increasing social impact of business, ethics has emerged as a discrete subject
over the last 20 years. Business ethics is concerned with exploring the moral
principles by that we can evaluate business organizations in relation to their
impact on people and the environment.
are four types of ethical problems that are common in business organizations - human resorting, conflicts of interest, customer confidence and misuse of corporate resources.
Human-Resorting Ethical Problems
relate to the equitable and just treatment of current and potential employees.
Unethical behavior here involves treating people unfairly because of their
gender, sexuality, skin color, religion, ethnic background for example.
Conflicts of Interest
particular individuals or organizations are given special treatment because of
some personal relationship with the person or group making the decisions. For
instance, a company might get a lucrative contract because a bribe was paid to
the management team of the contracting organization, not because of the proposal’s
Involving Customer Confidence
involves corporations that behave in ways that show a lack of respect for
customers or a lack of concern with public safety. Examples here include
advertisements that lie (or at least shield the truth) about particular goods
or services, and the sale of products, such as drugs, that a company knows to
Misuse of Corporate Resources
involves employees that make private phone calls at work, submit false expense
claims, take company stationary home among other things.
financial scandals that have rocked the corporate world in recent years (Enron,
WorldCom, Parmelat for example) involve a number of these cases that senior
managers have engaged in improper bookkeeping and making companies look more
financially profitable that they actually are. This increases the stockholder
value of the company so that anyone with stock profits directly. Those
profiting will include those making the decisions to manipulate the accounts that
would qualify as a conflict of interest. However, the fall-out from the
downfall of these companies affects stockholders, employees and society at
large negatively that results with innocent people losing their retirement
reserves and/or savings as well as employees losing their jobs.
Holding Those Accountable for Such
response to identifying and holding an individual or group of individuals
responsible for such unethical behavior as the perpetrators is an
oversimplification. Most accounts that are restricted to the level of the
individual are inadequate. Despite popular belief, decisions that are harmful
to others or the environment and are made within organizations are not
typically the result of an immoral individual seeking to gain personal benefit.
While individual influences such as the employee’s level of moral maturity or
the locus of control may be factors, we also need to explore the
decision-making context in order to understand why an unethical decision was
made. For example, group dynamics very
often influence the decision-making process.
particularly important group-level influence is group think, a phenomenon identified by Irving Janis in his research
foreign policy groups. The research demonstrates the presences of strong
pressures toward conformity in these groups; individual members suspend their
own critical judgment and right to question with the result that they make bad
and/or immoral decisions.
company in which the dominant approach to business ethics is social obligation,
it is likely to be difficult to justify a decision based on ethical criteria. Morally
irresponsible behavior may be condoned as long as it does not break the law.
Legal loopholes, for instance, may be exploited in such a company if these can
benefit the company in the short-term, even if they might negatively influence
others in society.
situations, it is clear that a business has behaved unethically such as when a
drug is sold illegally, the company accounts have been falsely presented or
where client funds have been embezzled. However, what is more common a scenario
and of greater interest are situations that pose an ethical dilemma; situations
presenting a conflict between right and wrong or between values and
obligations, so that a choice is necessary.
example, a corporation may want to build a new factory on a previously
undeveloped and popular tourist site where there is large-scale unemployment
among the local population. Do we help build the economy of this location at
the expense of spoiling some of the naturally beautiful countryside? This is
something that we will continue to come across during this period of economic