business ethics2 (1)

7/28/2019 Business Ethics2 (1)

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Business ethics

Managerial Ethics


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Managerial Ethics

Standards of behavior that guide

individual managers in their work. Three Basic Areas of Concern:

Managers need to approach the following froman ethical and moral perspective:

Relationships of the firm to theemployees.

The employees to the firm.

The firm to other economic agents.


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How an Organization Treats Its Employees

Important areas of managerial ethics

include:

Hiring.

Firing.

Wages.

Working conditions.

Employee privacy. Employee respect.


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How Employees Treat the Organization

Especially in regard to:Conflicts of interest.

Security.

Confidentiality.Honesty.

Most companies have policies

that guard against violation ofthese ethical issues.


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How Employees and Organization Treat Other

Economic Agents

Ethics play a part in the relationshipbetween the firm and its employees withother economic agents.

Behaviors between the organization andthese agents that may be subject to ethical

ambiguity include: Advertising

Promotions

Financial disclosures

Purchasing Shipping

Solicitation

Bargaining

Negotiation, and other businessrelationships.


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Ethics in an Organizational Context

Actions of peer managers and

top managers, as well as theorganizations culture, all

contribute to the ethical context

of the organization.

Organizational practice may

strongly influence the ethicalstandards of employees.


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Managing Ethical Behavior

Top management establishes theorganizations culture and defines

what will and will not be

acceptable behavior.

Code of ethics: a formal written

statement of the values and ethical

standards that guide a firms

actions.


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Inventory of Ethical Issues in

Business

Figure 7-2

Employee-Employer Relations

Employer-Employee Relations

Company-Customer Relations

Company-Shareholder Relations

Company-Community / Public Interest


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Values and Ethics: Doing Good and

Doing Well

Built to Last: Successful Habits of Visionary

Companiesby James Collins and Jerry Porras

Key finding: Exceptional and enduring companies

place great emphasis on a set of core values

These core values are essential and enduring tenets

defining the company, and not to be compromised

for financial gain.


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Companies cited by Collins & Porras

IBM

Johnson & Johnson

Hewlett Packard

Procter and Gamble Wal-Mart

Merck

Motorola Sony

General Electric


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Benefits of ethics for business

One of the main benefits for a business of behavingethically is that a better image is given to the world

at large, and especially to consumers, resulting in

greater profit.

It also means that expensive and potentially

embarrassing public relation disasters are avoided.

As far as employees are concerned, if the business is

seen to behave ethically, for example with regard tothe environment, it will recruit more highly qualified

employees, and this leads to better employee

motivation as the employees are proud of their jobs.


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Problems of ethics for business

Being ethical can increase costs for the business, e.g.they have to pay reasonable wages to all employees.If a business is truly putting its ethics into practice itwill have to pass on the same standards down thesupply chain and this will mean no longer doingbusiness with suppliers who are not prepared tomeet the same standards.

However, businesses are products of the society inwhich they operate, and if society does not always

have clear standards it is not always easy for abusiness to decide what to do, e.g. some people inour society are completely opposed toexperimenting on animals, but others would argue

that it is alright for a business to do so if it benefits


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Problems of ethics for business

Sometimes a business needs to consider that its roleis to make a profit, provide jobs and create wealth

for society as a whole, and it may consider that

ethics are good if they help achieve these aims, and

to be ignored if they do not.

Ultimately to really be ethical a business may have to

change its whole business practice and

organisational culture.

business ethics2 (1)

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