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Business Ethics and Social Responsibility
Any organization, including nonprofits, has to manage the ethical behavior of employees
an participants in the overall operations of the organization. The ethical conduct of
employees creates a culture of trust and respect that makes a business productive.
Business Ethics and Social Responsibility
We define business ethics as the principles and standards that determine acceptable
conduct in business organizations. Personal ethics, on the other hand, relates to an
individual's values, principles, and standards of conduct. The acceptability of behavior in
business is determined by not only the organization but also stakeholders such as
customers, competitors, government regulators, interest groups, and the public as well
as each individual's personal principles and values.
Many experts agree that ethical leadership, ethical values, and compliance are
important in creating good business ethics.
Many consumers and social advocates believe that businesses should not only make a
profit but also consider the social implications of their activities. We define social
responsibility as a business’s obligation to maximize its positive impact and minimize
its negative impact on society. Business ethics relates to an individual's or a work
group's decisions that society evaluates as right or wrong, whereas social responsibility
is a broader concept that concerns the impact of the entire business's activities on
society.
Recognizing Ethical Issues in Business
Recognizing ethical issues is the most important step in understanding business ethics.
An ethical issue is an identifiable problem, situation, or opportunity that requires a
person to chose prom among several actions that may be evaluated as right or wrong,
ethical or unethical. In business, such a a choice often involves weighing monetary
profit against what a person considers appropriate conduct.
Many business issues seem straightforward and easy to resolve on the surface but are
in reality very complex. A person often needs several years of experience in business to
understand what is acceptable or ethical. For example, it is considered improper to give
or accept bribes, which are payments, gifts, or special favors intended to influence the
outcome of a decision
One of the principal causes of unethical behavior in organizations is overly aggressive
financial or business objectives. Many of these issues relate to decisions and concerns
that managers have to deal with daily
Many ethical issues in business can be categorized by the context of their relation with
abusive and intimidating behavior, conflicts of interest, fairness and honesty ,
communications, misuse of company resources, and business associations.
Misuse of Company Time
Theft of time is the number one area of misconduct observed in the workplace. One
example of misusing time in the workplace is by engaging in activities that are not
necessary for the job. It is believed that the average employee steals 4.5 hours a week
with late arrivals, leaving early, long lunch breaks, inappropriate sick days. All of these
activities add up to lost productivity and profits for the employers and relate to ethical
issues in the area of time theft
Abusive and Intimidating Behavior
Abusive and intimidating behavior is the second most common ethical problem for
employees. These concepts can mean anything from physical threats, false
accusations, profanity, insults, yelling. Abusive behavior can be placed on a continuum
from a minor distraction to a disruption of the workplace.
Misuse of Company Resources
Misuse of company resources has been identified as a leading issue in observed
misconduct in organizations. Issues might include spending an excessive amount of
time on personal e-mails, submitting personal expenses on company expenses reports,
or using the company copier for personal use.
Conflict of Interest
A conflict of interest, on of the most common ethical issues identified by employees,
exists when a person must choose whether to advance his or her own personal
interests or those of others. To avoid conflict of interest, employees must be able to
separate their personal financial interests from their business dealings.
Fairness and Honesty
Fairness and honesty are at the heart of business ethics and relate to the general
values of decision makers. Beyond obeying the law, businesspersons are expected not
to harm customers, employees, clients, or competitors. Honestly and fairness can relate
to how the employees use the resources of the organization. Fairness can be defined
as being impartial and just, whereas honesty is defined as being truthful and
trustworthy. In contrast, dishonesty is usually associated with a lack of integrity, and
lying.
Communications
Communications is another area in which ethical concerns may arise. False and
misleading advertising, as quell as deceptive personal-selling tactics, anger consumers
and can lead to the failure of a business. Truthfulness about product safety and quality
are also important to consumers.
Business Relationships
The behavior of businesspersons toward customers, suppliers, and others in their
workplace may also generate ethical concerns. Ethical behavior within a business
involves keeping company secrets, meeting obligations and responsibilities, and
avoiding undue pressure that may force others to act unethically.
Managers in particular have the opportunity to influence employees’ actions. It is