Business Ethics

Business Ethics

Ottawa University

Abstract

This paper discusses the importance and main characteristics of business ethics. Also included are specific human resource strategies that are implemented by companies which aids in their overall code of ethics. This document also addresses ethical issues faced by Nike and courses of action required to fix their problems.

Business ethics refers to clear standards and norms that help employees to distinguish right from wrong behavior at work. It involves the extent in which a person's behavior measures up to standards which encompasses the law, organizational policies, professional and trade association codes, popular expectations regarding fairness and rightness, plus an individual's internalized moral standards (Joseph, 2003, p.2). Business ethics is the application of a moral code of conduct to the strategic and operational management of a business.

Business ethics covers a huge realm of activity which includes bankruptcies, scandals, and business meltdowns, and is not limited to issues related to financial reporting and disclosure, but also includes many areas of operations which include how employees are treated. Many executives report that an organization's reputation is a paramount concern in deciding whether to accept an offer of employment. A recent survey found that 65 percent of executives reported that they would thoroughly investigate the culture and value system of any prospective employer. In addition, the same survey revealed that 40 percent of executives had resigned from an organization at least once because of the employer's perceived unethical business practices (Mello, 2011, p. 50).

Business ethics and business morality result from an individual's own moral standards in the context of the political and cultural environment in which the organization is operating. Classifying the diverse elements of business ethics falls into one of three levels, macro, corporate, and individual (2011).

The macro level involves the role of business in the national and international organizations of society. At this level, roles of business in society and governance models must be determined to define what works best in a moral and responsible way. Morality is a widely interpretable concept, but the assumption of the understanding of proper behavior and knowing the difference between right and wrong, without specifying what constitutes what is right and wrong. Morality sets the stage for ethics and is the code of conduct by which business activity is carried out and allowed to be carried out by international rules and standards.

At the corporate level, corporate social responsibility is enforced and encompasses ethical issues faced by individual corporate entities which are included in the private and public sectors. In this level, the interpretation of rules and standards is what defines business ethics, which are affected by specific circumstances. In the corporate world, special attention to business ethics is on the rise throughout the world and many companies are beginning to realize that in order to succeed, they must earn the respect and confidence of their customers. Corporations are being asked, encourage, and urged to improve their business practices to emphasize legal and ethical behavior. Companies are increasingly held accountable for their actions, as demand grows for higher standards of corporate social responsibility.

The individual level of business ethics involves the behavior and actions of individuals within organizations. Factors such as personality, peer pressure, and the socio-political environment are determined and are evaluated by the moral and ethical code of conduct of the individual. Corporate entities are directly affected by the individual's moral and ethical stance.

As organizations are increasingly recognizing that employees are their most valuable asset, and not viewing them as means, human resource strategies have been implemented to protect the interest of these employees. Human resource managers have a need for discernment and determining the right thing to do in very complex situations. Human resource managers have the authority and support of management to make and implement decisions. They must also be able to resolve conflict between their professional judgments of what is right and the responsibility as an agent of the employer to do what the employer asks. In addition, they must be able to resolve conflicts of interest or the appearance of conflict of interest, when the personal interest of the human resource manager differs from the responsibility as an agent to the employer.

For human resource managers who wish to behave ethically, they must find ways to increase their abilities to recognize moral issues. This can be achieved by setting time aside to reflect, by talking with other managers about issues, by reading journals and newspaper articles devoted to ethics, and by listening to employees who voice concerns. To take the right course of action is usually translated by a company's policies and procedures handbook, which provides guidance to other managers and information to employees. The handbook helps ensure fairness by making the decision-making process more consistent and transparent. Human resource managers can also turn to professional associations for guidance.

A number of business practices contribute to the failure of business ethics. Business practices can be defined as being unethical and/or illegal. Unethical behavior that is not illegal falls into a gray area between right and wrong that makes it difficult to decide what to do when the behavior is encountered. Different people have different views regarding what is ethical and what is unethical. Business practices can include lying, cheating, and mistreatment to others. Reasons for unethical business practices could be to increase revenues, improve brand recognition, to better employee motivation and recruitment, and to promote new sources of finance.

By many, the fire fighting industry is considered to be very elite. Ten years of my career were spent in International Sales in this very rewarding industry. For seven years, I was employed by the Akron Brass Company. They are the manufacturer and world leader in high quality firefighting equipment. Examples of what Akron Brass produces are nozzles, monitors, eductors, water-flow test kits, valves, emergency scene lighting, and hose reels, just to name a few. Although Akron Brass products were very expensive when compared to competitors, they were sought by fire fighters globally as they are superior in quality. In addition, Akron