BUSINESS ETHICS NOTES
Definition of Ethics
Ethics is the study of how our decisions affect other people. It is a
study of people habits and their effect on others. It is a set of moral
values or principles used by the organizations to steer the conduct of
both the organization itself and its employees in all their activities
whether internal or external.
Business or management ethics
therefore are the standards that guide managers in line with their
actions and decisions to determine whether they are good or bad or right
or wrong morally. In this case they are generally accepted ways of
behavior expected of managers and businesses. Businesses must balance
the interest of employees against the needs of the overall business
objective. In most cases managers are the ones likely to confront
ethical dilemmas in the course of their duties. Some of the dilemmas or
ethical problems that arise among managers include the following:-
- Conflicts between the personnel managers desire to improve quality
of employee working life versus job extension and the insistence of
other managers that the division of labor is employed as extensively
as possible and that salaries and
condition be kept constant. - Senior management demanding the personnel officers to deliberately
misrepresent unsound personnel policies in order to promote them to
the workers. - Awareness that certain employees are not receiving fair rewards for
their effort. - Having to decide whether to report to the police illegal acts of the
employer or even employee.
Levels of questions addressed in ethics (Ethical Questions)
- Societal level
At this level we ask questions about basic institutions in a society.
For example, is it ethically correct to have a social system in which a
group of people are systematically denied basic rights? - Stakeholders level
This includes the employees, customers, shareholders and others. The
question is how a company or business organization should deal with
these groups who are affected by its decisions and how should these
groups deal with the company in question. - The moral discourse level
This is also known as the internal policy. Questions addressed are about
the nature of the relation of business organization and its employees
i.e. managers and others. - The personal level
Questions addressed at this level are about how people should treat one
another within an organization. For example, should we be honest with
one another whatever the consequences.
Ethical language
This refers to ethical terminologies. They include;
- Values- values are relatively permanent desires that seem to be good
in them. For example, peace or goodwill. They are therefore answers to
the why questions. - Rights- these are claims that entitles a person to take a particular
action. They entitle room or sphere of autonomy or freedom. Rights are
rarely obsolete because they are limited by the rights of others. - Duties- duties are obligations to take specific steps, obey laws.
E.g. paying taxes. - Moral values- these are roles for behavior that often become
internalized as moral values. These roles guide management through
situations where competing interest collide.
Common Morality
This is a body of roles covering ordinary ethical problems. They include
the following;
- Promise keeping.
According to this value members of society and business organizations
must keep their promises if business is to be continuous. It also means
telling the truth. - Non malevolence
This means refraining from harming others. Morality by its very nature
requires that we avoid violence or using force in settling dispute. For
example, using the police to subdue rioting employees.
- Mutual aid
According to this rule individuals must pursue both the individual
interest and groups’ interest if this is not costly i.e. individuals
should help one another if the cost of doing so is not great. - Respect of persons
Common morality requires us to regard other people as ends in themselves
but not as mere means to our own ends hence we should regard others as
people and also regard their desires as important. - Respect of property
It means people should get the consent of others before using their
property.
The criteria of evaluating an ethical manager from an unethical manager
- Through the managers’ utilitarian outcomes. If a managers behavior
results in the greatest wound for the greater number of people. It means
that ethical managers are those whose decisions yield or consider
society demands. This is assessed through social responsibility. - If the manager’s behaviour respects the rights of the other people or
parties then the manager is ethical
This includes issues such as human rights of free consent, free speech,
privacy and due process. Ethical managers therefore are those whose
decisions consider the stakeholders of the business organization. - From criteria of distributive justice
A manager who behaves ethically respects the role of justice such a
manager does treat people arbitrarily but equally and fairly. - From the way the managers deals with internal policy
This involves the mutual obligation of managers and other workers.
Ethical managers are those who treat subordinates and other managers as
human beings but not in a discriminating manner. For example increasing
their wages, creating better work environment. - From the way a manager
deals with his/her personal issues.
Ethical managers behave professionally in terms of the way they handle
themselves and their work.
How managers can improve ethical behaviour in their organizations
- By establishing corporate codes of conduct. This guides new and
existing members in dealing with each other and the customers. - Encouraging good working relationship among the workers
- Encouraging good working relationship between employers and employees
- Ensuring that the rights of the individual in the work place are
protected - Ensuring that professional
relate professionally to their clients - Helping workers to protect and uphold the reputation of the organization
- Helping workers to develop proper skills and the right attitude
towards their work
