BUSINESS ETHICS

Ethics is the study of how our decisions affect other people. It is a study of people habits and their effect on others.

It is a set of moral values or principles used the organizations to steer the conduct of both the organization itself and its employees in all their activities whether internal or external.

Business or management ethics therefore are the standards that guide managers in line with their actions and decisions to determine whether they are good or bad or right or wrong morally. In this case they are generally accepted ways of behavior expected of managers and businesses. Businesses must balance the interest of employees against the needs of the overall business objective. In most cases managers are the ones likely to confront ethical dilemmas in the course of their duties. Some of the dilemmas or ethical problems that arise among managers include the following:-

  • Conflicts between the personnel managers desire to improve quality of employee working life versus job extension and the insistence of other managers that the division of labor is employed as extensively as possible and that salaries and condition be kept constant.
  • Senior management demanding the personnel officers to deliberately misrepresent unsound personnel policies in order to promote them to the workers.
  • Awareness that certain employees are not receiving fair rewards for their effort.
  • Having to decide whether to report to the police illegal acts of the employer or even employee.

Levels of questions addressed in ethics (Ethical Questions)

1. Societal level
At this level we ask questions about basic institutions in a society. For example, is it ethically correct to have a social system in which a group of people are systematically denied basic rights?

2. Stakeholders level
This includes the employees, customers, shareholders and others. The question is how a company or business organization should deal with these groups who are affected its decisions and how should these groups deal with the company in question.

3. The moral discourse level
This is also known as the internal policy. Questions addressed are about the nature of the relation of business organization and its employees i.e. managers and others.

4. The personal level
Questions addressed at this level are about how people should treat one another within an organization. For example, should we be honest with one another whatever the consequences.

Ethical language
This refers to ethical terminologies. They include;

1. Values- values are relatively permanent desires that seem to be good in them. For example, peace or goodwill. They are therefore answers to the why questions.

2. Rights- these are claims that entitles a person to take a particular action. They entitle room or sphere of autonomy or freedom. Rights are rarely obsolete because they are limited the rights of others.

3. Duties- duties are obligations to take specific steps, obey laws. E.g. paying taxes.

4. Moral values- these are roles for behavior that often become internalized as moral values. These roles guide management through situations where competing interest collide.

Common Morality
This is a body of roles covering ordinary ethical problems. They include the following;

1. Promise keeping.
According to this value members of society and business organizations must keep their promises if business is to be continuous. It also means telling the truth.

2. Non malevolence
This means refraining from harming others. Morality its very nature requires that we avoid violence or using force in settling dispute. For example, using the police to subdue rioting employees.

3. Mutual aid
According to this rule individuals must pursue both the individual interest and groups’ interest if this is not costly i.e. individuals should help one another if the cost of doing so is not great.

4. Respect of persons
Common morality requires us to regard other people as ends in themselves but not as mere means to our own ends hence we should regard others as people and also regard their desires as important.

5. Respect of property
It means people should get the consent of others before using their property.

The criteria of evaluating an ethical manager from an unethical manager

1. Through the managers’ utilitarian outcomes. If a managers behavior results in the greatest wound for the greater number of people. It means that ethical managers are those whose decisions yield or consider society demands. This is assessed through social responsibility.
2. If the manager’s behaviour respects the rights of the other people or parties then the manager is ethical. This includes issues such as human rights of free consent, free speech, privacy and due process. Ethical managers therefore are those whose decisions consider the stakeholders of the business organization.
3. From criteria of distributive justice, A manager who behaves ethically respects the role of justice such a manager does treat people arbitrarily but equally and fairly.
4. From the way the managers deals with internal policy. This involves the mutual obligation of managers and other workers. Ethical managers are those who treat subordinates and other managers as human beings but not in a discriminating manner. For example increasing their wages, creating better work environment.
5. From the way a manager deals with his/her personal issues. Ethical managers behave professionally in terms of the way they handle themselves and their work.

How managers can improve ethical behaviour in their organizations

  1. By establishing corporate codes of conduct. This guides new and existing members in dealing with each other and the customers.
  2. Encouraging good working relationship among the workers
  3. Encouraging good working relationship between employers and employees
  4. Ensuring that the rights of the individual in the work place are protected
  5. Ensuring that professional relate professionally to their clients
  6. Helping workers to protect and uphold the reputation of the organization
  7. Helping workers to develop proper skills and the right attitude towards their work
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