Business ethics is the basic
understanding that is being perceived by the employees for choosing the right
or wrong. It prescribes the individuals behavior in the organization or the
work place. Business ethics shows the type of behavior that an organization or
a business entity should emulate and put more emphasis on, this shows the in
written and unwritten values principles and codes that the organization should
adopt. In this report we will analyze moral judgments that are not welcomed by
most scholars in the area of business ethics.
In the current business world
people are obsessed with some of the arrogant and irresponsible behaviors that
are motivated by the need for profit maximization this is the most important
function of any business for its stakeholders. The reason for all these mainly
comes from the issue of psychological egoism. This theory does not necessarily
mean that human beings are usually fond of behaving selfishly, but it on the
other hand means that human beings are always striving towards the satisfaction
of their own self-interest that are exclusive of the other parties’ interest (Michael, 2006). Nowadays, the
issues of compassion, love, friendship and the desire for social approval have
become the least approved in the business setup.
It is seen that the markets
will not operate without the ethical and moral behavior in the organization.
The aspect of profit maximization for the benefit of the shareholders has
become to be termed as an individualistic and unsustainable model in the
business environment. This is because it ignores the aspect of fairness and
justice that should be the basics of the organization.
The stakeholders model
suggests that the maximization of the wealth of the stakeholders should be the
ultimate goal for the business, its corporations are supposed to be the managed
to finally lead to the benefit of all the stakeholders who are mainly the
employees, owners, suppliers, customers, and the communities (Alexie, 2006). This
is seen as to being insufficient enough for its functions, because this model
does not recognize sufficiently the issue of human beings as having a united
consideration as compared to the reciprocal interest of their own.
There is a way that the organizations
have gone too far to the extent of considering the employees as only the
contributors of the bottom line and not as human beings that possess rights and
responsibilities. In the contrary it treats human beings as a cannon fodder
that can be used and discarded.
Technology is another issue
that has been reflected so much on the issue of the ethics in business. This
increase in the global communication of the information technology has led to
the merging of the markets and thus allowing the financial institutions to be
able to do their trading more easily and cheaply. This has led to the
separation of the families due to the limited space for the reflection for the
family. This is because people are left with a limited time for the family also
less time to be able to contemplate for the family as the people are being
caught up with the hysterical pace in the work place (Heath, 2009).
According to the business
ethics, it means that people should be loyal to the organization, but this is
basically due to the main reason being the fear for the authorities. In
addition to that in many societies, ethics is based on the religions system of
the place. These religious systems differ from one society to another, and also
in other areas they are not practiced and therefore have got little influence
on how people behave and on other places that use the system there is a greater
influence on their behaviors. Due to this factor, the business may not adapt
them to their system of corporate management. Therefore there will be no use to
adopt the ethics since they may have less or no impact on the organization.
The business morality is
neutral therefore, the issue of the firm having a common responsibility of
making profits for its stakeholders is not essential because the factor that
undermines the business from making profit is the need to be able to stay
within the countrys laws, this is because if it breaks the law the stakeholders
and the company will be fined and punished (Alexie, 2006).
On the side of the customers
relations to the company, the customers have a preference to deal with
companies that have a strong ethical profile. This gives a condition that a
company should be abiding with the ethical codes at all times and in particular
to all adverse conditions. If for instance the company that is seen to be
ethical is on the other hand seen to be betraying its codes, then the results
will be that there will be a greater damage to the company that had never
claimed these ethical standards in the first place. This is because the
customers will be disappointed and due to their nature they do not easily
forgive. Therefore as a result they will be willing to transfer their loyalty
to a different competitor and thereby the business will fall.
From the past, business has been
essentially a struggle in the market for which only the fittest will be able to
survive. This shows that, the consideration and entertaining the interests of
others will essentially mean that this will jeopardize the chances of survival
of the organization in the industry. Therefore, the entertainment of these
ethical issues will mean that the business competitiveness and the chances of
survival will lower to some extent (Capaldi, 2012). This goes by the myth that the
business success and ethics are at the opposite ends of the scale. It states
that a business will either be ethical and be unsuccessful or on the other hand
be unethical and be successful.
The myth states that although
the unethical behavior is not accepted on the organization, its effects are not
so much seriously harmful to the society. This issue is perceived to be as a
bad thing to the society but it may on a different perspective be not be a bad
thing either. This is because, thought it affects the society many ways, it
only affects a particular portion of the whole society but not everyone.
Therefore, this shows that even if the firm does not use some ethical
principles, it may only have few negative implications to the society and the
firm as a whole.
In some areas of operation,
the environment does not necessitate the norm of behaving ethically. Therefore,
behaving ethically for the benefit of the society and less benefits for the
firm may not be essential. According to the same issue, it is viewed that is
the majority of a particular environment does not have the ethical values or
the ethical values are not their norms, then there will not be a difference for
the company to be able to make an effort to turn things around (Alexie, 2006).
This goes with the saying that, a person should do whet others do in a
particular environment even if it is unethical according to the moral behavior.
Different businesses do not
have similar corporate structures. Therefore, it will not be beneficial for one
company to use and provide the watertight ethical rules that are used by a
different organization because it may not apply to the company. There are
different general guidelines that are used to help managers for the assessment
of the ethical implications of their decisions and behavior that they may apply
in the structures (Capaldi,
These guidelines may be as follows they should use a framework that obeys the
law, they should tell the truth, they should show respect for people, they
should stock to the golden rule that states that you should do to other what
you want to be done, they should practice participation for all employees, and
above all, they should do no harm to any body.
It is not necessarily that a
company should put in place the ethical standards for its employees therefore,
a company should take the ethical guidance position to a much further step.
This is aimed at maintaining the setting standards to be able to evaluate the
behaviors of the business in goodwill. Measures should therefore, be put in
place in order to prevent and control the unethical behavior in the
organization. The legislation and the regulations may be imposed to be able to
facilitate the control. These can be achieved internally by the use of the
setup of the management structures and the policies that can minimize the
ethical failures within the organization (Alexie, 2006).
The issue of survival for the
fittest in the business world also has been discussed further. Some businesses
engage themselves in the unethical practices for the sake of their survival.
Some of these practices are common and well practiced. There is the dog eat dog
myth, this myth states that due to the high competition in the business world
there is a need for one business to be surviving on the expense of another one.
This is because for a business that tries to accommodate the interests of
another business will never be successful. That business will unsuccessfully be
accommodating the interests of another business at its own expense. On the
issue of ethnicity, those businesses that try to be so much ethical will end up
weakening their positions due to the opening up of the gaps that may be used by
other dogs to attack them.
The issue that, ethics have no
place in the business has given the multinational companies a complex issue in
their operations. This is because the decision making that is aimed at ethics
is never profitable as compared to the choices that do not embrace the issue
the ethical element. There has been an inherent belief that, the nature of
prominent and successful businesses sometimes does not follow the lack of
ethics in their visions for better profit making (Michael, 2006). For one to be able to come up with
this decision there has to be some recognition for the ethical making processes
of many companies and also the reflection on the fiscal, organizational, and
operational implications on the perceived outcomes if the opposite choices are
to be made. On the same issue consideration should be made on the morality and
the progression of the moral behaviors on the business operations and their
implications for the companies to expand to the multinational levels.
It is however, perceived that,
ethical choices are not always the most sound business decisions that a company
can rely on. For example a pharmaceutical may discover that they could develop
a drug that can end the sickness of blindness in many people but there will not
be any financial benefit derived from it. In addition to that the costs that
were to be incurred were to be very high (Michael, 2006). The pharmaceutical may choose either
to recognize a moral suffering and produce the drug however costly, or on the
other hand neglect the moral obligation and stop producing the drug but produce
others that are have a benefit to the firm.
CASE OF PHARMACEUTICAL COMPANY
According to these two cases
the first pharmaceutical did not practice its obligation of benefiting their
stakeholders and also to represent them in their own interests in the best way
so far. This might cause a conflict between the interests of those outside the
corporate structure and the shareholders, employees and the administrators of
the company. This brings us to be able to understand the underlying reason as
to why the ethical choices are not applied freely in the business structure of
On a different perspective, if
the pharmaceutical was in favor of the drug production he would also be
committing an unethical decision on the side of the shareholders and the
standard of behavior that exists between them as per their contractual
agreement. Under this argument, since the corporations are institutions that
are economical, to apply the moral standards those are at the expense of their
revenues and that can prove a risk of the underscores will be very hard on
A challenge enters to the
multinational companies that often have their branches in many parts of the
globe. They are prone to entering different communities that have varied
standards for business operations and in their moral standards that eventually
determine their ethical behaviors in general (Heath, 2009).
As these companies pursue their expansion as a means of reducing their costs in
the long run with less legal requirements, the question of the ethical moral
standards is the most problem to their management policies that they can
In most cases most
multinational companies enter into the expansion into other companies with the
major aim of taking the advantage of lower taxes, fewer legal and social
constraints. Therefore, they enter into these markets with a small concern for
the moral and ethical practices for the operations for their business and
organizations. This means that for them to survive in these businesses they
must be able to adapt to these environmental moral practices as their ethical
standards (Alexie, 2006).
The greatest concern for the
business ethics is that, the ethics of the business may not be determined by
community in which the multinational business may be expanding to rather these
organizations may even not look at the places they expanding to but their
ethical choices may reflect on the on what is the best economic interest of the
company is. Therefore, business ethics must not look or focus on the issues
that affect the third party but also it must take into consideration on the actions
that negates the passive process of allowing harm to happen. For example a
company may not pursue the ethical choice or take an action because if they may
not have taken the action, they will be allowing harm to occur.
In order to determine whether
the ethical behavior of the business has got any impacts on the business
financial status, we need to be able to determine the effects of the ethical
and unethical behavior that occur both internally and externally. The internal
workers can be the also be affected by these ethical issues and in the long run
can act in various ways (Capaldi,
This means that the production efficiency, the distribution and the exchange
functions are to be influenced by the firms ethical issues that underlie the
To start with, in the internal
organization, the law and the governmental regulations usually determine the
ethical behavior, the stakeholders, that are external to the firm can also
affect the financial status of the business due to their influence on the firms
decision making process. The suppliers, customers and the stockholders are
likely to react directly through the buying and the selling activities, and
this has an impact in that influences the press, local communities and the
society. Therefore, to be able to answer the relationship between the ethical
and financial position of the organization will require the organization to
analyze the measurements of the effects of the ethical or unethical activities
if all groups that affect the organization and that each and every organization
should take a practice that best fit its corporate and operational structure (Michael, 2006).
To be ethic in business or not
means that the organizational corporate structure is able to take consideration
and be aware of the possible consequences of the actions of the firm before
they are to take place, making the reasoned moral judgments about the
consequences, and choosing the actions that are most important to the
organizational structure and that can cause less harm to both parties of the
organizational structure. To be able to do this analysis the corporate
structure should be able to ask itself questions such as what is right from
wrong, what is or what ought to be, how to be able to get out from what is
ought to be, and what is our motivation.
In conclusion to this issue
the determination of immoral judgments or ethical and unethical issues in
knowingly deciding the right decision for your organization that affects it in
the long run (Alexie, 2006). Some ethical issues can be seen as
being unethical to some other organizations and even to the regulatory
authorities. On the other hand some other unethical issues may be considered to
be ethical to the surrounding community or environment. Therefore, it is
basically important for the organization to try to meet the interests of both
parties of the organization. Profit maximization being the major concern of any
corporate structure should be analyzed keenly for the determination of the
ethical policies that govern the day to day activities of the firm.