Aspects of Business Ethics

Introduction

This paper concentrates on analyzing the aspects of business ethics; in order to do so, it is vital to understand the key issues and concepts of moral reasoning and ethics in business, and to focus on leadership and formulation of a practical framework for ethical decision-making. Furthermore, it considers the moral viewpoints on social ethics and its implications in a contemporary life by looking into religions’ viewpoints in ethics; moreover, it assesses how to develop ethical practices by placing attention on issues of economic justice (for example, poverty and wealth), and war and peace (for example, violence and nonviolence).

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The paper assesses how, and to what extent, the business people are ethical in their everyday practices in contemporary life (especially in case of fellow workers, resources, and recruitment); additionally, it considers the issues of actualization, and offers appropriate recommendations, followed by a credible conclusion.

Key issues and concepts of moral reasoning and ethics in business

At this initial stage of the paper, it is prudent to first consider and understand the key issues and concepts of moral reasoning. According to Paxton and Greene (2010), moral reasoning is mainly a set of judgments regarding right or wrong; moreover, it can be described as individuals’ degree of moral reasoning from the reasoning applied for supporting their place while confronting some moral quandary.

Nevertheless, Paxton & Greene (2010) and Cosmides & Tooby (2004) further addressed that the creation of moral reasoning is often connected to person’s maturity. Famous authors of this philosophy, such as, Lawrence Kohlberg, Jonathan Haidt, Elliot Turiel, and Jean Piaget, and many others pointed out moral reasoning as a procedure through which a person seeks to resolve disparity amid right and wrong through the application of logic. In addition, Paxton & Greene (2010) and Cosmides & Tooby (2004) expressed that moral reasoning is vital in everyday practices so that inhabitants perform just tasks.

According to Cosmides and Tooby (2004) and Paxton and Greene (2010), moral activities consist of four devices; namely, ethical judgment (capability of finding accurate rationale regarding what should be done), ethical motivation (personal-obligation towards the ethical-action), ethical sensitivity (outlook towards ethical quandary, assessment of the influence of an act), and ethical character (brave perseverance, despite exhaustion to identify simple solution).

Crain (1985) has pointed out that psychologist Lawrence Kohlberg has played major role in defining ‘moral-reasoning’ through formulation of moral-development concept, and this concept is extensively established because it gives pragmatic proof regarding impact of an individual’s decision-making over her moral conduct; Kohlberg noted that individuals undergo six-staged moral-development throughout infancy to old age, as outline in the table below:

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I) Compliance along with chastisement Here, immature kids reject some conducts due to apprehension of chastisement rather than moral obligation
II) Individuality along with exchange Individuals undertake ethical assessments derived from their own needs
III) Superior interpersonal-relations Here individuals comply with just practices so that others consider them as good human
IV) Sustaining the societal order It concentrates on social perspectives, complying with regulations and conventions
V) Societal bond as well as personal rights Individuals believe that others must reconcile the conflicting ethical thoughts and follow socially settled regulations
VI) Universal values In this level, individuals build up unique and universal ethical values, and believe those to be the correct thoughts, notwithstanding the dictations of the socially settled policies

Table 1: Lawrence Kohlberg’s six-staged moral development concept.

Crain (1985) noted that as a psychologist, Jean Piaget researched through numerous features of moral reasoning and the conclusions encompass two phases; a child below eleven years feel regarding ethical problems in one approach, whilst an elder child judge those in another way; an immature child observes convention as permanent. According to Crain (1985), Jean Piaget found that elder children possess rather pragmatic observations in comparison to infants, and they appreciate that the conventions are allowable towards modification if adults consent to the amendment helpfully.

According to Paxton and Greene (2010), Jonathan Haidt described moral reasoning as a prudent psychological action, which comprise of converting prearranged idea regarding public to arrive at an ethical decision; certainly individuals must make factual deductions for achieving an ethical conclusion; these deductions are illustrations of reasoning, but the idea whether it is moral reasoning seems debatable in ethical psychology.

At this level, it is important to focus on the key issues and concepts of ethics in business; however, it is necessary to appreciate the fact that there are strong relations of business ethics with moral reasoning, as the theory and conceptual framework of moral reasoning construct the underpinning pillars of ethical business practices in the corporate world. Painter-Morland and Bos (2011) noted that the issues and concepts of fundamental business ethics consist of morals of sincerity, reliability, and fair dealing; however, precise practices would vary in diverse nations and businesses; conversely, according to Cosmides and Tooby (2004), moral reasoning must operate through decent-marketing, logical pricing, reliable quality, and sincere observance of promises given in course of trade.

Johnson & Abramov (2004) and Dunstan (2007) noted that honesty protects an extensive variety of morals, and comprises concerns like communal and ecological accountability; on the other hand, Fallon (2010) and Holme (2008) considered justness as an extremely indispensable corporate ethic, which would involve equal treatment towards every stakeholder in the business, irrespective of their racial backgrounds as a whole. It is important to note that the pattern, quality, and extent of the personal moral reasoning of the individual business leaders is one of the most significant factors in determining the level to which different businesses can perform in ensuring ethical practices within the corporations.

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Macfarlane (1995) and Sintonen and Takala (2002) smartly noted that anyone could assess business ethics in terms of justness by studying the trading of the company as a focused onlooker; Roper (2005) states that moral trades are advantageous and helpful for all businesses, and the idea of moral trading conveys that income should not be earned at cost of dishonesty. Roper (2005) stated that honesty in trade involves the communal portion of being thoughtful and just towards people whilst simultaneously recognizing revenue; on the other hand, integrity requires maintaining pledges and following those, as businesses must honor conventionality and pledges at all times, for example, when boss assures worker an increase in compensation, or supplier assures to give finest stocks.

Holme (2008) noted that it is important for a company to ensure reliability and integrity at all of its business segments, starting from patron management to enlisting or sacking human resources; moreover, it is important to remember that integrity is the key notion of corporate ethics. Sintonen and Takala (2002) suggested that sincerity must be present at all spheres of the company’s operations; in order to ensure this, companies must offer finest possible goods at affordable costs for poor income earners.

Fallon (2010) pointed out that the business leaders who possess strong moral reasoning capacities generate income by means of moral trading policies instead of trying to obtain benefit from others by deceitful charging; moreover, Painter-Morland and Bos (2011) stated that individual ethics, in most cases, acts as groundwork for administrating a fair business. Dunstan (2007), on the other hand, pointed out that fundamental corporate ethics perception must stream down from the directors, employers, and administration of a corporation to all employees; according to Johnson and Abramov (2004), leadership ethics inspires consumer relationship and how good the ideals are imposed among the workforce as a whole.

Leadership and formulation of practical framework for ethical decision-making

For today’s business leaders, it is essential to apply their respective moral reasoning and lead the company ethically by means of valuing and encouraging ethical decision-making. As a result, it is vital for the business leaders to formulate a realistic framework for ethical decision-making, so that the company can comply with the international laws and norms as well as ensuring fairness for employees, collaborators, customers, and so on.

Liu, Lam, and Loi (2012) argued that ethical leadership necessitates an obvious and reasoned moral framework; the leader must portray this framework while generating decisions or undertaking actions; however, such framework will not necessarily come into contemplation at once; rather, it would be engendered gradually by gathering knowledge, understanding surroundings, and observing the ethical leadership styles of ideal leaders.

According to Flanagan, Little, and Watts (2005), for many individuals, moral principles crop up conflictingly with the events or situations that they have witnessed, while, for others, moral principles get motivated through social background, sacred education, or even scholarly wisdom on fields of values, or writing; however, most individuals develop ethical framework by amalgamation of numerous of these influences.

Messick and Bazerman (2001) noted that moral framework is essential since it gives instruction or guiding principle while going through ethical preferences; however, the substance, definite principles, and extents could differ from individual to individual and also from circumstance to circumstance; under all conditions, it is necessary to keep in mind that ethical-framework would give leaders a strong ethical foundation. The table below outlines a brief framework of ethical decision-making for organizational leaders in contemporary corporate world:

Practical framework for leaders for ethical decision-making
Incorporating uniformity of ethics within organizational Leaders will engage all their workers and other subordinate staff in ethical practices and will encourage them to apply their ethical reasoning in every aspects of their daily activities at workplace; moreover, leaders will keep in check that all of the values are suiting each other, instead of being conflicting
Focusing on proactive ethical practices The leaders will be focusing on highly proactive ethical practices in organizations through apt application of moral reasoning theories of the renowned psychologists; most importantly, the ethical framework must tell the stakeholders how to work smartly by upholding personal ethics
Ethical framework must be in harmony Painter-Morland and Bos (2011) pointed out that leader’s ethical framework must be in accord with the ethical framework, ideal, and operation of the organization; a leader who thinks he should take decisions on behalf of others cannot morally direct an organization that has a culture of joint decision-making and anti-racial approach
Considering the organization’s ethical decision-making as the top priority Most of the researchers convey the idea that the proposition for ethical leader should include an initiative that they consider the organization’s decision-making as the top priority; in other words, ethical leader will not compromise the organizational philosophical stance in order to attain more profits by trading in a way that is unfamiliar for the people within the firm
Organize routine discussions on issues of ethics every month The leaders should organize routine discussions on issues of ethics every month because the ethical framework need to be continually kept in check; in addition, the leaders must not only focus on overall moral reasoning of the organization, but rather, the condition of moral reasoning in individual level in order to ensure that everything is working properly
Organize ethics training programs to aware and educate all members, especially the newly recruited ones In order to ensure that the formulated framework is maintained from all spheres of the business in a pragmatic way, the leaders will organize ethics training programs, seminars, and discussions to aware and educate all members, especially the newly recruited ones; in addition, especial focus should be given in motivating members towards the goodness of moral conduct
Establishing a strict scheme to oversee that the subordinates have put into practice the moral behaviors It is vital for the leaders to establish a strict scheme to oversee that the subordinates have put into practice the moral behaviors that were taught in the seminars, discussions, and training programs; in order to do this, the leaders will initiate strong monitoring system within the organization

Table 2: Formulated framework for leaders for ethical decision-making.

The figure below shows how the ethical framework for leaders will affect the organization in practice; it illustrates that the products of individual and group ethics will fuel up organizational values, strategy, mission, capacity, and outcomes, and proper implementation, monitoring, and deliberation will teach the leaders to be responsible reasonable, intelligent, and attentive and bring about the best ethical leadership:

How the ethical framework for leaders will affect the organization.
Figure 1: How the ethical framework for leaders will affect the organization.

Moral viewpoints on social ethics and its implications in a contemporary life

The contemporary social structures are getting complex day by day; according to numerous social scientists, the social values and the conventional social structures and communal bonds are gradually decaying. At the same time, antisocial activities, moral breakdown, gay marriage, drug abuse, and heinous crimes, such as murder, homicide, torture, rape, and abduction are increasing because of poor moral reasoning and poor ideals. Jochemsen (1999) noted that the implications of social ethics, which have been established over a long period, particularly by means of motivating people towards religion’s moral viewpoints, are getting ineffective day by day in a contemporary life.

According to Jochemsen (1999), religions’ moral viewpoints were created mostly within a perspective, which was reasonably dissimilar from the contemporary planet; therefore, ethical troubles in abortion, euthanasia, genetic investigation, human-replication, embryonic cell transplant, and so on, which are assisting human wishes to take convoluted varieties, are not dealt with in religious-principles that aided historic societies, and now, becoming gradually inept.

Moral stances vary widely from human to human, and as a result, even atheist people can possess high ideals and great moral reasoning capacities; therefore, in many cases, atheists are also called humanists (Jochemsen, 1999). However, in order to restore the implications of social ethics in contemporary life, returning to religiously motivated moral viewpoints can once again prove to be helpful.

Jochemsen (1999) noted that to uphold social ethics and its implications in contemporary life, it is vital to consider the teaching of Jesus Christ; He wants people to love god, admire every individual, remain deferential, remain truthful, lead an ethical life, stay kind, and perform religion rather than merely sermonizing it; moreover, people should forgo animosity and avoid being hypocrites.

For developing moral reasoning among human being, Al Quran dictates Muslims to be devoted to Allah, to remain sympathetic and modest towards parents, to stay way from mercy killings, to avoid adultery, to avoid murdering, to think for orphans, to keep swears, to maintain integrity, and to avoid being egotistical; Islam dictates people to establish justness and respect each other.

Promta (2009), Jochemsen (1999), Sintonen & Takala (2002) and Painter-Morland & Bos (2011) stated that the objective of Buddhism is to surmount of human-miseries; Lord Buddha believed human-miseries occur for moral degeneracy of creatures, and by achievement of moral perfection or absolute internal alteration, people can defeat their own misery along with others’ miseries. Buddhists believe Buddha as obliteration of gluttony, abhorrence, and neglects, which are the roots of moral wickedness (Promta, 2009; Jochemsen, 1999, Painter-Morland & Bos, 2011; NASW, 2008; and Sintonen & Takala, 2002).

Promta (2009) added that moral evil could take different forms, specifically, the dormant, the altitude of internal turmoil, and the point of external expression; Lord Buddha stated that people could get rid of this by nurturing decent lifestyle, expanding psychological serenity, and progressing thoughtfulness; He declined exterior power like customs or scriptures as convincing basis for assembling even-tempered moral alternatives.

Developing ethical practices considering economic justice and war and peace

At this stage of the paper, it is important to focus on how it is possible to develop ethical practices by placing attention on issues of economic justice, for example, poverty and wealth; and war and peace, for example, violence and nonviolence, as well as just war and pacifism. Developing ethical practices in order to ensure economic justice and a fair balance between poverty and wealth is not a very easy task to do; with globalization, spread of market economy, and increasing MNC culture; so, wealth is now assembled in the hands of a very few numbers of people whilst the majority of world population is still starving.

NASW (2008) noted that there are great differences between the financial position of black and white families; for example, in 2004, the median-wealth of black-families were three hundred dollars whereas for white-families, it was above thirty-six thousand dollars; therefore, developing ethical practices can only help to diminish the differences if the regime performs those ethical practices. The regime can do so by, for example, developing and enforcing equal pay, fair treatment, and equal job opportunity policies.

Historically, human warfare and violence has been supervised by ethical and lawful limitations; the concept of ethics in warfare and violence originated from Greeks and Romans; however, Mapel (1992) noted that human race has been debating on the issue war and peace, violence and nonviolence for thousands of years. In addition, Mahatma Gandhi’s non-violent protests, and Martin Luther King’s peaceful civil disobedience has put a question mark on the concept of Just War (Mapel 1992). According to BBC (2013), the concept of Just War derived from the orthodox logicians of Greece and Rome (such as Plato, Cicero) and clerics of Christianity (for instance Augustine and Thomas Aquinas); it recognizes that killing someone is gravely immoral, but it can be justified for sake of the responsibility of the regimes to protect their people and guard righteousness.

Although the modern theory suggests that war is always unethical, concept of Just War states that it is ethical as it is important to use violence to prevent greater violence; however, Just War must be reasonable, and conducted in proper method (Jus in bello); even righteous reasons may depict a war unfair if it was not conducted in proper method. Mapel (1992) noted that to put simply, this theory developed a framework for ethical practices in the arena of war concepts.

Pacifism developed another set of ethical practices, focusing on the contemplation that war and violence are indefensible; so, divergences must be solved peacefully; pacifists possess such ideology because of religious reliance, confidence in life’s holiness, or principle that war is spendthrift and hopeless (Messick & Bazerman, 2001; Painter-Morland & Bos, 2011; NASW, 2008; and Sintonen & Takala, 2002). Moreover, pacifists insist to endorse impartiality and human right; in addition, they could rationally assist euthanasia or abortion (Mapel, 1992; Messick & Bazerman, 2001; and Sintonen & Takala, 2002).

Ethics of business people in their everyday practices in contemporary life

Messick and Bazerman (2001) pointed out that in everyday practices of contemporary life it is alarming to note that the people who are associated with the businesses do not always operate themselves in an ethical manner. According to the view of Sintonen and Takala (2002), in everyday business practices, a huge number of employers from the top managements of the companies practice racially motivated activities. Sintonen and Takala (2002) further addressed that these racially motivated activities are reflected through recruitment of employees, attitude towards fellow workers from ethic minorities, allocation of resources for different worker groups within the firm, unethical indulgence for privileged classes, and so on.

Painter-Morland and Bos (2011) suggested that in many circumstances, while business leaders practice racism and avoid recruiting female, black, ethnic people from diverse nationalities, or people from different religions, they fail not just to apply their ethical reasoning capacities, but also to apply a standard level of moral viewpoints based on religious pillars or fear of god. Johnson and Abramov (2004) illustrated how business ethics, mutual ideals, reliance, and social capital can lead to economic growth for the company; these authors suggested that these components are interlinked with each other and respecting business ethics could bring about ultimate success; this is shown in the figure below:

Business ethics can lead to economic growth.
Figure 2: Business ethics can lead to economic growth.

Johnson and Abramov (2004) focused on the fact that the employees or subordinate workers of the business also engage themselves in unethical practices in many ways even without any involvement of business leaders; this often includes, for example, ill behavior with customers while serving them, and charging them more money than that of the guided levels of the company. Roper (2005) stated that the subordinate workers also engage themselves in producing poor quality products while in manufacturing plant, creating chaos within the team in order to take advantage of it by working less, and even stealing raw materials or profits.

It is significant to observe that the workers can be demoralized and unwilling to afford a fair effort in the company because of unethical payment scheme; however, by means of an ethical payment scheme, it is possible to motivate them towards a moral performance as a whole; yet, the affects are showing briefly in the figure below:

Influence of ethical payment scheme.
Figure 3: Influence of ethical payment scheme.

Macfarlane (1995) suggested that in a number of ways, the suppliers of the corporation also deceive the administrative and organizational authorities of the corporation. According to the view of Holme (2008), Roper (2005), Macfarlane (1995) and Johnson & Abramov (2004), more often, by manipulating stock levels, suppliers take advantage of the concerned businesses by charging high for the raw material by stating that the supplies are low and demands are high. Liu et al. (2012) noted that in other cases, suppliers cheat with businesses by not keeping promises and providing poor quality materials than the desired levels.

According to Flanagan et al. (2005), it will only be possible for businesses to establish fair practices if the fellow workers, business leaders, suppliers, shareholders, managers, and all other stakeholders respect business ethics and develop the moral reasoning levels not just through training programs or discussions, but also by believing on fair trade from the deep of their hearts.

Actualization

As indicated by the dictionary, the term, ‘actualization’ indicates the action that assists to realize that the performed action is original and genuine; additionally, it represents the performance realistically that may motivate people for similar practice. Ivtzan (2009, p.7) pointed out that the ‘self-actualization’ is a most popular concept that originated from the approach of humanistic psychological theory introduced by Abraham Maslow during the forties, which is still valid for the motivational theories of human behavior and its adoption in the practice of business ethics in different firms.

Farrell (2010, p.3) pointed out that the concurrent practice of business ethics are much more concerned with questions of moral responsibility as well as the resolution of self-actualization linking with the personal freedom, individual rights and needs at the workplace where the postulation of order and control is essential to implementing different degree of moral decision making. Although the applied ethics imply the extensive exercise of power, but it is essential for the business owners, managers, and leaders to remove selfishness and uncontrolled greed and to care for the needs of the others in the workplace and the transformational leadership always requires an elevated degree of self-esteem and self-actualization to carry out business successfully.

Recommendations

Even though offering recommendation is much easier than actually implementing it in practice, it is highly essential to implement the pragmatic suggested solutions outlined in the table below in order to establish strong ethical practices from all spheres:

Suggested Solutions
Promote conversation on ethical concepts It is important to promote overall conversation on moral concepts as a continuing aspect of corporate tradition and teach people to make the best moral alternatives in precise circumstances
Offer democratic and liberal leadership style Through offering democratic and liberal leadership styles, the business leaders would ensure that they are acting ethically because they are allowing the views of subordinate workers and letting subordinates to speak out against any latent injustices rather than imposing their own decisions on workers like authoritarians;
Ensure justice, integrity, and admiration There should not be any space to undermine a female worker, pay less to a worker from an ethnic background, and reject the application of an applicant who belongs to a different religion
Ensure fair trade with partners, suppliers, and associates It is highly essential to ensure fair trade with partners, suppliers, associates, and other stakeholders in order to uphold business ethics in long-term and increase the goodwill of the company
Regular self-examination to reinstate morals Ensuring that they are morally proficient human beings, obtaining acquaintance regarding diverse traditions persistently, taking leadership liability sincerely, endeavoring to augment competence frequently, and continuing self-examination to affirm morality at business recurrently

Table 3: Viable recommendations.

Conclusion

At this stage of the paper, it is important to state that public morals and reasoning varies to a huge extent in this world. Therefore, in order to ensure ethical behavior in business organizations or elsewhere, it is essential to reconcile people’s moral reasoning by focusing on religious perspectives and organizing different discussion programs. In addition, establishing ethical practice as a tool to ensure balance between rich and poor in broader economic context requires smart policies from the government. Most importantly, it will not be possible to ascertain business ethics in corporations unless the business leaders change their mindset and adopt great morals and liberal ideals.

Reference List

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Farrell, L. M. (2010). The Meta-Ethics of Business in the Twenty First Century. Web.

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Sintonen, T. M. & Takala, T. (2002). Racism and ethics in the globalized business world. International Journal of Social Economics, 29(11), 849-860.

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