theories of business ethics

12 Dec theories of business ethics

These theories propose a set of ethical principles that can be easily assessed and expressed by the typical business person--not only by ethical philosophers. Required by simple economics, this obligation is … This makes their every act conditioned to their parents’ teachings and orders. Business ethics is concerned with the behaviour of businessman in doing a business. are perceptions about what is good or bad, right or wrong. Bowen, S. A. For example, bribery by its very nature is wrong irrespective of its consequences. A conflict arises in trying to achieve both simultaneously. It might look like a crowded work floor with only one means of exit. Top management can communicate the ethical standards to the lower management which can be further transferred to the operational level. Tolerance refers to increase in the level of adaptability of an employee to various organizational changes. ii. The word ‘ethics’ refers to principles of behaviour that distinguish between good and bad; right and wrong. But this will first require it to come out from its narrow mentality and even narrower goals and motives. It is abstract in concept. This View stated that business must conduct its affairs purely through altruist motives and that profit was a dirty word. Playing the business game by the market rules will ensure that the ‘individual hand of the market’ would generate social welfare to community. Ensuring that the employees know about common psychological factors of unethical behavior and the ways to deal with them. It is a person’s own attitude and beliefs concerning good behaviour. Family, School and Religion: The formation of ethics begins early in life. It was Friedman who forwarded the classical view that the only responsibility of business is to earn profits, arid he goes on to say, in his book, ‘Capitalism & Freedom’, thus-, “There is one and only one responsibility of business-to use its resources and engage in activities designed to increase its profit so long at it stays within the rules of the game, which is to say, engages in open and free competition, without deception or fraud. Many business people are religious individuals, but their business suit makes them blind towards human suffering. Dramatically opposite to the Unitarian View, classical economists like Adam Smith and Milton Friedman asserted that the only goal of business should be profit maximisation; and that ethics and morality plays no part in business conduct. Mrs. Priyanka A. Bansode Assistant Professor Electronics and Telecommunication, Engineering Walchand Institute of Technology, Solapur Business ethics refers to the application of moral principles to solve business problems. 3. Employees, customers, shareholders and the general public have the right not to be intentionally deceived on matters about which they should be informed. It deals with the enforcement of the rights of employees in an enterprise. For example, Concern for Task (Productivity) and Concern for Human Beings (workers) are bound to pull each other in opposite directions. Ethics is a “consideration and application of frameworks, values and principles for developing moral awareness and guiding behaviour and action”. 16. The nature of a business's operations has a major influence on the ethical issues with which it … This View states that society consists of a number of subsystems, and business and morality are just two of these subsystems. Understanding the importance of ethics in human resources is crucial for any business owner, whether in a local startup or a multinational powerhouse. The communication should be in cleared, open and justified manners. Nobel Prize winning economist, Milton Friedman, argues that using resources in ways that do not clearly maximize shareholder interests amounts to spending the owners’ money without their consent and is equivalent to stealing. Here their benefit is the same. He further believed the social responsibility of business is contrary to basic business functions. Principle of Humanity – It is needful that every businessman should follow the human values, human decorum and human aspects within their policies, programmes and different working areas. Principle of ‘non-violence’- It protects an organisation from strikes and lockouts. 14. (e) Insider trading, executive compensation. Values and their Impact on Human Behavior: People are not born with values; rather they acquire and develop them early in life. 4. Then, he wants to enjoy social status continuously and avoid unjust or immoral business activities. (2004a). In India, most of the businessmen believe in good business ethics. All the behaviour and activities should be based on values and service motive in business. They tend to be broad views of life and are influenced by parents, teachers, peer groups and associates. Since all subsystems within the society are interlinked and interdependent, so also are business and morality interlinked. Parents have obligations to their children and they must provide for their children even when the money could be more beneficial for orphans. It is not always easy to divide managerial actions into clear-cut compartments of ethical and unethical behaviour because of certain complicating factors. This principle requires that decisions and behaviour be based on universal principles associated with being a responsible member of society. Thus, the motive with which actions are done determine their Tightness. Business ethics is the application of ethical theories and concepts to activity within and between commercial enterprises, and between commercial enterprises and their broader environment. Sincerity – Sincerity refers to truthfulness and transparency in the nature and behavior of employees in an enterprise. Compliance means conforming to relevant laws, regulations, policies, standards, procedures, or contractual obligations. Commonly, ethics is also referred to as “moral, good, right, just and honest. ii. Rationale of Business Ethics 20. Ethics seeks, to improve the human condition by focusing on the causes and consequences of these malprac­tices being done by the business organisations. Our mission is to provide an online platform to help students to discuss anything and everything about Economics. For example, birth control is mandatory in Communist societies but not in Catholic Christian societies. Theodore Levitt, the well-known psychologist, believed that if ethics and morality were allowed to enter the realms of business, then there is a danger of business values ultimately dominating over social values. 1. Unethical practices create problems to businessman and business units. 5. We should be devoted to our efforts to do the work for others. It usually specifies methods for reporting violations, disciplinary action for violation and a structure of the due process to be followed. These are ethical questions raised about a particular business. Everything you need to know about business ethics. The Corporation would eventually invest itself will all-embracing duties, obligations, and filially powers-ministering the whole man and moulding him and society in the image of the corporation’s narrow ambitions and its essentially unsocial needs”. Friedman feared that if business ethics formed a part of corporate culture, ultimately the customer would be called upon to bear the cost of the ethical practices of the organisation, as Friedman erroneously assumed that such ethical practices would increase the prices of the organisation’s products. This case indicates that business should consider ethical principles while making decisions in order to achieve its basic objective of survival. Our moral belief about life changes over time. (b) Rule Utilitarianism under which an action is right if and only if it confirms to generally accepted rules and produces the greatest balance of pleasure over pain. They must follow the rational attitudes and behaviour. 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