Tabl 2712: Business Ethics and the Law

TABL 2712: BUSINESS ETHICS AND THE LAW

TAKE HOME ASSIGNMENT QUESTIONS

QUESTION 1

1.1 Introduction

Ethical conduct, from my perspective, is the act in ways consistent with what society and individuals typically regard are good and right values. In the discussion as follows, I will focus on ethics in the context of business.

1.2 Arguments for and against seeking to promote ethical conduct

A code of ethics is set as professional standard to define acceptable behaviors for members of a particular group, association or profession. A code of ethical conduct functions like the constitution of a company. It will not only boost employee morale and serve as a guide to help employees to find meaning in their work, but it will show outsiders that members of this organization adhere to the ethical guidelines listed in the course of business.

However, documenting subjective matters like what is considered ethical may restrict the operation of a company as what may seem right to one person is not necessarily feasible to the other. Additionally, enforcing such ethical conduct can be costly and time-consuming. Even after interpretation on it has been done, disconnection between the company’s actual practices and the code of ethics is very likely to exist, making the ethical standard a marketing strategy rather than guidelines for employees.

1.3 How companies define and promote ethical business conduct

1.3.1 Decision making processes

It is shown in several studies that unethical behavior when doing business stems from businessmen’s failure to ask whether the decision or action is ethical or not (Hunger and Wheelen, 2003). It then can be inferred that rather than simply following economic logic, incorporating ethical considerations into decision-making process conduces to promoting ethical conduct. An appropriate framework for ethical decision-making suggested by Ferrell and Fraedrich (2014) can be found in Appendix I.

1.3.2 Organizational culture and leadership

Organization culture refers to the values and norms shared among employees of an organization. An organization culture that emphasizes business ethics encourages people to consider ethical consequences when making decisions. To build such organization culture, three facets should be in place (Hill, Crook and Wickramasekera, 2013). Firstly, the businesses must articulate values that emphasize ethical behavior in an explicit way and now it has become common for companies to draft a code of ethics to achieve it. For example, Unilever has a code of ethics (Appendix II) grounded in Kantian ethics, conveying the appropriate ethical standard to managers and employees. Apart from formalizing the ethical priorities a business adheres to, leaders in the companies must stress the importance of business ethics with their action. Many companies such as Nike have hired independent auditors to ensure they are operating in a manner consistent with their ethical codes. Nike, in particular, has hired independent auditors to assure that subcontractors comply with Nike’s code of ethics. The last requirement to construct an ethical organization culture is to establish and perfect the incentive and reward system. This includes rewarding people engaged in ethical conducts and punishing those who do not. As the former CEO of General Electric, Jack Welch, evaluated the performance of managers, over-performers who showed right values would be given bonuses. At the same time, those who showed wrong values that were inconsistent with the core values of the company would be let go even if they were skillful in other aspects.

1.3.3 Hiring and Promotion

While it is clear that companies should hire people with sense of business ethics, implementing it in practice is not easy since unethical people tend to hide their natures. Some companies consequently adopt psychological tests to screen the applicants. For example, PwC, similar to other Big Four accounting firms, evaluate potential employees with personality questionnaires that offer insights of how they do things, thus enabling companies discern the applicants’ ethical predisposition. This could be a method to promote ethical conduct.

1.4 Why ethical conduct matters and conclusion

From my view, a company should behave ethically for the two main reasons. For one thing, ethical conducts will develop socially responsible reputation. This will contribute to recruiting more ethical employees and increase existing employees’ loyalty and productivity. The reputation effect will further extend to customers as research shows business ethical practices result in increased profitability (McMurrian and Matulich, 2011), implying that ethical business is more favorable among customers. Besides, companies with ethical behavior tend to attract investment capital. For another, ethical practices reduce the loss from prosecution and other legal charges for it is less likely for companies to violate the laws and regulations when they are behaving ethically.

A lesson learnt from the Toyota recall of its sticky gas pedals is that quality control means daily vigilance. Ethical oversight in even a tiny segment can lead to a catastrophe in reputation and trust.

Therefore, I agree with statement because performing ethics in every process of business, from recruiting employees, making decisions to retaining employees, monitoring supply chain and attracting customers as well as investors, contributes to a better performance.

QUESTION 2

2.1 Defining discrimination

Discrimination is unequal treatment or consideration, whether in favor of or against, a person or thing on the basis of the group, class or category that the person or thing belongs to rather than according to individual merit.

2.2 Examples of unethical and ethical discrimination

Unethical discrimination can be classified into four major types: race, sex, age and disability. To be mentioned, an example of sexual discrimination is Walmart’s women discrimination case where Walmart was criticized for paying its female employees less than its male employees as well as providing less trainings, smaller salary raises and few promotions to women.

In some cases, discrimination can be ethical. When the nature of the job requires a certain level of knowledge, skill or ability, the individual within a class will be favored. For example, an employer would rather hire a person without disability to perform heavy lifting tasks. A second example would be a corps de ballet recruits only women, as they believe the characteristics in women can best represent its artistic spirits. Besides, employers can legally discriminate against someone without a certain degree or certificate or someone with visible tattoos that contradict with company rules or culture. Such behavior is both legal and ethical.