Week 2 - Synopsis - Summary Business: Its Legal, Ethical, and Global Environment PDF

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Week 2 - Synopsis Ethics

Ethical beliefs shape the way we live – what we do, what we make and the world we create through our choices. Ethical questions explore what Aristotle called 'a life welllived'. Ethical behaviour cannot be dictated merely through the creation of laws and legal infrastructure. It is much beyond that and lies in the common morality of being. It’s a crucial part day to day lives. How people, groups organizations behave and their how their actions influence the environment around them. Business Ethics Ethics apply to all different aspects of life and society. Individuals have certain ethical values and standards. People behavior wise differ from one another. However ethics also applies to institutions like hospitals,schools,organizations etc. Any form of business applies and follows a certain ethical standard of behavior. This is basically dictates the way a business wants to function how they treat their employees amongst other things. Ethical Standards There are different standards in which ethical behavior can be described. Following are few of the ways we can understand why and when certain kinds of behavior is undertaken. •

Normative Standards In normative standards normative being the operative word. It’s the phenomenon occurring in human societies where actions are regarded as either good or bad, desirable or permissible based on the values of the society making this the norm. This usually becomes the standard for ethical behaviour and it evolves over time depending on the norms of the society. •

Natural Law Standards Natural Law is a term coined to explain the reasoning that human behaviour is derived from and a direct or indirect effect of nature. The reason for this is our environment created the infrastructure that we reside in. Hence we act and react to its various components acts of nature and its logical reasoning. Nature governs everything being the pragmatic idea here. We do possess some of the same qualities that animals do and behaviour wise also mimic some of their qualities. •

Moral Relativism Standards Moral relativism is the concept that there is no set rules of moral behaviour in the universe. The morality of a particular incident or behaviour is solely governed by its relativity to other behaviour that may be governed by morals that a different from the first set of morals. It also brings into the discussion the idea that morality depends on one’s perspective and standpoint of viewing the world, environment, society and situation at hand.

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Religion and Ethical Standards Religion governs pretty much our entire world and humankind. Even if a person is an atheist it’s the need to not believe in something that doesn’t have a physical entity that drives the beliefs. Religion is the basis of so many good and bad occurrences in the history of mankind, that we have logical reasoning proving the fact that religion is a major influence on human behaviour. Ethical values that are specific to a religious belief are hence governed by religious standards. Many philosophers over the years have debated whether morality lies in being human and living the life that satisfies oneself or living a life that requires one to be more traditional in conduct and behaviour. The categories of ethical dilemmas in Business are: • Taking things that don’t belong to you • Saying things you know are not true • Giving or allowing false impressions • Buying influence or engaging in conflict of interest • Hiding or divulging information • Taking unfair advantage • Committing acts of personal decadence • Perpetrating interpersonal abuse • Permitting organizational abuse • Violating rules • Condoning unethical actions • Balancing ethical dilemmas How do employees resolve ethical dilemmas? • Blanchard and Peale - suggests that grey areas for any specific situation can eliminated by taking time to reach a conclusion or decision. • Front-page-of-the-newspaper test - it a test that basically questions or atleast raises the question that; what one may consider through their own viewpoint as ethical or justified in a closed room with no one judging or watching your every action. Whether the same behaviour or action will be commited by the said person in the public eye. • • •

Wall Street Journal and stakeholders Laura Nash and perspective Categorical imperative

Failure to achieve good ethical decisions We as humans are easily influenced, we believe this, trust things and people and buy into

theories, while this may be the reason we have come such a long way in the field of technology , science, research medicine etc., however our moral values are shifting, we have a higher sense of freedom but a lower sense of responsibility and through the following ways we convince ourselves to fall prey to unethical behaviour. Though ethical behaviour is different to different people from different religions cultures geographical locations, however there still some basic ethics and moral values that humankind all across the globe shares. These following statements help us believe we are alight and we can convince ourselves to do what we originallly mightve found unethical. • • • • • • • • •

“Everybody else does it.” “If we don’t do it, someone else will.” “That’s the way it has always been done.” “We’ll wait until the lawyers tell us it’s wrong.” “It doesn’t really hurt anyone.” “The system is unfair.” “I was just following orders.” “You think this is bad, you should have seen . . . ” “It’s a gray area.”

Buisnessess excercise Social Responsibility using the following • Positive law—codified law • Inherence—serves shareholders’ interests • Enlightened self-interest—serves shareholders’ interests by serving larger society • Invisible hand—serves larger society by serving shareholders’ interests • Social responsibility—serves largest society best by serving larger society Why is business ethics important? Business ethics is extremely important for the following reasons as the ethical value of an organization dictates its future success, the kind of people that will associate themselves with the organization. The leadership of any company are the torch bearers of good ethical values and the employess are a direct face of the organization. Following are the four major pillars: • Profit • Leadership • Reputation • Strategy

How does a business create an ethical atmosphere?

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Tone at the top Dodd-Frank and corporate sentencing guidelines Code of ethics Reporting hotlines Ethical posture and developing an ethical stance

What are the ethical issues in international business? • Corruption issues • Economic systems and ethics

References: 1. Ref: Buisiness Its Legal, Ethical, and Global Environment; Edition 11 pg 24-72...