Sep 1, 2013 - Society at large is .... Big business organizations have started to .... can justify their belief that it is ethical but the annual study on global software.
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Galaxy: International Multidisciplinary Research Journal
ISSN 2278-9529
Business Ethics Neena Jindal Associate Lecturer Jaypee University of Information and Technology, Waknaghat, Solan, HP (173234) Abstract Business ethics is all about the intersection between business and ethics and is fundamental to the relationships between societies at large. Business ethics engages essential questions like, why does an organization exists in the first place? What is its raison deterring? Issues in business ethics change daily. It also encourages us to articulate and share their decision making rationales and strategies. Crisis concerning questionable ethical and illegal business practices confront organizations, societies and individuals daily. The sense of ethics allow us to gain respect and support within our communities, help provide a competitive advantage in the market place, and attract and retain individuals who not only demonstrate, but also demand high standards of business conduct. Keywords: Business ethics, organizations, society. Being ethical is not the same as doing whatever society accepts. In society, people accept standards that are, in fact, ethical. Being ethical is also not the same as following the law. Ethics is two things; ethics refers to well-founded standards of right and wrong that prescribe what human ought to do, usually in terms of rights, obligations, benefits of society, fairness, or specific virtues. Secondly, if refers to the study and development of one’s ethics standards. It is necessary to ensure that they are reasonable and well-founded. Business ethics (also known as corporate ethics) is a form of applied ethics or professional ethics that examines ethical principles and moral or ethical problems that arise in a business environment. In the concept business ethics addresses the moral features of commercial activity. In practice, however, a dizzying array of projects is pursued under its rubric and these projects vary considerably and often seen to have little in common other than the conviction, held by those who pursue them, that whatever each is pursuing is business ethics. By putting moral reflection on commerce, business ethics is probably as old as trade itself. As a rough guide the Code of Hammurabi (1700s B.C.), prescribing prices and tariffs and laying down both rules of commerce and harsh penalties for non-compliance, evidences, some of civilization’s earlier attempts to establish the moral contours of commercial activity. As a discrete, business ethics is roughly four decades old. Interest in business ethics accelerated during the 1980s and 1990s, both within major corporations and within academia. But despite the wide range of several questions pursued, the academic literature and discussion is focused more closely on the large corporation whose ownership shares are traded on public exchanges.
Vol. II Issue V
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September 2013
www.galaxyimrj.com
Galaxy: International Multidisciplinary Research Journal
ISSN 2278-9529
Meaning It has become really important to study ethics in recent times, word ethics is derived from the Greek word ethikors meaning custom or character. The definition provided by the Chamber’s Dictionary, a workable definition: “ethics is a code of behavior considered correct” (Fernando 1) The ongoing contribution to the advancement of knowledge and science makes ethics a relevant aspect of management theory. Ethics deals with right and wrong behavior, defining when our actions are right and when they are wrong. Business ethics on the other hand, is an application of general ethical ideas to business behavior. Ethical problems or issues are common throughout the world. Several national and international agencies are working to minimize such actions. Society at large is being affected by such illegal behavior by business and its employees. At certain places, business ethics proves that business has been and can be ethical and can make profits also. What is not business ethics? It is also very important to discuss what not business ethics is. From religion Almost every religion preaches moral and ethical standards, but they do not talk about all the problems we are facing in today’s scenario. Like: issues related to environment and information technology are new for the most religions. Ethics is not synonymous with law There are several cases where law deviates from what is ethical. We can found in good legal system moral and ethical standards may be incorporated. Laws can also be corrupted and be used to serve the interest of the minority group by the dictator. Ethics is different from feelings Sometimes our ethical choices are based on our internal feelings. We feel bad when we do something wrong or we indulge in wrong activity, but the criminals or the wrong doers may feel good when they do something wrong. But when someone does anything wrong again and again, and then it brings them pleasure and become habit without any bad feeling. Ethics is not a science in the strictest sense of the term To make ethical choices, we sometimes draw data from the science. But science does not tell us in certain situations what we ought to do, but ethics tells us and offers reasons how to act under such conditions. For example: - cloning is something that is scientifically or technologically possible, but may not be ethically correct. Ethics is not just a collection of values
Vol. II Issue V
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September 2013
www.galaxyimrj.com
Galaxy: International Multidisciplinary Research Journal
ISSN 2278-9529
We cannot define values because these vary from person to person and society to society. A person may not be loyal to the employer but can be loyal to his fellow colleagues or the coworkers, so we can say that ethics is not just a collection of values. Importance and need Ethical behavior is a necessary evil for trust and is all about developing trust and maintaining it so that the organizations flourish and maintain their goodwill. Ethics is not only important in business but also in all aspects of life. The business that lacks ethics is likely to fail sooner or later in the society. Business ethics helps us to judge the role of business in the contemporary society. Business ethics helps in the welfare of the society by offering a social and political platform for remedial and sometimes proactive action. Companies like Wipro, Infosys, Tata Steel, Johnson & Johnson etc. have gained the trust of the people by ethical practices. So, it is very much essential to build trust in ethics as these are closely related. Significance The fall of the Corporate America, Europe and in many emerging economies at the beginning of the new millennium was because of the top management companies who do not behaved ethically. There are only few businessmen and entrepreneurs who are the opinion that business and ethics do not go hand in hand. But the real life situation shows that the use of ethical practices in business does create high profits or returns for companies. For instance, if a company treats their employees ethically then they will automatically deal with customer and business associates ethically. On the other hand if a person behaves unethically, they will result in reduced success. Ethical or the moral behavior can neither be taught in a vacuum nor be legalized. To promote the ethical behavior, personal example should be set. It is a human belief that good behavior will find its reward on duty. Because the fact is that people would rarely accept the success of unethical force over the ethical. Ethics is the essential part of the civilized society so it is not only important in business but also in all aspects of the life. A business as well as society that lack ethical principles is bound to fail sooner or later. Why do ethics matter in business? Number of reasons can be found for being ethical in behavior. In the existing competitive world it is mandatory for an organization to be ethical in its behavior. Most of the business-people wants to be ethical while pursuing or making business deals. Values always help in better decision-making. For example: - If any corporation expects others to keep their promises on ethical bases and itself do not take stands on it, then it will be unfair. But it is really hard to make decisions which have been studied from ethical and from economic angle, but they will stand by against all the odds because, at the end good of the employee, company’s long-term interest and public interest would have been taken into account.
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www.galaxyimrj.com
Galaxy: International Multidisciplinary Research Journal
ISSN 2278-9529
Ethics is very much necessary within the organization. If any company wants to make profit and to have a good reputation, then it must act within the frame of ethics. Communication on the grounds of ethics within the organization would be a healthy sign that the company is marching towards the right path or goal. If the employees of the company are internalized properly with the ethics, then the activities that individuals or organizations carry out will have ethics in them. How Corporation observe ethics in their Business Organization? By publishing in-house codes of ethics, organizations have started to implement ethical behavior, which are to be followed strictly by all the associates. Big business organizations have started to employ the people with high standards of ethical behavior and they have also started to incorporate considerations of ethics into their performance review. They have also started to reward the ethical behavior to popularize the good ethical conduct. In the present scenario many corporations are conducting an Audit for ethics and at the same time, they are also looking forward for finding more ways to be more ethical. Efforts of changing environment on business ethics By the changing business environment companies are trying to adopt new and effective tools to communicate their ethical culture. This fast-changing external environment of business brings positive changes in the response of the individual organizations. By the drastic change that is created by information and technological, organizations cannot also resist change anymore and with these changes ethical issues have to be faced and solved to the satisfaction of all the stakeholders. Because of the shift in business growth, powers of decision making are given to the lower levels of hierarchy, which leads to decentralization and this decentralization has raised the number of ethical issues. The root cause of the unethical practices in organizations is the differences in goals of the individual and of the organization, and this have caused newer situations to emerge and challenge ethical decisions. To solve such issues the companies have to practice, ethics alone, otherwise in the long-run they won’t be able to survive in the modern and competitive world. Teaching in business ethics, OR Can business ethics be taught? Business ethics is applied ethics discipline that addresses the moral features of commercial activity. Our sense of ethics and doing what is wrong and what is right allow us to gain respect and support within our communities or society. Ethics deals with human behavior, so it can’t be taught. It depends upon the environment or the situation that how we react in which situation. Theoretically we can’t teach ethics or ethics can’t be learned by reading anything but it can be learnt by practical example or by working in an organization, where we gain practical experiences in our day to day life. On the other hand organizational ethics consists of human behavior, good or bad, right or wrong. It also consist the issue that employer and the employee came together for the completion of a specific goal or for making the profit. So, business ethics deals with moral issues also. These days’ business schools are also contributing in imparting value-based business education in order to help students of business in making ethical decisions and these students should be helped to gain clear knowledge about what is wrong and what is right.
Vol. II Issue V
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September 2013
www.galaxyimrj.com
Galaxy: International Multidisciplinary Research Journal
ISSN 2278-9529
Because the number of business schools is increasing in our country, there is a great increase in qualified and competent faculty in business ethics. So, the notion we knew earlier that business ethics can’t be taught is becoming wrong in the present scenario, because with these schools and the qualified faculty are really helping in teaching and preaching the subject of ethics who are not professional ethicists. Law and Ethics In our culturally pluralistic society several obligations are already exist in the law that is endorsed by our national social group. These are the major guidelines for honesty in safe working conditions. Several sub-groups of our society are bound by the obligations of their specific religion, as they say they would not keep any profit made or gained by the business and even these obligations are clearly not binding on those who are outside the sub-groups. Very often, it is held that business is not bound by ethics other than abiding by the law. Ethics for Friedman is nothing more than abiding by ‘customs’ and the law. Several companies have formulated certain internal policies pertaining to the ethical conduct of employees. They are generally meant to identify the company’s expectation of workers and to offer guidance on handling some of the more common ethical problems that might arise in the cause of policy business. This can lead to more ethical awareness and the avoidance of ethical error. Law versus ethics in Management A number of laws have been enacted to protect the unethical behavior towards the employees in the workplace. These laws are administered by US department of Labor. Generally, these laws reflect the ethical standards of the majority of society. Private organizations, companies and associations frequently establish their own codes of ethics; these may be formally written or understood by the employer and the employees. These codes of ethics are not forced by the government but they are enforced by the organizations internally. For example: - Nike is one of the major manufacturers of sportswear in the World. They pay $ 2.20 a day at the entry level to its employ in 1996 but it was spending around $ 20 million for the advertisement for a year. This practice of Nike is not illegal. In America it is seen as unethical. We can quote one more example here from the software protection law. This stated in the Copy Right Act, title 17 of the US code. The Act gives the owner of the copyright “the exclusive rights” to “reproduce the copyrighted work” and “to distribute copies…. of the copyrighted work” (Stapleton 4) It also states that “anyone who violates any of the exclusive rights of the copyright owner…. is an infringer of the copyright,” (Jennings 33) and sets forth several penalties for violation of a copyright. Those who purchase a license for a copy of software do not have the right to make additional copies without the permission of the copyright owner, except to: • •
Copy the software onto a single computer or Make another copy for archival purpose.
Many people can justify their belief that it is ethical but the annual study on global software piracy shows that this resulted in $ 11 billion loss of software companies.
Vol. II Issue V
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September 2013
www.galaxyimrj.com
Galaxy: International Multidisciplinary Research Journal
ISSN 2278-9529
Conclusion From above paper we come to a conclusion that it is really necessary to be ethical if one has to be successful in a competitive world. Moral and ethical values have to from within. Companies and organizations are adapting new innovative tools to communicate their ethical culture as a response to the changing business environment. These changes are bringing new issues and problems for them. Inspire of all problems an organizations faces it also derives many benefits by imbedding in its system a code of ethics. Ethics also involves systemizing and also recommends the concept of right and wrong behavior. It is also very important to clarify what is not ethics. Ethics is different from religion. Ethics is also not synonymous with law. It is different from feelings and especially ethics is not a science. We can conclude with the writing of ‘Jones and Parker’, “Most of what we read under the name business ethics is either sentimental common sense, or a set of excuses for being unpleasant” (Pettey 236) Works Cited: Fernando, A. C. Business Ethics and Corporate Governance. India: Dorling Kindersley, 2010. Print. Jennings, Marianne M. Business: Its Legal, Ethical and Global Environment. Ohio: Thomson, 2006. Print. Pettey, Jenice Gow. Non Profit Fundraising Strategy: A Guide to Ethical Decision Making and Regulation for Non Profit Organizations. New Jersey: John Wiley &Sons, 2008. Print. Stapleton, Laura Lee. E Copyright Law Handbook. New York: Aspen Publishers, 2002. Print.
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