Ethics System, Essay Example

Abstract

Ethical conduct in the business world is a pragmatic and necessary element. Laws regarding financial interactions and various aspects of commercial activities are in place, but laws alone do not dictate the ethics of any business itself. They are an integral and vital framework within the business. A valid ethics system provides a stable foundation which can, by its very widespread nature, accommodate changes in the business community, establish solid relationships, and promote trust within the public.

Ethics in Business Defined  

“Ethics” is usually used to mean “good ethics”, although the word itself has no actual, inherent meaning in either direction. It is more the study or determination of what is right or wrong behavior, based upon an accepted notion of an over-riding morality. There are gray areas, to be sure, and what is the “ethical” thing to do is not always clear, or agreed upon by all concerned. The general consensus of rightness and wrongness in basic matters aside, morality itself is often open to interpretation. This is especially true in personal relationships and individual decision-making processes.

In business, however, a code of ethics is far more free of the ambiguities found elsewhere. The nature of business is commerce, and commerce is a network of many layers and rules, all of which fundamentally go to fair dealing for all parties: “Business ethics is about relationships, values, justice, and identity (personal, professional, corporate, national, and global)” (Weiss, 2008, xxiii).

As obvious as it may seem, business ethics is really about business, greater moral concerns aside. It means that those engaging in the business, either from a consumer or provider standpoint, are approaching each transaction with the understanding that integrity and fairness will be demonstrated mutually. The consumer, whether a lone individual or a city leasing a product, is ethically expected to provide the agreed-upon compensation for the product, as well as doing so in good faith. That is, there can be no deception as to motive, in ethical terms; the person who purchases bleach at the supermarket is ethically bound to not use the product in a dangerous way. So, too, is the business source ethically obligated to deliver whatever product or service it accepted compensation for, and in the fashion made clear to both parties. Business ethics basically and simply translates to open, complete fairness in business dealings of any kind.

Breaches of Ethics

Bribery in business was for centuries an accepted form of doing business, and in some countries it is still considered an ethically acceptable, modern business practice. The issue is not as clear as many would like to believe, because “Bribery can be defined differently in varying situations and cultural environments” (Ferrell, Fraedrich, Ferrell, 2009,  p. 68).

There is usually, for example, a different way of seeing “active” bribery as compared to “passive”, and the party who offers the bribe is typically held to be the greater violator of ethics. The law tends to support this lighter view, as well. The fact remains, however, that the culpability is, from an ethical standpoint, the same. No matter the intent of the party offering the bribe, bribery is an action that requires reciprocation, or it does not exist.

Moreover, there can be no assumption of a “better” morality on the part of the receiver. There may be a circumstance where a business executive is desperately trying to keep his outfit going, that his employees may keep their jobs, and he will, in a panic, try to bribe a potential client for a contract he needs. The client may be in a position wherein no inducement is needed; he needs the contract as well, but he takes the bribe simply because he sees it as a bonus. In strictly ethical terms, the receiver is demonstrating poorer ethical conduct, even though he is the “passive” partner in the deal.

Some businesses approach the ethics of bribery as not an ethical issue at all, but as a cost-benefit analysis issue. If, for instance, the illegal action of the bribe is undiscovered and the business stands to profit from it in a long-term manner, it may be seen as removed from ethical considerations. This, however, ignores how fundamental ethics are in business. This sort of bribery is not a business action: “It is a political activity, because it is a subversive way to change the rules of the economic game…into a system of unfair and invisible manipulation” (Malachowski, 2001, p. 289).

This alone renders it unethical for business executives to accept or offer bribes, for in doing so they completely undermine the structure of business itself. Bribery moves business into a wholly different arena, one in which rules and fair play are meaningless. The poor ethics of the activity aside, this also translates into an inevitable business collapse, because the guilty party removes the enterprise from the accepted commercial world in dealing in bribes.

Importance of Ethics in Business

It is virtually impossible to overstate how essential a solid ethical foundation is for a business, because it is the business’ foundation itself. No business is an isolated concern; by its very nature, it is dependent upon the larger world around it, as this world in turn keeps its presence valid. When ethics are breached, the business destroys its most valuable asset: public trust. Any disreputable action, from the taking of a bribe to unauthorized personal spending on the part of executives, sends the clear message to the public that this is a business with no integrity. As bad as that renders the situation for employees, it furthermore removes any reason at all for the public to wish to deal with it, because it can have no expectation of being treated fairly.

In business, as in life, people slip up. Sometimes, an ethical code may be violated with the best of intentions, or even unknowingly. This is why the smart business is always vigilant in regard to the ethics its people are manifesting. An understood base of ethics in place, “…a company should audit its adherence to its own ethics policies” (Frederick, 2002, p. 269).  A valid ethics system provides a stable foundation which can, by its very widespread nature, accommodate changes in the business community, establish solid relationships, and promote trust within the public.

References

Ferrell, O. C.,  Fraedrich, J., and Ferrell, L. (2009.)  Business Ethics: Ethical Decision Making and Cases. Mason, OH: Cengage Learning.

Frederick, R. (2002.)  A Companion to Business Ethics. Malden, MA: Blackwell Publishers, Ltd.

Malachowski, A. R. (2001.) Business Ethics: Methodological Issues. New York, NY: Routledge.

Weiss, J. W.  (2008.) Business Ethics: A Stakeholder and Issues Management Approach. Mason, OH: Cengage Learning.