many years.

Businessmen are looking for ways to build a long-lasting, ethical enterprise. To do this, they need to put together the Four P s of ethical companies into one cohesive company. According to Stiller, the Four P s are: Purpose, Principles, Practices, and Performance. These Four P s are the framework of an ethical organization and assist with identifying and encouraging good ethical standards.

The purpose of an ethical business is to create a triple bottom line of environmental and social as well as financial wealth (Spiller 52). It operates with principles such as honesty, fairness, caring, and courage, which guide an individual and business behavior (Spiller 52). The practices the business applies, such as those noted

previously, take account of all stakeholders, while performance measurement involves ethical accounting for the triple bottom line (environmental, social, and financial wealth). Measuring performance is key to progress. Once you have gotten accurate measurements, you must analyze them to see what adjustments need to be made. There is always room for improvement. Once you have analyzed and decided on what steps should be taken, implement them and follow up once again. Striving to be a company that implements the Four P s and maintains a healthy triple bottom line is an ongoing process that constantly needs work.

Mr. Stiller has created an inventory, if you will, of desirable practices for each of the six shareholder groups. To foster environmental care, an organization should reduce, reuse, and recycle materials, conserve energy, and conduct environmental audits. With regard to employees, key practices include effective communication (that s a biggie), learning and development opportunities and the promotion of safe and healthy work environments that provide equal employment opportunities. To keep customers satisfied and happy enough to keep coming back, organizations should practice industry-leading quality programs, full product disclosure and safe products. Suppliers benefit from long-term purchasing relationships along with fair and competent handling of conflicts and disputes. Shareholders should receive a good rate of return, comprehensive and clear information and effective management of corporate government issues. Last, but not least, innovative giving to the community, volunteer programs and support for education and job training programs strengthen the relationship between business and society. This kind of care for the environment will help foster a good relationship with the surrounding community because the people know that the organization cares about the area it is located in. Practicing these charitable and ethical methods in turn will produce results along the triple bottom line and provide the community with an ethical and generous, yet profitable, organization.

Even though more and more people are beginning to realize the long-term benefits of running an ethical business, there will always be crooked bosses. People just need to know how to deal them. A survey of 2,000 conducted by the International Association of Administrative Professionals indicated that eighty-eight per cent of secretaries say they have told lies on behalf of their boss. A quarter have bosses that fake expense reports, a fifth have seen information destroyed or carted off, and a third have observed time sheets doctored. Some have even been asked to hire a prostitute (Mulrine 76). There are ways to avoid these situations and even prevent them from happening. Employees can negotiate the slippery slope before loyalty becomes culpability in a court of law (Badaracco 103). First and foremost, by having ethics chats with your boss before you ever need them could help stop trouble before it ever starts. Most employees get into trouble by not broaching the issue of ethics with a boss until they find themselves knee-deep in unexplained packages and fake documents (Braybrooke 175), says Ellen Bravo, executive director of 9to5, National Association of Working Women. This is why whistle blowing is rare. People can not tell on the guilty boss because they have been entrapped into the wrongdoings also. You must be aware enough and even brave enough not to blindly get caught in the ring. One should also check out the boss before you sign on and then establish an understanding with your boss during the first week on the job. Rule number two: always play the loyal protector. Even if you suspect your boss of wrongdoing, accusing him or her of illegal conduct should not be your first course of action. Many bosses are truly unaware that their behavior breaks any rules. The best approach would be to say, I want to alert you to something that might not look good to other people. This might get through to a truly oblivious boss — and tip off a dishonest person that you are on to the behavior (Mulrine 77). Even if the talk goes well however, start a paper trail. Protect yourself. Precede a conversation with a memo saying: I d like to learn more about the process here. I was hoping you could explain to me why the approach you have asked me to take with bids is better than the approach I though we used (Mulrine 77). If all else fails and good cop does not work, play bad cop. Some bosses just will not get it otherwise. Skinny it right down for them, and paraphrase it back — In other words, Phillys, you want me to lie to the tax auditors? Most employers will back off. If they do not, emphasize that their behavior makes you uncomfortable (Ferrill 234). Finally, you should know where to turn. If your boss is a an incorrigible criminal, most companies have someone to turn to — internal company auditors, ombudsmen, or (the latest rage) ethics officers (Mulrine 77). If your company is not supportive, find an attorney who will be. You do not need to become a part of a fraudulent company. Just as much money can be made through honest business methods. There are methods of protecting yourself from becoming involved in something you know is wrong.

Business ethics are of growing importance in today s economic world. In the long run, ethics will make or break a company. It takes us back to an old saying: cheaters never win. Running a clean, honest business not only puts you ahead in life, it will also move your organization forward with a clean conscience. There will not be any looking over your shoulder or dodging bullets. Customers will recognize that they are being treated fairly and continue to return to a company that provides good, ethical services. People do not want to deal with someone whom they feel is always trying to pull the wool over their eyes. Most people appreciate an honest, hardworking company with a code of ethics or mission statement hanging on the wall in the office. More and more companies are investing time and money into learning more about conducting an ethical business and an increasing number are attending workshops. The 1998 Business for Social Responsibility USA conference attracted 850 participants for thirty-two countries. This compares with 650 people at the 1997 conference. This statistic reflects just how important business ethics are becoming. The more businesses learn about ethics, the more they will be able to practice the future of business: ethics.

The Necessity Of Ethics In Business

Ours is a business-centered society. No group in America is more influential than businessmen (Baumhart xv). Their influence, for good or evil, enters every life and every home many times each day. If this influence is good, the nation is strengthened; if it is evil, the nation is weakened. Obviously, the myriad decisions of businessmen will significantly determine our national health; ethical, as well as economic. Business ethics are discussed not only in board rooms, but at dinner tables, in university faculty rooms and on the floor of Congress (Garrett 1). Many, especially the impressionable young, imitate the mores and manners of successful businessmen. How important are business ethics? In what ways are business ethics defined? The ethical standards of businesses shape America and are key to a business functioning.

Ethics are the backbone of American industry, well, they should be. Whether an organization has good or bad ethical standards, ethics is an issue for all people. Ethical problems arise not only from the difficulties experienced in making a valid moral judgment, but also from practical obstacles to the execution of even a correct decision (Pastin 1). Often, it is harder to go through with a morally correct decision even though you know it is the right thing to do. More often than not, the temptation to take the easy way out is overwhelming.

There are many definitions of ethics, but, according to author Herbert Johnston, ethics is concerned with two things: human conduct and what ought to be done (Johnston 1-2). It also involves people s perceptions about what should be done. People have duties to do what is right and to not hurt other people. More or less, ethics involve obligations. Johnston also defines ethics as a practical, philosophical science by which we may reach conclusions concerning the rightness or wrongness of voluntary acts as related to our last end (Johnston 25). Johnston is saying that ethics are judgments based on society s set moral standards that result in good outcomes or bad outcomes, depending on the goodness or badness of the judgment. More specifically, business ethics are an attempt to develop and apply basic principles in the area of human economic

relations (McLennen 5).

With the definition of ethics now clarified, the reasons for being ethical arise. Why do/should businessmen act ethically? Based on Ray Baumhart s 1998survey of 1,031 businessmen, the most influential incentive for being ethical was a man s personal code of behavior. Most people are ethical because of what they believe to be right. Most people want to take the credit for doing the right thing when they will be recognized or even rewarded. The true test is seeing what people do when no one is looking. The following list are the other top 5 choices in descending order of importance to the surveyed businessmen: 2. formal company policy, 3. the behavior of a man s superiors, 4. the ethical climate of the industry, and 5. the behavior of a man s equals in the company (Weaver 97). From these rankings, it appears that when a businessman acts ethically, he attributes it to his own ability to resist pressure and temptation, with some credit due to his superiors and the company policy. People want the reputation of being ethical. They feel like they are a good person if they are known as being ethically good. On the other hand, the human reluctance to blame oneself for ethical failings helps to explain why our respondents [to the survey] rank personal financial needs as least important of the five factors influencing unethical behavior (Baumhart 46). (See chart on page 10)

In some instances, people believe good business is good ethics (Lewis 48). Of those Baumhart surveyed, 98% believed that sound ethics is good business in the long run. However, after being questioned further, and when defining good business as maximized profit, then most disagreed that good business is good ethics. They stated that good ethics are not going to bring in maximized profit. Others argued that you can catch more bees with honey than with vinegar. This study leads one to conclude that businessmen are only ethical to make themselves look good and all is fair when it comes to making a dollar.

The popular image of today s American businessmen includes the notion that they are relatively unethical. The standard consensus seems to think that most businessmen will do anything, honest or not, for a buck (Wong 17). An overwhelming 77% regarded business as a dog-eat-dog proposition. The sources of this popular image of businessmen are, of course, personal experience, but also, the stereotype is produced by communications media (television, radio, daily newspapers, and weekly magazines), plays, movies, and political speeches. Unfortunately for businessmen, their wrongdoings and shortcomings are what most often make the news. This negative press gives the overall impression that businessmen are unethical. Are they really unethical, or are they just getting the bad end of the deal due to negative press?

According to Sal Marino s study, the results are bittersweet. Although the majority of those interviewed said they had never been propositioned to do anything unethical at work, a relatively high percent of those who had been propositioned had indeed done the dirty deed that they were asked to do. Marino made the following comment on the results of his study:

The good news is that seventy-six per cent of the respondents said that they had never been asked (or ordered) to do anything they considered unethical pertaining to work. The bad news is that twenty-four per cent confessed that they have been asked (or ordered) to do something that they considered unethical. And the really bad news is that forty-one of those asked eventually did the dastardly deed that was requested of them without objecting (Marino 22).

The ever-prodding Marino then asked the respondents what they would do if they discovered that their employer was asking them to do something unethical, dishonest, or unlawful. An alarmingly low five per cent said they would quit on the spot, another nine per cent would look the other way, and an overwhelming majority, seventy-eight per cent, would try to talk to their bosses or try to resolve the problem in some way that would not cause them to lose their job. The remaining eight per cent were uncertain about what they would do — or they refused to fess up. Today, Americans, workers and nonworkers, have developed an alarming tolerance for intolerance (Trudel 69). People are not bothered as much by dishonesty, crookedness, or lack of respect. They have come to think of it as normal. People just do not expect anything more than a crooked businessman these days. In an interview with Marino, Alvin Toffler, a futurist, replied that, the sophistication of deception is increasing at a greater rate than the technology for verification. That means the end of truth. Many of our leaders are liars, skilled at deception. Lying has become tolerable, if not acceptable (Trudel 68). (Bill Clinton: Are you listening?) Accountability has slipped. Lawyer lies, those technically true but misleading statements are prevalent. Why is this happening? Two reasons: Greed and poor ethics. Present day Americans are not ethical. They are selfish, deceitful, egomaniacs only looking out for themselves. Today, if the economy is good, it is tolerable to be bad. Today, if you merely apologize for a heinous crime, it is tolerable to be forgiven. Today, if you misrepresent the goods, it is tolerable if you are selling yourself. Today, if you work for a cheater, it is tolerable as long as you benefit from it (Marino 23). Ethical leaders, honest people who serve rather than deceive, will be increasingly cherished in the future (Trudel 69). Right now we live in a time when the ends justify the means.

There is hope however. For all of the crooked businessmen in the world, there are still some noble and ethical businessmen holding on. Although some businessmen may not believe it, according to Rodger Spiller, director of the New Zealand Centre for Business Ethics (NZCBE), there is a strong positive correlation between ethics and sustainable financial performance (Spiller 52). Ethics is becoming very important and this is reflected by international business increasing momentum towards ethics and sustainable wealth. Businesses are no longer looking for the quick (albeit probably also unethical) ways of getting rich. They now want to build long term relationships that will keep the income flowing for many years.

Businessmen are looking for ways to build a long-lasting, ethical enterprise. To do this, they need to put together the Four P s of ethical companies into one cohesive company. According to Stiller, the Four P s are: Purpose, Principles, Practices, and Performance. These Four P s are the framework of an ethical organization and assist with identifying and encouraging good ethical standards.

The purpose of an ethical business is to create a triple bottom line of environmental and social as well as financial wealth (Spiller 52). It operates with principles such as honesty, fairness, caring, and courage, which guide an individual and business behavior (Spiller 52). The practices the business applies, such as those noted

previously, take account of all stakeholders, while performance measurement involves ethical accounting for the triple bottom line (environmental, social, and financial wealth). Measuring performance is key to progress. Once you have gotten accurate measurements, you must analyze them to see what adjustments need to be made. There is always room for improvement. Once you have analyzed and decided on what steps should be taken, implement them and follow up once again. Striving to be a company that implements the Four P s and maintains a healthy triple bottom line is an ongoing process that constantly needs work.

Mr. Stiller has created an inventory, if you will, of desirable practices for each of the six shareholder groups. To foster environmental care, an organization should reduce, reuse, and recycle materials, conserve energy, and conduct environmental audits. With regard to employees, key practices include effective communication (that s a biggie), learning and development opportunities and the promotion of safe and healthy work environments that provide equal employment opportunities. To keep customers satisfied and happy enough to keep coming back, organizations should practice industry-leading quality programs, full product disclosure and safe products. Suppliers benefit from long-term purchasing relationships along with fair and competent handling of conflicts and disputes. Shareholders should receive a good rate of return, comprehensive and clear information and effective management of corporate government issues. Last, but not least, innovative giving to the community, volunteer programs and support for education and job training programs strengthen the relationship between business and society. This kind of care for the environment will help foster a good relationship with the surrounding community because the people know that the organization cares about the area it is located in. Practicing these charitable and ethical methods in turn will produce results along the triple bottom line and provide the community with an ethical and generous, yet profitable, organization.

Even though more and more people are beginning to realize the long-term benefits of running an ethical business, there will always be crooked bosses. People just need to know how to deal them. A survey of 2,000 conducted by the International Association of Administrative Professionals indicated that eighty-eight per cent of secretaries say they have told lies on behalf of their boss. A quarter have bosses that fake expense reports, a fifth have seen information destroyed or carted off, and a third have observed time sheets doctored. Some have even been asked to hire a prostitute (Mulrine 76). There are ways to avoid these situations and even prevent them from happening. Employees can negotiate the slippery slope before loyalty becomes culpability in a court of law (Badaracco 103). First and foremost, by having ethics chats with your boss before you ever need them could help stop trouble before it ever starts. Most employees get into trouble by not broaching the issue of ethics with a boss until they find themselves knee-deep in unexplained packages and fake documents (Braybrooke 175), says Ellen Bravo, executive director of 9to5, National Association of Working Women. This is why whistle blowing is rare. People can not tell on the guilty boss because they have been entrapped into the wrongdoings also. You must be aware enough and even brave enough not to blindly get caught in the ring. One should also check out the boss before you sign on and then establish an understanding with your boss during the first week on the job. Rule number two: always play the loyal protector. Even if you suspect your boss of wrongdoing, accusing him or her of illegal conduct should not be your first course of action. Many bosses are truly unaware that their behavior breaks any rules. The best approach would be to say, I want to alert you to something that might not look good to other people. This might get through to a truly oblivious boss — and tip off a dishonest person that you are on to the behavior (Mulrine 77). Even if the talk goes well however, start a paper trail. Protect yourself. Precede a conversation with a memo saying: I d like to learn more about the process here. I was hoping you could explain to me why the approach you have asked me to take with bids is better than the approach I though we used (Mulrine 77). If all else fails and good cop does not work, play bad cop. Some bosses just will not get it otherwise. Skinny it right down for them, and paraphrase it back — In other words, Phillys, you want me to lie to the tax auditors? Most employers will back off. If they do not, emphasize that their behavior makes you uncomfortable (Ferrill 234). Finally, you should know where to turn. If your boss is a an incorrigible criminal, most companies have someone to turn to — internal company auditors, ombudsmen, or (the latest rage) ethics officers (Mulrine 77). If your company is not supportive, find an attorney who will be. You do not need to become a part of a fraudulent company. Just as much money can be made through honest business methods. There are methods of protecting yourself from becoming involved in something you know is wrong.

Business ethics are of growing importance in today s economic world. In the long run, ethics will make or break a company. It takes us back to an old saying: cheaters never win. Running a clean, honest business not only puts you ahead in life, it will also move your organization forward with a clean conscience. There will not be any looking over your shoulder or dodging bullets. Customers will recognize that they are being treated fairly and continue to return to a company that provides good, ethical services. People do not want to deal with someone whom they feel is always trying to pull the wool over their eyes. Most people appreciate an honest, hardworking company with a code of ethics or mission statement hanging on the wall in the office. More and more companies are investing time and money into learning more about conducting an ethical business and an increasing number are attending workshops. The 1998 Business for Social Responsibility USA conference attracted 850 participants for thirty-two countries. This compares with 650 people at the 1997 conference. This statistic reflects just how important business ethics are becoming. The more businesses learn about ethics, the more they will be able to practice the future of ethics.

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