Ethical dilemas can often arise in the world of business. When a company hires an employee who has little concern for ethics it can cause many problems. These people will put their own greed and selfishness ahead of the welfare of the company. They care for little more than their own financial gain. This type of behavior can lead to bad publicity, financial loss, and sometimes legal charges that must be answered in court. That is why Business Ethics are so important in corporate America. It is important for college business students to learn the importance of business ethics and to learn how to execute proper ethical business decisions.
What exactly is business ethics? Business ethics cover such a broad spectrum it is hard to give it one concrete definition. According to Vicent Ruggiero, ethics can be defined as the choices people make regarding right and wrong. (Ruggiero, 2008) Let’s also take a moment to look at what does not define ethics. Ethics is not a religion. Though many people are religious ethics apply to everyone. Ethics is also not the law. Although the law is created as a reflection of our ethical standards the law can deviate away from ethics. (Pitts, 2003) An example of this is the once legal rights Americans had to “own” African Americans as their servants.
Using this information we have learned about ethics we are going to discuss what the definition of “business ethics” is. Business ethics can be defined as the right or wrong choices a business makes. Further defined you would say the code of ethics a business follows when making business decisions. Society has set a bar on what is considered to be minimal ethical expectations. Some very basic ethics a business is expected to follow include being honest, obeying the law, and not directly infringing on the rights that our society holds as inalienable human rights. However, there are many more ethical decisions a business can be faced with. Some of these decisions include compensation of employees, job security for employees, hiring practices, waste management issues, pollution, and conflicts of interest.
When thinking about business ethics a business often considers three important factors.
1. Avoid breaking any criminal laws
2. Avoid actions that can result in a civil lawsuit
3. Avoid actions that can tarnish the company’s reputation
Businesses are concerned with these particular factors because they can lead to a tarnished image and loss of money to the company. Many companies will often hire corporate attorneys and public relations experts to insure that their employees do not do anything that would put the company at risk. However this could potentially cost the business thousands of dollars in unnecessary fees. (Business Ethics, n.d.) Employees should be trained on how to properly handle business decisions or conflicts in an ethical manner.
There are five approaches a business can consider when determining proper business ethics.
1.The Utilitarian Approach- This particular approach deals with consequences. It tries to increase the good done to decrease the harm done. This would result in business decisions that does the greatest good and does the least harm for all involved.
2.The Rights Approach-This approach protects and respects the moral rights of those who are affected.
3.The Fairness Or Justice Approach-This approach says that all should be treated ethically equal. If two individuals are not treated equally it should be for a reason that is defensible. For example, if one person works harder than another than the harder worker will receive more pay.
4.The Common Good Approach- This approach calls for attention to the common welfare of everyone. This is why we need laws, police, fireman, paramedics, military and other service personnel. These men and women are helping to oversee the common welfare of all.
5.The Virtue Approach-This approach exams the fact that ethics should be consistent with certain ideal virtues. Before making an ethical decision one may ask themselves, “What kind of person will I become if I do this?” or “Is this action consistent with my acting at my best?”
These approach’s work together to help determine what we consider proper ethics in the business world today. They help us determine what behaviors are acceptable and what behaviors are not acceptable. These approaches do leave some problems to be solved however. First, people will never agree on what is the common good. Second, the different approach’s still do not answer the question on “what is ethical?” However, when using these approach’s they will help you determine what is ethical in a particular situation. Also, the different approaches will give you the same answer most of the time.
So, if a corporate company is faced with a problem how can they come to an ethical decision? Having an ethical decision making process is crucial to a successful company.
There is a particular framework a business should use when making an ethical decision. First, they should have the ability to recognize an ethical issue. You should ask yourself does this situation have the ability to damage someone or a group of people? Am I choosing between a good and bad decision? Maybe I am even choosing between two good decisions or two bad decisions. Have I carefully identified and examined all of my options? You should make sure you are familiar with all the facts before making your decision. Do you know all there is to know about the situation or could you still learn more? If you have enough information you should evaluate your different alternatives using the 5 approaches to ethics we discussed before.Which option will produce the most good and do the least harm? (The Utilitarian Approach) Which option best respects the rights of all who have a stake? (The Rights Approach) Which options treats people equally? (The Justice Approach) Which option best serves the community as a whole, not just some members? (The Common Good Approach) Which option leads me to act as the sort of person I want to be? (The Virtue Approach) Considering all these options, you should choose a decision that best approaches the situation. When making your decision think to yourself, “If I discussed this decision with someone else what would they say?” After you make your decision make sure that you learn from it and apply it to any future decisions to you may be faced with in an ethical situation. (A Framework For Thinking Ethically, 2009)
Businesses will often have a “code of ethics” in place. When employees interact with clients, other employees, or new employers, a business must guard against any perceivable damage an employee could cause. For any poor decisions that an employee makes, it is their employer that will face the ultimate consequences. A code of ethics is simply a compilation of the rules and regulations that help with proper ethical conduct in a business setting. It will also often outline the consequences faced if an employee chooses to go against guidelines in code of ethics. A code of ethics is just a basic skeletal outline to act as a guide to employees on proper ethical behavior in the work place. It does not fully address every ethical decision that one may face when facing ethical business decisions. That is why it is so important for employees to make ethical decisions when faced with a variety of conflicts. Let’s take an example of an ethical dilemma that a business may possibly face. This was an actual problem that occurred in 2006. If a business student were to be faced with this same problem ten years from now how would he approach this situation?
In Salinas Valley California business owner Sam Greene operated a crop business. His company, Greene Gardens, produced broccoli, cauliflower, Brussels sprouts, cabbage, lettuce, and spinach on several ranches. He was a contract grower for a large processor, GRT Salads, which harvested about 80% of the product grown on his ranches and marketed the product under many labels. He sold the remainder of his produce to a smaller processor, Tossed Fresh, under a similar arrangement.Sam Greene was shocked when he got on his computer one day to find that the Food and Drug Administration had issued a warning. “Do not eat fresh bagged spinach.” It appeared that a recent outbreak of Ecoli was connected to fresh bagged spinach. So far the outbreak had claimed one life and left 49 others ill. (Agribusiness Management Review, 2009) So how should Sam Greene respond to these reports? When making this decision Sam may use the 5 approach’s that we mentioned earlier: He makes the decision to recall all spinach products even though there is not yet any indications that the contaminated spinach came from one of his locations. Outlined below is what helped Sam determine his decision.
The Utilitarian Approach- By recalling the Spinach Sam is attempting to
Decrease the harm done.The Rights Approach- Sam realizes that his customers have the moral right to not get sick from his product.
The Fairness Or Justice Approach- Sam knows that his customers have the right to be treated ethically. Common Good Approach- Sam knows that recalling the spinach is for the common welfare of all. The Virtue Approach- Sam realizes he is making the most ethical sound decision by choosing to recall the Spinach.
The foundation for developing proper business ethics can begin as early as grade school. There are five very basic things that can be learned in school and later carried over into the business world.
1. Attendance- It is important that an employee always shows up for their scheduled workday. This ensures that all business will be carried out smoothly. Your work load should never be dumped off on another employee. You begin learning the importance of attendance while in school. If you are not in class you fall behind and cannot learn. Just like in the workplace there are consequences in school for poor attendance.
2. Communication- It is important that the lines of communication are always open in both the workplace and school. Without communication conflicts cannot be properly resolved. In school there will often be classes that help teach proper communication skills to the younger generation.
3. Deadlines- From the time we are in grade school we learn that there are strict deadlines for our homework to be completed. At some point we have all tried the dog ate my homework excuse but it never worked. Learning deadlines while in school helps prepare you for the corporate world later in life where there are no acceptable excuses for being late.
4. Time Management- Everyday school students juggle various classes and school activities. This helps learn time management and getting projects done despite having to juggle several things at once. It will help one learn how to get the job done even though sometimes you may be under a great deal of pressure.
5. Problem Solving- Way beyond the world of high school algebra, there are many opportunities for a student to work on their problem solving skills. Every homework assignment gives a student to hone their problem skills and come up with what they consider the best solution. This will prepare them for the real world of problem solving whether it is regarding ethical issues or something else.
The first day a student packs a briefcase and head off to a professional job interview may seem far away to them, but the time to build strong skills and valuable habits is developed from the time they enter grade school. School is full of opportunities to develop the qualities most important to employers.
Each day we are confronted with choices that we must make. Most of the time the choice comes down to whether it will further of hurt our career. Many ask, “Will I get caught” or “what’s the worst that could happen if I am”? The truth is that many of us do not even consider the consequences of our actions when making the choice. Making ethical decisions can be difficult if you have been given bad examples, but listening to your conscience, will help you make the right choices when faced with ethical decisions. Remember that your bad decisions can lead to bad publicity, financial loss, and sometimes legal charges to your employer. Take the time to look at every conflict before you make a decision? Does this have a potential to hurt me or others? Use that as basic criteria for your decision and take the time to make an ethical decision that will reflect well on both you and your company.
A Framework For Thinking Ethically. (May, 2009)
Baker G & Hanson K. (2009) International Food and Agribusiness Management Review.
Fieser. J.(n.d.) Business Ethics.
Pitts, S., & Kamery, R. (2003) The role of business ethics: incorporating values and ethics into business decisions.
Ruggiero, V. (2008). Thinking Critically About Ethical Issues. New York City: McGraw-Hill