Ethics

Peter F. Drucker has said that there is only one ethics, one set of rules of morality, one code of individual behavior whose rules are applied to everyone alike. Swami Viveknanda suggests ethics as the degree of faith in oneself. When an individual has attained a superior strength due to attainment of freedom and renunciation, ethics are also attained alongside.

The word ethics is coined from the Latin word Ethics and the Greek word Ethikos which pertains to character. Hence, ethics is said to be the science of conduct and deals with the moral standards prevalent in the society. It is a set of morals implying what is right and what is wrong, true or false, justice or injustice or more simply, ethical or unethical.

Business ethics is the code of morals or concepts that govern the behavior of a business person and his relationships with the suppliers, the government, the publicsociety, the customers, and competitors.
As can be seen, it is not just restricted to the world at large but also face to face dealings with just a single customer. Ethics arise when the methods involved in making the bottom line profits by the business take the form of misinformation and deceptive practices towards the customers and even at times, the employees. Business ethics are therefore there to eliminate exploitation and encourage respectable behavior that just not only earns the businesses profits, but also get them brand loyalty through flawless reputation and customer equity.

The importance of business ethics in todays competitive economy cannot be denied (Smith, 2009). When moral standards are adhered to, the whole society experiences positive influences because ethical behavior is then promoted in all spheres of life.

In an organization, managers face constant dilemmas related to business ethics and their attitudes related to behaviors. Many are of the opinion that business and ethics dont go hand in hand and adherence to ethical practices, leads to reaping lesser profits and opportunities offered by the business environments and circumstances. But many examples have shown that business ethics do create high returns for businesses and the reputation and its share price also increases due to practicing of corporate social responsibility (CSR) (Smith, 2009). Fulfilling ethical values conscientiously, taking care of customers, society and in overall, of all stakeholders interests and benefits over businesss own objectives and goals comes under Corporate Social Responsibility.

It is easy to outline how a business can practice corporate social responsibility, no doubt but the fact remains that controversy and dilemmas arise. Ethical issues emerge when people fail to place professional needs above their own personal needs. Hence, ethical misdoings happen when there is a strong conflict between personal aspirations and what is officially expected out of an individual.Therefore, an ethical decision is one in which others are not harmed and is almost a selfless act.

There are different ethical theories that guide the different business practices of todays modern entrepreneurs. Consequentialist theories are based on the assumptions that the moral rightness of an action is determined solely by its results. If the consequences are good, then the action is right. If they are bad, then the actions are wrong. Consequentialists determine what is right by weighing the ratio of good to bad that an action is likely to produce(Barry, 2000).

By contrast, nonconsequentialist theories or deonotological theories imply that right and wrong actions are predetermined more likely by their consequences what is achieved by those actions.

Nonconsequentialist in comparison not just deny the consequences of an action, but they believe in the existence of other factors necessary for the moral analysis of an action.

One Consequential theory is Egoism in which self-interest is the guiding principle. From a business perspective, this theory is not at all moral because it implies that anyone who offers business advice or does marketing or selling must represent hisher own interest. Hence, decisions are not based to achieve the organizationalindustrial goals or success but to serve ones own needs and individual interest.

Egoism is applicable for a business whose objective revolves around only earning of profits and getting financial returns. In todays global economy, a business which practices Egoism will not survive the harsh reality of evolving business trends and strategies.

Another Consequential theory, identified by Barry and Shaw is Utilitarianism theory. This theory is the contrast of the Egoism theory because it takes into its effect the whole organization and how decisions affect it all. Both Egoism and Utilitarianism agree over the fact (since theyre consequential) that rightness and wrongness are solely a function of an actions result and consequence. Utilitarianism is the preferred theory for business behaviors because it provides a clear and straightforward foundation for formulating and testing policies for the strategic business direction of the organization. Hence it can be said that a business policy is good if it promotes general welfare and it provides an objective and attractive way to resolve conflicts of self-interest. Individual decisions are regarded as a result of conformity with the organization and the differences in individual decisions are regarded as different instead of being right or wrong. These differences promote growth and expansion of the organization and businesses learn to adapt the different decisions based on the scenario and what the situation is demanding.

Ethical relativism theory projects morals as being the relative characteristics of societies. This means that an actions is rightness or wrongness depends on the particular societys moral norms (Barry, 2000). One action can be morally right for one society but immoral for another society. For the believer of ethical relativism, there exist no universal moral standards- meaning they cannot be universally applied to all peoples at all times. The moral standards that exist are those which can be judged against what a society practices on its own. While believing in ethical relativism, there is no common framework or guidelines for resolving moral disputes or for agreeing on ethical matters among different societies members because relatively each one is correct.

Wal-Mart is the big giant and a place where a lot of people do their shopping for the low prices and the variety of the products offered and was founded by Sam Walton. It is the leader in discount retailing today and has stores worldwide is considered to be the biggest company in the U.S. even though Wal-Mart likes to portray itself as a seller of U.S manufactured goods but in reality the company has products on its shelves from many foreign countries and questionable workshops and hence it really encourages products made outside U.S.  It is famously known how building of Wal-Mart has caused many manufacturers to go out of business and there has been a whole bout of controversies regarding unethical business practices.

It is my belief that the large corporations including Wal-Marts practices can be somewhat justified by utilitarian standards. The utilitarian principle of justice suggests that a society is just till the extent that its basic business institutions and corporate affairs are structured in the way so as to promote the maximum or average happiness of the society members.over the years, the Utilitarians have emphasized on the emphasis of a competitive economy. Hence, when Wal-Mart is built in a town, it brings with it a lot of competition and innovations. But the competition is positive or negative is another perspective that has to be separately looked at. But as far as the Utilitarian is concerned, an unregulated or a free market brings with it a lot of competition and struggle to improve so as to conquer the market share.
However, like mentioned before, this competition can sometimes be unfair and emerge from unfair practices. Wal-Mart is famous for unfair labor practices, discrimination against women employees, minorities, demeaning workers with disabilities and inequality based on sexual orientation. It is also legendary for forcing its suppliers to slash their margins, redesign their systems and sell at Wal-Marts prices.

Egoism doesnt take stand against certain outrageous acts such as stealing, racial and sexual discrimination and business frauds (adulteration of products, misbranding, short-changing of customers). This is because Egoism considers an act to be morally right if and only if it promotes an individuals interest or the organizations profit-making motive. There is another ethical concern that emerges when the employees and the middleoperational managers use practices that are unethical and are declared as unethical by the senior managers and the executives. This involves using questionable methods of persuasion, lying so as to promote certain products and causing it to spread because then everyone believes that it is the norm and everyones is practicing it already, and therefore, it is right.
The basic thing about deontological moral systems is that the moral principles are completely detached and unconcerned from any consequences or implications which are the result of following those principles blindly and without much thinking. Example of lying can be taken. For instance if a person believes that lying is morally wrong, heshe wont lie in any case even when not lying (telling the truth) would harm another person or jeopardize hisher life.

For ethical relativism, most theorists reject the theory because even though moral practices of societies differ, fundamental morals underneath these practices dont. Societies differ in their application of moral principles but agree on them. Also, some moral beliefs are culturally relative and others are not.

Utilitarianism has the tendency to incline towards one persons happiness and how that one action is the right action because of the positive feelings it is bringing. Utilitarianism, it should be remembered, is not about what is good for me it is about the maximum good generated for the greatest number of people in the environment. For Utilitarians, it is the action that produces the best outcome for all parties involved which is considered right.This is a drawback of Utilitarianism. The utilitarian calculation gets tough and requires that assignation of values to the benefits and harms that result from the actions taken and are compared with the benefits and harms that might be the result if other actions are taken. Hence, its often difficult, if not impossible measuring and comparing the values of certain benefits and costs of actions and thus it is another drawback. However, the greatest difficulty with Utilitarianism is that it fails to take into account considerations of justice. Moreover, there are certain examples when the action would be very good for the maximum people but actually be unjust.