Business ethics usually start with personal ethics and with a set of core values that each individuals has and uses in his relationship with others and in his role in the community. This paper looks at these core values and extrapolates them in the business practice, looking at a concrete case, that of Enron, to prove the point.
¶ … ethics is and I will link this to my own belief system. According to Baird (2012), the study of ethics has the objective to make people reflect on two particular topics of interest: the individual and the community, namely what kind of people we want to be and what kind of community we want to live in. This is why, as Baird pointed out, the discussion about ethics, business ethics included, should start from a discussion about our core value.
I would like to briefly refer to these, in connection to the course and as these values apply to the course and to this discussion. My belief system is based on three main pillars and the first pillar is, I believe, the most important for the discussion at hand. It refers to not lying. I believe that lying is the worst thing that could happen for an individual, both in relationship with himself and in relation to the community and to the other members of community. This is not only a belief related to reputation, but a core value and belief related to deontology.
For me, lying disturbs the relationship between individuals because it automatically leads to the loss of trust between them. To a greater scale, from a business ethics point-of-view, if a company lies, its customers and stakeholders will simply never believe that company again. With this in mind, I would like to think a bit about the example of Enron. Up to the company's bankruptcy, it had been one of the most respected companies in the world and an example of innovation and new approach to current affairs in the energy sector.
Once things started to be reveled about the company, facts that seemed to point out that the company was lying, the road downhill was incredibly fast. The company went from being the most respected to the most hated in the U.S. Enron became synonymous with institutional lying, with hiding and distorting information in order to maintain share prices at significant levels, with onerous reporting etc. Nobody ever trusted Enron again, because it had lied, and the company crumbled fast.
So, from a business ethics point-of-view, the individual advice of "don't lie" can be transformed into an institutional one: companies, do not lie! It is interesting to note how lying, for companies, can sometimes be legal. If, for example, a company cites the results of a test that point out to the benefits of a certain product or service it is commercializing, that is not considered lying. It is not, but, at the same time, it should also present the conclusions of other studies that contradict the given theory. Hiding the entire truth is also a form of lying and presenting just your side of the story is another.
From this perspective, as previously mentioned, I started with my core value (do not lie) and moved to a wider perspective to analyze how my own core value should apply to entire companies and how business ethics could incorporate such a value as not lying. Another core value that I have, following the initial thesis of the paper that goes from personal to community and company, is the respect for others.
There is a good saying that you should not do to others what you do not want done to yourself. The more general idea is, I think, that you should behave in a way that does not have a negative impact on the other people around. This can be discussed at a macro level as well, when referring to companies and other organizations. Respect for others means following your objectives (maximizing profits, among others) in a way that is considerate to the other players on the market.
Respect for others on the market could even consider things such as price dumping. Selling at a price that is significantly lower than the market price is not considerate for the other participants on the market. It is understandable that an economic entity would want to maximize its competitive advantages, one of these being potentially the production costs, but being considerate is the key idea in this analysis: there is enough profit to be made on the market without lacking ethics.
My third core value is to analyze each situation. The idea here is rather simple: each situation is different from one another. No plan should be made beforehand, because conditions change often and the decisions should be made accordingly, after judging the new situation and understanding what the position of all actors is.
This seems to parallel the contextual worldview approach, which, according to Baird (2012), proposes that the individuals analyze each specific situation and make decisions accordingly, deciding which way to behave in each particular situation. Situations differ from one case to another and decisions need to consider all these differences.
This obviously applies to companies and business entities as well. The current business environment is complex and very dynamic. The conditions on the market change in a very short period of time. It is important to make decisions in real time, decisions that match and reflect the updates on the market.
This also affects business ethics. Making a decision according to the market conditions should mean that the decision makers are also able to be aware of any ethical considerations. The conditions can be properly considered in a clear analysis and the decision made will also include ethical issues, looking at the different stakeholders and what their needs are.
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