Unit 1 - Understanding Ethics (23) Flashcards
Business Ethics reflects
The philosophy of the business, of which one objective is to determine the fundamental
purpose of the business.
Ethics are the
rules or standards that govern our decisions on a daily basis.
Many equate ‘ethics’ with
conscience or a simplistic sense of “right” or “wrong”. Others would say that ethics is an internal code that governs an individual’s conduct, ingrained into each person by family, faith, tradition, community, laws, and personal feelings.
It is important to note that “law” and “ethics”
are not synonymous, nor are the “legal” and “ethical” courses of action in a given situation necessarily the same. Statutes and regulations passed by the legislative bodies and administrative boards set forth the “law”.
Ethical issues in business include the
the rights and duties between a business and its employees, suppliers, customers and neighbours, its fiduciary responsibility to its owners. Issues concerning relations between different businesses include hostile takeovers and industrial espionage.
Related ethical issues include
- corporate governance;
- corporate social entrepreneurship;
- political contributions;
- legal issues such as the ethical debate over introducing a crime of corporate manslaughter; and
- marketing of corporations’ ethics policies.
According to IBE the three major areas of public concern
regarding business ethics in Britain are executive pay, corporate tax avoidance and bribery and corruption.
Ethical issues are closely tied to
important matters of human behaviour and morals, common law, public policy, religious beliefs.
You might encounter ethical issues at
home (the inner circle), extended family and friends (the outer circle), in the community in which you live (the second outer circle), work ethics and ethics in the business world.
Ethics are the
rules or standards that direct our decisions on a daily basis. These rules or standards are ingrained into each person in our personal development by parents and family (the inner circle), traditions, religious leanings, the surrounding community, common laws (the outer circles), and most of all our personal feelings.
Organisations are run by
human beings. So, this “ethics thing” is basically a human phenomenon. The human element has to be factored into every single ethical situation.
Ethics has to be differentiated from
morals or moral values which direct our peculiar behavioural patterns. Ethics, then, is the way in which our behaviour is managed mentally and emotionally.
Moral issues encountered at home (the inner circle)
Children are subjected to certain rules laid down by their parents – rules directing their generally accepted behaviour and ranging from “table manners”, politeness, punctuality, honesty, religious beliefs, the use of dangerous substances and a host of other norms and moral values.
Ethical issues encountered in outer circle of
acquaintances, extended family and friends and in the community in which we live.
Ethical issues differ somewhat from
moral issues that are entrenched at home by our inner circle. Ethics controls the behaviour of anybody in the outside world - people have to ponder over the moral issues that were ingrained by their parents and siblings. E.g. School children have to abide by the different codes of conduct laid down by each school and the education authorities and governing bodies
Work ethics. In South Africa, specific legislation is
enforced to ensure that labour practice is fair. Guidelines for employers and employees are outlined in the “Basic Conditions of Employment Act”.
There is a section of the Act that regulates:
- Working hours
- Employers with five or more workers
- Normal time and overtime
- Sunday work
- Night work
- Public holidays
- Compressed workweek
- Averaging out working hours
- Meal intervals
- Daily and weekly rest periods
- Leave types and accumulation of leave
- Recording and validating employee records
Business management and ethics. The elements of management are
are planning, organising, commanding (directing), co-ordinating and controlling (POCCC). Every individual, from the CEO to the cleaner, plays a leadership role in an organisation. The CEO as the leader together with all functionaries then dictates the code of ethics in an organisation.
While negotiating the code of ethics, the
culture of the organisation has to be considered. Usually the culture would be built around responsible conduct and a commitment to the highest standards of ethics. Most cultures are built on strong organisational values that should focus on protecting a business’s vision and mission statement.
Business ethics are based on
- Generally accepted behaviour and organisational values.
- Holistically direct the vision and hence the mission of any organisation, be it a corporation, a sole
proprietorship, an SMME, an educational institution, an online college, a business in the informal sector, etc. - Help develop a common set of values and morals for management and employees.
Business ethical issues are an inevitable
- are an inevitable element of business decision making and are deeply intertwined with managerial practice and economic activity generally.
- involve the manner in which a business manages and relates with its internal environment, that is, its functional managers and employees.
- involve the manner in which a business interacts with the external environment, that is, debtors, creditors, other suppliers, banks and statutory bodies.
- refer to the question of how managers differentiate between right from wrong in conducting their business.
- are concerned with identifying and understanding the ethical issues that arise in business, and with developing the knowledge and skills needed by a practicing manager to address these issues and to make sound business decisions – that is, decisions that are sound from both an ethical and a business perspective.
- are important for managers because ethical issues are involved in many business decisions upon which the success of individual managers, business organisations, and, indeed, the whole economic system depends.
- together with both economics and the law, are important guides for business decision making, but they are not complete.
- concern misconduct in organisations and also the result in flaws in individual and also organisational decision making that can be corrected only by changes in decision-making processes
- involve practicing managers who are urged to also address the larger challenge of preventing misconduct within organisations
Code of ethics
Corporations and professional organisations, particularly licensing boards, generally will have a written “code of ethics” that governs standards of professional conduct expected of all in the field. A code of ethics or a code of conduct is a set of rules stating precisely what is expected of the employees by the employer. In the code of conduct, the employees are guided on how the firm will implement ethical behaviour towards them and other stakeholders
The code of ethics should address the following issues
- Responsibility to the owners
- Relationship with customers
- Relationship with suppliers
- Relationship with the financial environment
- Relationship with the statutory bodies
- Responsibility to the community at large
- What is expected of all staff with regards the use and protection of the firm’s financial and other resources
- The need for the training of staff
- The need for the extra-mural development of staff and team-building
- The manner in which competitors are engaged.
