Business Ethics: Decision-Making Frameworks and Corporate Responsibility

Introduction to Business Ethics

Employees and business management personnel are taught business ethics as a fundamental guideline. Business ethics is tasked with assigning a particular meaning and role to the enterprise as a whole. Taking ethical decisions requires keeping certain principles and practices in mind. This paper presents an argument on the key points regarding ethics and sets up a scenario in which business ethics frameworks are applied to a real-world case.

Foundations and Expert Perspectives

In practical terms, business ethics entails working within reasonable means in a financial environment. Certain particular aspects are required to achieve that (Brusseau). Ethical decisions are guided by principles, comprehending the facts, making valid arguments, and fundamentally entails discerning between right and wrong (Brusseau). The overall result is secondary to the process at hand. The end result consists of constructing and making valid arguments. Hence, business ethics is not brainwashing—it is fine-tuning. Conclusions are formed from transparent values, confirmed facts, and viable arguments (Brusseau).

With business ethics in perspective, questions arise about the roles and responsibilities that corporations and leaders should have apart from producing revenue. The academic world commenced serious work on ethics only recently (Brusseau). The very first international-scale academic conference on business ethics took place in 1974. A textbook was published subsequent to the conference, and courses were taught in business schools as well (Brusseau). According to Larron C. Harper, director of both graduate and executive education programs at Samford University's School of Business, workers need to form their own principles and find a company that promotes those principles. Candidates should inquire about company values whilst applying at a firm (Brusseau). Then, the candidate must ensure that those values are upheld in reality, not merely limited to a memo.

The responsibilities of employee and employer are closely tied with each other, according to John C. Knapp, PhD (Archibald, 2007). Knapp is the director and professor of The Center for Ethics and Corporate Responsibility at Georgia State University and remains in constant contact with business leaders. For all sizes of organizations, Knapp stated that good ethics and good relationships are closely tied (Archibald, 2007). When questions and candid conversation are not allowed, one should reflect and ponder the reason. Knapp believes something is missing in the relationship.

Competent corporations allow freedom of questioning and deliver concrete answers, according to William I. Sauser, Jr., PhD, a management professor at Auburn University (Archibald, 2007). Sauser thinks that firms should consider ethics during promotion decisions, rewarding the most ethical employees (Archibald, 2007). Harper contends that employees need to pursue a particular format for questions and avoid pessimistic statements like "I don't think" or "why should we." A better approach is to suggest alternative directions.

Ethical Decision-Making Frameworks

Ethical decision-making influences not just professional life. Consider a simple question: Which dress are you wearing today? What were the working conditions of the laborers who made it? Are you content with those conditions? Hence, certain aspects are taken into consideration while making ethical decisions (Swinton, 2007).

Being ethical can sometimes entail stepping outside the confines of law. Certain actions are possible but not ethical at the same time—the case of cloning made possible with biotechnology is an example (Swinton, 2007). This form of ethical decision-making is quite difficult, since the consequences and implications are far beyond human comprehension and current knowledge. When taking decisions solely by oneself is not enough, the next step is to take a collective decision based on others' experience and knowledge to reach an informed conclusion (Swinton, 2007).

The next essential step is assembling all the facts. What are the known quantities and unknown quantities? Who is affected by the decision? Were they kept in the loop (Swinton, 2007)? After gathering information, assess the options using established ethical frameworks. Several different ethical methods assist in making the best ethical decision:

Once the decision is made, implement it with immediate effect. Review the decision and amend it if necessary. Sometimes information changes, and with change comes a responsibility to alter the decision (Swinton, 2007).

Finally, apply a transparency test: Can you elucidate the events to your parents? To a random person you meet? On national television? If not, revisit your decision before implementing it (Swinton, 2007).

The KDCP Case Study: Applying Ethics in Practice

Consider one instance of how business ethics come into play. KDCP is a company that prepares students to excel on the SAT exams. The students had an excellent session learning exam questions and gaining tips, tricks, and pointers about SAT preparation. However, internally, KDCP had obtained actual SAT exam papers and employed them in their student preparation materials.

It is unclear how many questions students prepared appeared in the actual exams, but some did (CB-Karen Dillard). The College Board, the parent company of the SAT, took KDCP to court. The lawsuit was filed in the category of copyright infringement, but the real issue was determining the penalty. The College Board had a concrete case (CB-Karen Dillard). As KDCP saw its bleak future, it decided to settle with the College Board with an amount of $400,000 worth of free SAT preparatory classes for underprivileged high school students who could not afford tuition (CB-Karen Dillard).

This case raises several important questions. For those who could study in this preparatory session for free, it is good news—they can study and prepare for SAT exams at no cost (CB-Karen Dillard). But what about the paying students? What would they think? Their parents worked hard to pool funds and enroll them in SAT classes while others study for free. Some may see it as increasing competition (CB-Karen Dillard).

Some of the enrolled paying students probably pooled funds themselves by working low-wage jobs. They must have flipped burgers and served popcorn in cinemas to pay up (CB-Karen Dillard). Keeping this frustration and anger in mind, can one design a utilitarian case against free SAT classes? From a utilitarian point of view, could the College Board have refrained from publicly revealing the information to avoid displeasure among paying students? (CB-Karen Dillard). After the news was leaked, could the College Board engage in damage control and cancel the free SAT classes while keeping the original punishment intact?

There were discussions about canceling the test scores of students who had inside help from KDCP classes, which had access to actual exam booklets. Parents and students maintained that they remained unaware the whole time and had paid for test preparation only (CB-Karen Dillard). They were unaware that they were preparing from actual exam papers. Hence, from a rule utilitarian perspective, how strong is their case for score cancellation? From an act utilitarian perspective, how strong is the case for score retention (CB-Karen Dillard)?

The annual earning of the College Board CEO is $830,000. How does one reduce this income in a utilitarian framework? If one were a utilitarian, how would one approach his earnings given the chance (CB-Karen Dillard)? The salary could be part of a settlement to teach in classes for the underprivileged community and improve their self-respect and image through social responsibility (CB-Karen Dillard). One can make a case for both the College Board being an egocentric company and an altruistic company. Were matters handled keeping ethics in mind? Was there room for improvement?

Many newly published reports discuss the occurrence of fraud in the business domain and provide contradictory evidence on whether misconduct amounts are increasing or decreasing at firms (Verschoor, 2014). The amount of misconduct in the United States of America might be lessening, but it is growing worldwide. The 2014 Global Economic Crime Survey, "Economic Crime: A Threat to Business Globally," published by PricewaterhouseCoopers (PwC), is one such report that highlights elevating unethical behavior. According to the report, economic crime remains a worldwide concern for firms of all sizes in each region and in nearly every sector of industry. Thirty-seven percent of firms are affected by economic crime (Verschoor, 2014). The rate of frauds rose from 30% to 34% between 2009 and 2011 and peaked at 37% in 2014.

Economic Crime and Global Ethical Challenges

As per the survey, the most commonly reported kinds of frauds are:

These economic crimes originate most frequently from:

According to PwC's Steven Skalak, "the negative outcome of economic crime includes flawed business processes, declining employee integrity, and staining of corporate reputation" (Verschoor, 2014). These statistics underscore that ethical lapses are not isolated incidents but systematic challenges requiring institutional attention and commitment.

Conclusion: Ethics as a Core Business Value

In the innovation age, the rise of growth markets, and an economy-centric world brings new technologies, government roles, and global competitors, creating numerous constraints, demands, and opportunities. Nations and citizens are working collectively to spread democracy and freedom, nourish free markets, secure individual property rights, and inculcate respect for human law and the environment.