Business ethics: principles, practices, and organizational implications

Business Ethics

Ethics is defined as the study of the nature of morals and morals choices. Generally speaking, ethics exists where standard rules no longer apply and value decisions must be evaluated. Where business ethics diverges is that it deals with ethics as specifically practiced in a commercial enterprise. Each setting has its own particular set of ethics, and business is no different. One of the most significant points of difference is that businesses must earn profit, as a point of obligation to the shareholders. This can create goal conflict between the drive for profits and other ethical considerations. Another point of difference is the degree to which businesses are beholden to laws and regulations. Businesses are often subject to far more intense legal scrutiny than are other actors in society and this adds a complicating layer to business ethics. A third difference is that within the business there are individuals who must balance their own ethics, goals and motivations with their obligations to the business and its goals. This means that business ethics cannot be considered strictly an extension of personal ethics. So while the field of business ethics begins with the field of ethics as a whole, the structures particular to the function of business make the study of business ethics a unique field unto itself, with its own specific nuances.

2) Creating social responsibility requires a number of steps. The company must first set out a definition of the term, in order to provide some guidance as to the objective. Then the ethics must be embraced and implemented by senior management. The code of social responsibility should be easy to understand and readily available to all employees. There should be training to help reinforce the standards of social responsibility in the workplace. Another component is to have personnel capable of providing guidance. Situations will inevitably arise where the employee will not know the course of action, so there should be a way for the employee to seek, confidentially, advice and guidance. There also needs to be system of punishment for those who violate the company's standards of social responsibility. Lastly, the standards should be subject to continuous evaluation and improvement.

3) Sexual harassment in the workplace is defined as unwanted sexual attention. The status of the actors involved is irrelevant, as is the specific nature of the unwanted attention. While incidences of sexual harassment may have declined, the issue remains important for several reasons. The first is that it still occurs. There are still work environments where sexual harassment is condoned or permitted. The second reason is that while modern business practice generally stands against sexual harassment, we operate in a multicultural work world and all of the standards of behavior must be understood by the entire workforce. Each new worker must be made aware of the issue, its definitions and its consequences in order for incidences of sexual harassment to be removed from the workplace.

4) Social responsibility in the business context refers to the responsibility that businesses and their employees have to society as one of the external stakeholders. There are many external stakeholders for any business. Society as a whole is impacted by the activities of business. In the normal course of business, those impacts are seldom negative but managers must always be aware of the impacts to ensure that they do not become negative. Having social responsibility means to be responsible for the actions of the company with respect to the impacts of those actions on society. The actions of business have an impact on the external world. Those impacts must be taken into account as part of the greater ethical responsibility of the company. Actions that result in adverse consequences to the community or environment at large should be avoided.

5) the case on page 52 is about social responsibility. The game is controversial because some of its elements are not appropriate for the entire audience to which it will be exposed. The case illustrates that different versions of the game are acceptable in other cultures, which shows that the unique nature of different stakeholders must be taken into question when considering the social responsibility to those stakeholders. The ethical issue s for Kent are whether or not it is ethical to put the game in a place where it could be exposed to elements of society for whom it could be potentially detrimental. Kent's options are to go ahead with the original plans, to modify the game or to take the game to other markets where marketing it would not be considered a violation of the company's social responsibility.

Sex, violence and gambling are all controversial subjects in the United States, but all have significant commercial value. Some groups feel that these are negative attributes and should not be commercialized, while others view them as acceptable within certain contexts. Controversy typically emerges when the use of sex, violence or gambling is done out of what most of society would consider an acceptable context. In other countries, however, cultural norms are different. It is perfectly acceptable to market sex, violence or gambling to other countries if those elements are within the cultural norms of those societies. Cultural norms differ, and it is poor management to view the norms of other cultures through the lenses of your own culture.

6) There are several benefits to business ethics. One is that it elicits greater employee commitment. The more ethically a company treats its employees, the more likely they are to make sacrifices for the company. Similarly, strong ethics contributes to investor loyalty. Studies have shown that firms whose employees have a high degree of honesty and integrity earn higher returns than firms whose employees do not consistently demonstrate these traits. Investors recognize that an ethical culture "provides the foundation for efficiency, productivity and profits." (p.19). Ethics also contribute to customer satisfaction. This leads to stronger long-term relationships with customers, which is a key revenue driver in many industries. All of these factors contribute to the bottom line - strong ethics leads to higher profits. Unethical firms suffer from poor returns and declining stock prices.

7) Transactional leaders are those who seek to influence employee behavior by barter or bargaining. Transformational leaders are those who seek to influence employee behavior through motivation and trust. Transactional leaders are thus more focused on conduct, desired outcomes and a dynamic relationship. The transformational leader will foster a culture that promotes the goals, rather than demands them. The two therefore have very different views on employee motivation. The transactional leader must create a benefit for the employees in order to manage their behavior whereas the transformational leader must create a motivation in order to manage the behavior. Both types have the same objectives with regards to setting goals and ensuring that employees reach those goals, but the two types of leaders have very different approaches to the task.