Importance of Ethics in Business as an Academic Discipline

0. 1OUTLINE OF THIS PAPER This paper is discussed under the fol confuseding broad ambits Preliminaries 1. Statement of the Problem 2. Executive Summary Main typography 1. Introduction to Business respectable motive 2. object lesson doctrine as an Academic Discipline 3. Importance of honourable motive in Business as an Academic Discipline 4. The instance Against Business morals Education 5. Conclusion 0. 2STATEMENT OF THE PROBLEM Question 1 Discuss the importance of Ethics in trade as an Academic Discipline. 0. 3EXECUTIVE compendiumIn todays in high spiritsly competitive, performance-driven art organisation climate, regulations atomic number 18 non enough professional honourable motive codes ar non enough the old regulate of commercial enterprise respectable motive is non enough. According to a 2003 survey of incorporate directors and everyday counsel conducted by the National Association of bodily Directors and the the Statesn embodied Counsel Association, th e two groups overwhelmingly agree that the single measure that would more or less improve corporate governance is the establishment by senior management of an honourable business culture. And, Another clear message of the survey is that honorable petabitership from the top is the key to reducing corporate malfeasance. Considering the estimable failures in the last some(prenominal) years and the resulting crisis in confidence, a sincere commitment to creating and sustaining an honest business culture in existence and private sectors has never been more important. It is important that sever everyy individual feels personally honorablely responsible. How an individual treats others, is affected by the way the individual is treated within the administration or by society.The focus on honest motive provides a guide to individual and formational actions in a consistent manner. The call into chief ethical motive tries to answer is Is this the estimable thing to do? The eco nomic consumption of ethical inquiry is to create a frame subject area of general principles or righteousness and wrong, what unrivaled might do, and what ones duties are. The ethical application in a business situation is for managers to draw a line between ethical motive and individual or institutional self-interest. ethical analysis involves assessing issues and constituteing fear to the effects of capability decisivenesss on the lives of those who go forth be affected.The imperatives of day-to-day institutional performance are so compelling that there is little time or inclination to divert attention to the moral content of administrational decision- fashioning. honorableity appears to be so esoteric and qualitative in nature that it lacks substantive analogy to objective and quantitative performance. An effective organizational culture should advertise ethical style and discourage unethical conduct. Admittedly, ethical demeanour may cost the organization. gra de up though ethical problems in organizations continue to greatly concern society, organizations and individuals, the potential impact that organizational culture plenty postulate on ethical behavior has not reliablely been explored. What is needed in todays complicated times is for more organizations to step forward and operate with more positive and ethical cultures. Ethical decision do is key to the very fabric of administration and governance, either in a business denounceting or government operations. To have an ethical organization or business enterprise, requires ? having a critical mass of ethically responsible individuals ? romoting norms that win ethical behavior ? having leaders who execute ethically and serve as ethical role models for others to emulate. 1. 0INTRODUCTION 1. 1What is Ethics? Ethics has been defined in m all different ways by various flock, depending on the perceptive they have and to a fault the context of the definition. whatever of the thought s and definitions of term Ethics are as follows ? Ethics refers to well based standards of right and wrong that prescribe what humans ought to do, usually in terms of rights, obligations, benefits to society, fairness or specific virtues. Ethics means the continuous effort of canvas our own moral beliefs and our moral conduct, and striving to visualize that we, and the institutions we attend to shape, live up to the standards that are reason outable and solidly-based. ? Ethics is the study and development of ones ethical standards. It is necessary to constantly examine ones standards to ensure that they are reasonable and well-founded. ? Ethics refers to those standards that impose the reasonable obligations to refrain from behaving in an unacceptable manner, such as rape, stealing, murder, assault, slander or fraud. Ethical standards let in standards relating to rights such as rights to life, the right to freedom from injury and the right to privacy. ? Ethics has to do with acting ethically as individuals, creating ethical organizations and governments and fashioning our society as a whole ethical in the way it treats everyone. ? Ethics refers to standards of behavior that tell us how human beings ought to act in the many a(prenominal) other(prenominal) situations in which they go on themselves as friends, parents, children, citizens, business nation, and professionals. . 2Definition of Terminologies associated with Ethics What are the differences between comforts, morals and ethics? They all provide behavioral rules, after all. It may seem like split up hairs, unless the differences can be important when persuading others. Ethics Ethics may be defined as rules or standards governing the conduct of a person or the appendages of a profession. Ethics tend to be codified into a formal system or fructify of rules which are explicitly adopted by a group of people e. g. medical ethics.Ethics are thus internally defined and adopted, whilst morals tend to be externally imposed on other people. If you accuse someone of being unethical, it is equivalent of calling them unprofessional and may well be taken as a significant contumely and perceived more personally than if you called them immoral (which of course they may similarly not like). Values Values are the rules by which we make decisions ab reveal right and wrong, should and shouldnt, strong and bad. They also tell us which are more or less important, which is useful when we have to trade off meeting one value over other.Values can be defined as beliefs of a person or kind group in which they have an emotional investment (either for or against something) he has very conservatives set Morals Morals have a greater affable element to value and tend to have a very broad acceptance. Morals are far more about good and bad than other values. We thus judge others more strongly on morals than values. Morals can be defined as motivation based on ideas of right and wrong. Mor al conduct is a mood arousing good behavior with others by showing happy mien, nice wording, and kind manners.Norms Norms are the behavioral expectations and cues within a society or group. They have been defined as the rules that a group uses for appropriate and inappropriate values, beliefs, attitudes and behaviors. These rules may be explicit or implicit. Failure to stick to the rules can result in severe punishments, the most feared of which is exclusion from the group. They have also been described as the customary rules of behavior that coordinate our interactions with others. The social norms indicate the established and approved ways of doing things, of dress, of speech and of appearance. 1. 3Applications of EthicsEthics have been adapted in various areas of life such as Legal ethics This encompasses an ethical code governing the conduct of people engaged in the practice of law. The model rules address the client-lawyer dealingship, duties of a lawyer as advocate in adver sary proceedings, dealings with persons other than clients, law firms and associations, customary service, advertising, and of importtaining the integrity of the profession. Respect of client confidences, candor toward the tribunal, truthfulness in statements to others, and professional independence are some of the defining features of legal ethics.Professional responsibility is the area of legal practice that encompasses the duties of attorneys to act in a professional manner, obey the law, avoid conflicts of interest, and put the interests of clients ahead of their own interests. Professional ethics This concerns the moral issues that become because of the specialist hunchledge that professionals attain, and how the use of this knowledge should be governed when providing a service to the public. The professional carries superfluous moral responsibilities to those held by the population in general.This is because professionals are unfastened of making and acting on an informe d decision in situations that the general public cannot, because they have not received the relevant preceptal activity. For example, a layman member of the public could not be held responsible for failing to act to save a car crash victim because they could not give an emergency tracheotomy. This is because they do not have the relevant knowledge. In contrast, a fully trained doctor (with the tame equipment) would be capable of making the correct diagnosis and carrying out the procedure and we would think it wrong if they stood by and failed to help in this situation.You cannot be held accountable for failing to do something that you do not have the ability to do. This additional knowledge also comes with authority and power. The client places trust in the professional on the basis that the service provided bequeath be of benefit to them. It would be preferably possible for the professional to use his authority to exploit the client. An obvious example is that of the dentist wh o carries out unneeded dental work on his patients in fiat to gain more money. It is likely that the patient will not have sufficient knowledge to question what is being done, and so will undergo and pay off for the treatment.Work ethic This is viewed as a set of values based on the moral virtues of hard work and diligence. It is also a belief in moral benefit of work and its ability to enhance character. Good work ethics may include being ? reliable ? having initiative ? maintaining social skills 1. 4Branches of Ethics descriptive Ethics it simply involves describing how people behave and/or what sorts of moral standards they claim to follow. Descriptive ethics will include research from the sports stadiums of anthropology, psychology, sociology and explanation in order to determine what people do or have believed about moral norms. . g. a description of what clubs and executives actually do value Descriptive ethics is sometimes referred to as comparative ethics because so mu ch activity can involve comparing ethical systems comparing the ethics of the agone to the present, comparing the ethics of one society to another and comparing the ethics which people claim to follow with the actual rules of conduct which do describe their actions. any said, descriptive ethics asks two basic questions 1. What do people claim as their moral norms? 2. How do people actually behave when it comes to moral problems?Metaethics this investigates where our ethical principles come from, and what they mean. Are they merely social inventions? Do they involve more than expressions of our individual emotions? It is a philosophical study of the center, nature and methodology of moral judgments and terms, relations between moral concepts, the correct ways of arguing about moral issues, similarities and differences between various normative systems (e. g. , morality, religion, law, etiquette, aesthetics, the requirements of prudence, the judgments of taste), etc.There are ques tions about morality that are not concerned with its content, being neither questions on what principles there should be nor how we moldiness live. These spring instead from puzzles about the logical form of morality. For example, the question of the objectivity or subjectivity of moral judgements and the problem of the logical relation between moral beliefs and factual beliefs are not directly concerned with the content of any particular form of moral life, scarce with what the general logical rules of any morality or any moral argument, whatever it advocates or condemns, must be.According to Richard Garner and Bernard Rosen, there are three kinds of meta-ethical problems, or three general questions ? What is the meaning of moral terms or judgments? ? What is the nature of moral judgments? ? How may moral judgments be supported or defended? A question of the first face might be, What do the words good, bad, right and wrong mean? For example, until you have decided whether moral beliefs reflect some objective truth or are dependent on the personal desires of their holders you cannot know what form of argument is appropriate for the support or refutation of any given belief.Indeed you may not know if rational argument about morality is possible at all. Normative ethics Takes on the task of arriving at moral standards that regulate right and wrong conduct. This may involve articulating the good habits that we should acquire, the duties that we should follow, or the consequences of our behavior on others. Normative ethics is concerned with classifying actions as right and wrong without bias, as opposed to applied ethics. e. g. an account of what quite a littles and executives should valueApplied ethics involves examining specific polemical issues, such as abortion, infanticide, animal rights, environmental concerns, homosexuality, capital punishment, or nuclear war. By using the conceptual tools of metaethics and normative ethics, countersigns in applied et hics try to resolve these controversial issues. The lines of distinction between metaethics, normative ethics, and applied ethics are often blurry. For example, the issue of abortion is an applied ethical topic since it involves a specific type of controversial behavior.But it also depends on more general normative principles, such as the right of self-rule and the right to life, which are litmus tests for determine the morality of that procedure. The issue also rests on metaethical issues such as, where do rights come from? and what kind of beings have rights? 1. 5Core Ethical Values The following recommended core ethical values were developed based on research by the program founder, Dr. Ron Bucknam, for the development of an applied ethics in professional practice program to assist in evolving solutions to ethical dilemmas encountered in professional practice. Integrity o exercising good judgment in professional practice o adherence to ethical principles ? satinpod ? truthfulne ss ? fairness ? sincerity ? Fidelity ? fealty to clients ? allegiance to the public trust ? loyalty to employer, firm or agency ? loyalty to the profession ? for the theist, faithfulness to God ? Charity 1) kindness 2) caring 3) good will 4) tolerance 5) compassion/mercy ? Responsibility 1. reliability/dependability 2. accountability 3. trustworthiness ? will power ? acting with reasonable restraint ? not indulging in excessive behaviorAll the above ethical values are important to development and maintenance of an ethical business organization as well as an ethical society. 1. 6Development of Ethics The study of business ethics in North America has evolved through five distinct stages ? in the lead 1960 ? The 1960s ? The 1970s ? The 1980s ? The 1990s and continues to evolve in the 21st century. Ethics in Business Before 1960s Ethics in Business Until 1960, ethical issues related to business were often discussed within the domain of theology or philosophy. Catholic collages and universities began to offer courses in social ethics.Protestants also developed ethics courses in their seminars and schools of theology and address issues concerning morality and ethics in business. The protestant work ethics advanced individuals to work hard and attain success in the capitalistic system. such religious traditions provided a foundation for the future field of business ethics. The 1960s The rise of social issues in business The 1960s saw the decay of inner cities and the growth of ecological problems such as pollution and tendency of toxic and nuclear waste. In 1962, President John F.Kennedy delivered special message on protecting the consumer interest, in which he outlined four basic consumer rights the right to safety, the right to be informed, the right to choose, and to be heard. This came to be known as the consumer bill of rights. The modern consumer movement began in 1960s. At this stage, activities that could destabilize the economy or discriminate any cl ass of citizen began to be viewed as unethical The 1970s Business ethics as an emerging field Business ethics began to develop as an emerging field of study in the 1970s.Business professors began to check and write about corporate social responsibility. Companies became more concerned with their public image. The 1980s Consolidation In the 1980s business academics and practitioners acknowledged business ethics as a field of study. Five hundred courses in business ethics were offered at collages crosswise the country with more than forty thousand students enrolled. Corporations that were once nationally based began operating internationally and found themselves mired in value structures where accepted rules of business behavior no longer applied.The 1990s Institutionalization of business ethics The administration of President Clinton continued to support self regulation and free trade. The federal sentencing guidelines for organizations set the tone for organizational ethical compl iance programs in 1990s. Companies were made to develop corporate values, enforce its code of ethics, and strive to bar misconduct. 1. 7Why Should One Be Ethical? Ethical behavior can be defined as Conducting ones life in complete accord with a firmly held set of values and principles. These principles may be derived from religious beliefs, philosophical arrest, etc.Application should be in all areas of ones life personal, family, business, social, etc. The question asked by some is whether there is a universal ethical standard for everyone. And the answer is, yes Ethics is taught in different cultures using various approaches as seen below. Such approaches are at times used in school for more effectiveness. In Principle, there is a universal ethical standard practiced by Christian principle The Golden Rule Do unto others as you would have them do unto you. Luke 629-38 Thou shalt love thy neighbor as thyself. Luke 1027Other religions also have their own golden rule, that they teach their believers, which guides the moral and ethical behavioral standard. For example Islam No one of you is a believer until he loves for his brother what he loves for himself. Hinduism Do nothing to thy neighbor which thou wouldst not have him do to thee. Sikhism Treat others as you would be treated yourself. Buddhism Hurt not others with that which pains thyself. Confucius What you do not ask done to yourself, do not do to others. Aristotle We should behave to our friends as we wish our friends to behave to us. PlatoMay I do to others as I would that they should do unto me. In studying business ethics, we postulate to know the facts about what people actually do value. But we also want to know what people ought to value. Business ethics asks questions about how things should be done, and thus go beyond simply asking questions about ethos. There is already something droll about this question. It is like asking, Why are bachelors unmarried? They are unmarried by definitio n. If they were married, they would not be bachelors. It is the comparable with ethics. To say that one should do something is another way of saying it is ethical.If it is not ethical, then one should not do it. Perhaps when business people ask why they should be ethical, they have a different question in mind what is the motivation for being good? Is their something in it for them? It is perfectly all right to ask if there is a return for being good, but this has nothing to do with whether one should be good. It makes no sense to try convincing people that they should be good by pointing to the final payments that may follow. One should be good because good is, by definition, that which one should be. As for motivation, good behavior often brings a reward, but not every time. figure about it. If it were always in ones interest to be good, there would be no need for ethics. We could simply act selfishly and impart about obligation. People invented ethics precisely because it doe s not always coincide with self interest. Impacts of not inculcating ethics 2. 0ETHICS AS AN ACADEMIC DISCIPLINE 2. 1Can Ethics Be Taught? Of the Institutions that have contributed to the quality of human life, business ranks with science, art, and education. Business has created the wealth that has given unprecedented numbers of individuals fiscal control of their lives.It has expanded immeasurably the range of goods and serve available to individuals. It has broken smooth countless centuries-old barriers of racial, sexual, religious, and ethnic prejudice. And it has been the vehicle for countless numbers of individuals to develop their fullest potentials in achieving their dreams. In short, business has been a prime means in making it possible for millions to pursue their lives in a wealthy, healthy, rational and exciting world. Yet no other human institution has been so plagued by suspicions of immorality. Business ethics, the old joke goes, Isnt that a contradiction in terms? How moralists evaluate business depends upon their fundamental moral principles. Most moral philosophy has include the assumption that morality and serviceableity are two different things. Older moralists typically argued that the demands of morality conflicted with the requirements of business practicality, and so condemned business. More recent moralists tend to adopt a less extreme version of the dichotomy, holding that determining what is practical and what is moral involves following two distinct lines of thought, although what is moral and what is practical happen to coincide in many in roles. (Stephen Hicks , PhD.Chairman of the philosophy department at Rockford College, Stephen Hicks is the author of a forthcoming book on business ethics. ) Since Objectivism is unique in its rejection of the traditional dichotomy of the moral and the practical, it offers a unique perspective on the full range of business ethics issues. Ayn Rands Atlas Shrugged, The Virtue of Selfishness, and Capitalism The Unknown Ideal detain by far the best presentation of the broader moral context within which to evaluate the various dimensions of business practice. The major issues in business ethics can be classified into four areas ?The relationship between business and consumers ? The relationship between employers and employees ? The nature and value of special forms of business organizationmost notably, that of the corporation ? The nature and value of financial markets The issue of the worthy scope of government regulation cuts across these four categories. Miscellaneous issues such as waste disposal (the environment) and investing in morally dubious foreign nations (such as Communist China or Iraq) are often debated in the business ethics literature, but are primarily issues of political theory and so do not fit into the above business ethics categories.Even granting that business ethics is important, many seem to believe that there is no point in studying the subject. Ethics is something you feel, not something you think. Finance, marketing, operations, and even business law lend themselves to gifted treatment, but ethics does not. The idea that ethics has no intellect content is odd indeed, considering that some of the most famous intellectuals in world history have given it a central place in their thought (Confucius, Plato, Aristotle, Maimonides, Thomas Aquinas, etc. ). Ethics is in fact a highly developed field that demands close reasoning.The Western tradition in particular has given rise to sophisticated deontological, teleological and consequentialist theories of right and wrong. No one theory explains everything satis cipherily, but the same is true, after all, in the natural sciences. Even when they grant that ethics has intellectual content, people often say that studying the field will not lurch behavior. Character is formed in primal childhood, not during a professors lecture. If the suggestion here is that college-level study do es not change behavior, we should shut down the entire business school, not only the ethics course.Presumably the claim, then, is that studying finance and marketing can influence ones conduct, but studying ethics cannot. This is again a curious view, since ethics is the one field that deals explicitly with conduct. Where is the evidence for this view? The early origins of character do not prevent finance and marketing courses from influencing behavior. Why cannot ethics courses also have an effect? Ethics courses have a number of features that seem likely to influence behavior ? Ethical courses provide a language and conceptual framework with which one can talk and think about ethical issues.Their emphasis on case studies helps to make one aware of the potential consequences of ones actions. ? They present ethical that theories help define what a valid ethical argument looks like. ? They teach one to make distinctions and avoid fallacies that are so common when people make decision s. ? They give one an opportunity to think through, at ones leisure, complex ethical issues that are likely to arise later, when there is no time to think. ? They introduce one to such specialized areas as product liability, employment, intellectual property, environmental protection, and cross-cultural management. They give one practice at articulating an ethical position, which can help resist pressure to compromise. None of this convinces one to be good, but it is useful to those who want to be good. It may also improve business conduct in general. ? They enable an individual strike the unethical business conducts that occurs in the business world to-date, for example o Account Fraud o Insider Trading (of stock and Bonds) o Falsifying Documents o Deceptive Advertising o Defective Products o Bribery o Employee Theft ? They train the society and future generations to be ethical thereby raising the ethical standards in the business world. An individuals personal values and moral ph ilosophy are only one factor in the ethical decision-making process. The courses enable an individual to commemorate the individuals everyday ethical issues from business ones. ? They enable one to deal with individuals personal moral dilemmas as these issues affect everyones ability to function on the job. How many of the recent business poops would have occurred if subordinates had possessed the skills, vocabulary and conceptual equipment to raise an ethical issue with their coworkers? Ethics not only should be studied alongside management, but the two fields are closely related.Business management is all about making the right decisions. Ethics is all about making the right decisions. So what is the difference between the two? Management is concerned with how decisions affect the union, sequence ethics is concerned about how decisions affect everything. Management operates in the specialized context of the firm, speckle ethics operates in the general context of the world. M anagement is therefore part of ethics. A business manager cannot make the right decisions without understanding management in particular as well as ethics in general. Business ethics is management carried out in the real world. This is why usiness majors should study ethics for future benefit in the business world. 3. 0IMPORTANCE OF ETHICS IN origin AS AN ACADEMIC DISCIPLINE 3. 1Benefits of Ethics in Business Business ethics started developing as an academic discipline in the 1970s. At this time, theologians and philosophers had laid down the ground work suggesting that genuine principles could be applied to the corporate activities. Using this foundation, business professors started to teach and write about corporate social responsibility which is an organizations obligation to maximize its positive impact to stake holders and to minimize its negative impact.A Marketplace Advantage When most managers and employees study ethics in learning institutions as an academic discipline, i t enables them gain intelligence of business ethics, that later attracts more customers and investors who will have more trust for the corporate practices and values as primary considerations in their decision-making to either, if customers, procure the organizations product or, if investors, decide to invest in the organization.Superior Employee Performance With the company employees and management application of their academic gained business ethics practices, the companies with safe business ethics and established values report improved employee morale, reduced employee turnover and increased productivity. As a result, the organization is able to work towards achieving its objectives collectable to enhanced violate performance of the employees. Reputation ManagementWorkers in the organization can use their academically gained ethical lessons since if an organization is damaged by scandal or unethical behavior, a companys reputation may never recover resulting in lost revenu e, low employee morale, and increased governmental and public scrutiny. Emphasizing responsible business conduct is the surest means of preserving a companys intangible assets. Powerful legal and Financial IncentivesAnother importance for the organization to follow business ethics is that the international regulatory developments shall provide strong legal and financial incentives to corporations that establish standards of conduct and provide ethics education and training to employees promoting business ethics as an academic discipline and ethical conducts of individuals in the organization. Enhanced Consumer ad employee loyalty Consumer and employee commitment comes from their belief that their future is attached to the organization and thus are willing to make sacrifices for the organization.Study of ethics as an academic discipline is able to highlight to the consumer and employees the importance to be loyal to one organization the benefits are reduced prices to the consumers an d ability to the seller to understand the customer needs, it also promotes more trust to the employees who are also able to share during the company success periods. Increased Organization Profits Another importance of business ethics as an academic discipline is that the company can improve its pay base. A company cannot nurture and develop an ethical climate unless it has achieved adequate financial profits.Businesses with greater resources have means to practice social responsibility while serving their customers, valuing their employees, and establishing trust with the public. Many studies have found relationships between corporate social responsibility and business performance. Customer satisfaction Customer satisfaction is another important value business receives from better ethical operations of the organization that serves its customers and customer satisfaction is one of the most important in an effective business strategy.This can be achieved one way if the business oper ates ethically by considering the customer expectations and needs as well as avoiding exploitation of the customers. Investors loyalty Investors today are extremely concerned with the organizations ethics, social responsibility, and reputations of the companies in which they invest in. investors also do recognize that the ethical climate provides a foundation of efficiency, productivity and profitability. Many companies such as Global crossing, Adelphia, Freddie Mac lost their investors due to unethical standards in their operations. Differentiating between personal and business ethicsMany people believe that individuals ethics can be applied in the business setting, that is, wrong study of business ethics as an academic discipline helps to give a difference between the personal ethics and business ethics that can be applied in solving the organizations ethical dilemmas. Identification of ethical issues Study of ethics as an academic discipline also helps in enlightening individuals on ways to identify and deal with business ethics issues. It also enables both organizations and individuals to learn about ethical decision making and ways to promote ethical standards in the organization.By studying business ethics one begins to understand how to cope with conflicts. Promotion of organization responsibility Study of ethics as an academic discipline also helps to ensure the organization takes its responsibility in the society and help solve the company stake holders problems. 3. 2Societal Costs of Unethical demeanour 1. rightfulness enforcement and other security personnel 2. Physical protection (locks, electronic security, fences, vaults, etc. ) 3. A substantial portion of attorney and court system costs 4. several(prenominal) welfare costs 5. Costs of collecting taxes 6. Wasted/misused investment funds . A substantial portion of accounting/auditing costs 8. A bighearted fraction of costs for regulators and examiners 9. Some marketing/advertising costs 10. C osts for institutions like better business bureaus, consumer protection agencies 11. Some costs of bankruptcy 12. escape of investment from outside investors, tourists 3. 3Business Costs of Unethical Behavior 1. breathing out of physical assets 2. Increased costs of security 3. Loss of customers especially those who value ethics 4. Loss of employees especially the more ethical 5. Loss of reputation 6. Increased legal costs 7. Higher costs of debt 8.Loss of investor confidence (lower stock price, difficulty in raising funds, problems with lenders) 9. Regulatory intrusion 10. Costs of bankruptcy 3. 4How Does Ethical Behavior Add Value? pause information a. Trust from investors b. Lower costs for audits, controls, investigations c. Better allocation of resources d. Customers will be more loyal e. Lower costs from suppliers f. Attracting and retaining better employees Fair competition g. Lowers cost of business in economy h. Leads to better decision-making (do whats best for firm, not one individual) i. Improves competitive nature of a countrys economyJust compensation j. Creates a more vibrant, entrepreneurial economy k. Attracts and retains better employees Rights of others l. Draws upon talents of wider set of individuals m. Develops long-term respect from the community n. Maintains the environment for long-term value to all 3. 5How Can Ethical Values be Taught? train 1 The Foundation Personal Ethical Understanding ? Concepts of right and wrong, fair play, respect for rights of others, honesty, personal integrity ? Best learned in the home at an early age and follow-up is needed throughout life ? Institutions (churches, schools, etc. can help ? Difficult to back fill in adulthood train 2 Application to Business Application of Ethics to Business Situations ? Can be taught in management education and organizations provided students have a personal understanding of ethics ? Taught by modeling (cases and personal example are helpful) ? Can be reinforced by policies, codes of ethics, training ? Businesses can teach through proper modeling Companies also have to further strengthen ethics management and social responsibility activities to improve their public image Korean Commerce-Industry-Energy Minister lee side Hee-beom.Level 3 Ethical Courage ? It is not sufficient to simply understand ethical principles ? One must have the courage to pay a price for being ethical ? Examples can be helpfulcase studies showing people willing to stand up for ethical principles ? Again, it helps to have practiced ethical behavior over many yearsespecially in small things Level 4 Ethical Leadership ? The ability and willingness to encourage others to behave ethically ? Can be taught through cases, problem solving, study of successful organizations ?Developing an organizational climate that fosters ethical behavior ? Structuring policies that encourages ethics ? Behaving ethically while facing the pressures of leadership 3. 6Challenges of Teaching Et hics & Ethical Dilemma As the twenty-first century approaches, companies face a variety of changes and gainsays that will have a profound impact on organizational dynamics and performance. In many ways, these changes will decide who will survive and prosper into the next century and who will not. Among these challenges are the following ? The challenge of international competition. The challenge of new technologies. ? The challenge of increased quality. ? The challenge of employee motivation and commitment. ? The challenge of managing a diverse workforce. ? The challenge of ethical behavior. 3. 7Ethics and The Challenge Of Ethical Behavior The word ethics is often in the news these days. Ethics is a philosophical term derived from the Greek word ethos meaning character or custom. This definition is germane to effective leadership in organizations in that it connotes an organization code conveying moral integrity and consistent values in service to the public. accredited organizatio ns will commit themselves to a philosophy in a formal pronouncement of a Code of Ethics or Standards of Conduct. Having done so, the recorded idealism is distributed or shelved, and all too often that is that. Other organizations, however, will be concerned with aspects of ethics of greater specificity, usefulness, and consistency. Formally defined, ethical behavior is that which is morally accepted as good and right as opposed to bad or wrong in a particular setting. Is it ethical, for example, to pay a bribe to obtain a business contract in a foreign country?Is it ethical to allow your company to withhold information that might discourage a job candidate from joining your organization? Is it ethical to ask someone to take a job you know will not be good for their career progress? Is it ethical to do personal business on company time? The list of examples could go on and on. Despite ones initial inclinations in response to these questions, the major point of it all is to remind org anizations that the public-at-large is demanding that government officials, managers, workers in general, and the organizations they represent all act according to high ethical and moral tandards. The future will bring a renewed concern with maintaining high standards of ethical behavior in organizational transactions and in the workplace. Many executives, administrators, and social scientists see unethical behavior as a cancer working on the fabric of society in too many of todays organizations and beyond. Many are concerned that we face a crisis of ethics in the West that is undermining our competitive strength. This crisis involves business-people, government officials, customers, and employees. Especially worrisome is unethical behavior among employees at all levels of the organization.For example, a recent study found that employees accounted for a higher percentage of retail thefts than did customers (Silverstein, 1989). The study estimated that one in every fifteen employees steals from his or her employer. In addition, we hear about flagitious and unethical behavior on Wall Street, pension scandals in which disreputable executives gamble on risky business ventures with employees retreat funds, companies that expose their workers to hazardous working conditions, and blatant favoritism in hiring and promotion practices.Although such practices occur throughout the world, their presence nonetheless serves to remind us of the challenge facing organizations. This challenge is especially difficult because standards for what constitutes ethical behavior lie in a colourise zone where clear-cut right-versus wrong answers may not always exist. As a result, sometimes unethical behavior is forced on organizations by the environment in which it exists and laws such as the Foreign degeneration Practices Act. For example, if you were a sales representative for an American company abroad and your foreign competitors used bribes to get business, what would you do?In the United States such behavior is illegal, nevertheless it is perfectly acceptable in other countries. What is ethical here? Similarly, in many countries women are systematically discriminated against in the workplace it is felt that their place is in the home. In the United States, again, this practice is illegal. If you ran an American company in one of these countries, would you hire women in important positions? If you did, your company might be isolated in the larger business community, and you might lose business.If you did not, you might be violating what most Americans believe to be fair business practices. The effective management of ethical issues requires that organizations ensure that their managers and employees know how to deal with ethical issues in their everyday work lives. Therefore, organizational members must first understand some of the underlying reasons for the occurrence of unethical practices. 3. 8Unethical Behavior Why Does It Occur In Organizations? The potential for individuals and organizations to behave unethically is limitless.Unfortunately, this potential is too frequently realized. Consider, for example, how greed overtook concerns about human welfare when the Manville Corporation contain evidence that asbestos inhalation was killing its employees, or when Ford failed to correct a known defect that made its Pinto vulnerable to gas tank explosions following low speed rear-end collisions (Bucholz, I 989). One answer to the question of why individuals knowingly commit unethical actions is based on the idea that organizations often reward behaviors that violate ethical standards.Consider, for example, how many business executives are expected to deal in bribes and payoffs, despite the negative publicity and ambiguity of some laws, and how good corporate citizens who blow the whistle on organizational wrongdoing may fear being punished for their actions. Jansen and Von Glinow (1985) explain that organizations tend to develop coun ternorms, accepted organizational practices that are contrary to prevailing ethical standards. It is not too difficult to recognize how individuals can knowingly engage in unethical practices with such mentalities.The overemphasis on short monetary gain and getting votes in the next election may lead to decisions and rationalizations that not only hurt individuals in the long run, but scupper the very existence of organizations themselves. Some common rationalizations used to justify unethical behavior are easily derived from Gellerman (1986) ? Pretending the behavior is not really unethical or illegal. ? Excusing the behavior by saying its really in the organizations or your best interest. ? Assuming the behavior is okay because no one else would ever be expected to find out about it. Expecting your superiors to support and protect you if anything should go wrong. Rules, procedures, and other control mechanisms often lag behind growth of a firm, providing organizational members w ith an opportunity to behave illegally because no internal rules prescribe such behavior. Predisposition indicates a tendency or inclination to select certain activitiesillegal onesover activities because of socialization or other organizational processes. Baucus and Near (1991) avoid the assumption that a firms managers or agents subscribe to a different set of ethical standards than the rest of society.Instead, they recognize that organizations, and industries, can exert a powerful influence on their members, even those who initially have fairly strong ethical standards. Certain perseverance cultures may predispose organizations to develop cultures that encourage their members to select unethical acts. If an organizations major competitors in an industry are performing well, in part as a result of unethical activities, it becomes difficult for organizational members to choose only unethical actions, and they may regard unethical actions as a standard of industry practice.Such a s cenario results in an organizational culture that serves as a strong precipitant to unethical actions. The next section looks at the organizational culture-ethical behavior relationship. The ethical climate of an organization is the shared set of understandings about what correct behavior is and how ethical issues will be handled. This climate sets the tone for decision making at all levels and in all circumstances. Some of the factors that may be emphasized in different ethical climates of organizations are (Hunt, 1991 Schneider and Rentsch, 1991) ?Personal self-interest ? friendship profit ? Operating efficiency ? Individual friendships ? Team interests ? Social responsibility ? Personal morality ? Rules and standard procedures ? Laws and professional codes Pressure, opportunity, and predisposition can all lead to unethical activities however, organizations must still take a proactive stance to promote an ethical climate. The final section provides some useful suggestions availab le to organizations for creating a more ethical climate. 3. 9Promoting an Ethical Climate Some Suggestions and StrategiesRecent literature has suggested several strategies for promoting ethical behavior in organizations. (Adler and Bird, 1988 Burns, 1987 Harrington, 1991 Raelin, 1987 Stead etal. , 1990). 1. First, chief executives should encourage ethical consciousness in their organizations from the top down showing the support and care about ethical practices. 2. Second, formal processes should be used to support and reinforce ethical behavior. For example, internal regulation may involve the use of codes of corporate ethics, and the availability of appeals processes. 3.Finally, it is recommended that the philosophies of top managers as well as immediate supervisors focus on the institutionalization of ethical norms and practices that are incorporated into all organizational levels. The philosophies of top managers as well as immediate supervisors represent a critical organization al factor influencing the ethical behavior of employees (Stead etal. , 1990). A seven-step checklist that organizations should use to help their employees in dealing with an ethical dilemma (Schermerhorn, 1989 Otten, 1986) 1. Recognize and clarify the dilemma. 2. Get all the possible facts. . List all your options. 4. Test each option by asking Is it legal? Is it right? Is it beneficial? 5. Make your decision. 6. Double check your decision by asking How would I feel if my family found out about this? How would I feel if my decision was printed in the local newspaper? 7. Take action. An effective organizational culture should encourage ethical behavior and discourage unethical behavior. Admittedly, ethical behavior may cost the organization. An example might be the loss of sales when a international firm refuses to pay a bribe to secure business in a particular country.Certainly, individuals might be reinforced for behaving unethically (particularly if they do not get caught). In a similar fashion, an organization might seem to gain from unethical actions. For example, a purchasing agent for a large corporation might be bribed to purchase all needed office supplies from a particular supplier. However, such gains are often short-term rather than long-term in nature. In the long run, an organization cannot operate if its prevailing culture and values are not congruent with those of society.This is just as true as the notice that, in the long run, an organization cannot survive unless it produces goods and services that society wants and needs. Thus an organizational culture that promotes ethical behavior is not only more compatible with prevailing cultural values, but, in fact, makes good sense. Although much remains to be learned about why ethical behavior occurs in organizations and creating and maintaining organizational cultures that encourage ethical behavior, organizations can benefit from the following suggestions ? Be realistic in setting values and g oals regarding employment relationships.Do not promise what the organization cannot deliver. ? march on input throughout the organization regarding appropriate values and practices for implementing the cultures. Choose values that represent the views of employees at all levels of the organization. ? Do not automatically opt for a strong culture. Explore methods to provide for diversity and dissent, such as grievance or complaint mechanisms or other internal review procedures. ? Insure that a whistle-blowing and/or ethical concerns procedure is established for internal problem-solving (Harrington, 1991). Provide ethics training programs for all employees. These programs should explain the underlying ethical and legal (Drake and Drake, 1988) principles and present practical aspects of carrying our procedural guidelines. Understand that not all ethical situations are clear-cut. Like many basic business situations, the organization should recognize that there are ambiguous, grey areas where ethical tradeoffs may be necessary. More importantly, some situations have no simple solution (Cooke, 1991). ? Integrate ethical decision-making into the performance appraisal process. . 0THE CASE AGAINST BUSINESS ETHICS EDUCATION 4. 1The Milton Friedman Argument According to Milton Friedmans philosophy it states that the ethical duty of business people is to maximize profit. He also says in his philosophy that businesses should be concerned with stakeholders wealth maximization which requires competency in their business. This means that they (business people) should study marketing, finance, and operations and should not waste time studying ethics. Freidman advances two main arguments for his position.First that corporate executives and directors are not qualified to do anything other than maximize profit. Business people are experts at making money, not making social policy, and it is by making money, that they contribute to human welfare. They lack the perspective and trai ning to address complex social problems, which should be left to government and social service agencies The second argument which is rooted in Friedmans libertarian philosophy maintains that corporate officers have no right to do anything other than maximize profit. Corporate officers have no right to spend investors money on social welfare.Sole proprietors can spend the companys money the way they want, since it is their money, but fiduciaries and hired managers have no such privileges. If they want to contribute to social causes, they are free to donate as much of their own money as they please. In the first argument, determining just how far they should go in order to meet this goal is what business ethics is all about. Business ethics rather than social ethics in general is the required competency. Students concede to this in that once business ethics is distinguished from ethics in general simply collapses into the duty of maximizing profit under the law.There are no specifical ly business related obligations than this and no training beyond business law and the traditional managerial skills is required. 4. 2The Argument from Incentives This argument begins with the familiar hypothesis that economic phenomena are best explained as resulting from the choices of utility maximizing, self interested individuals. Moral sentiments therefore play no significant role in economic life. Even if there are duties beyond profit maximization, the only way to encourage ethical behavior is to install financial and legal incentives.Business People respond to these not ethics lectures. If business people behave ethically, it is only because financial inducements and legal sanctions are properly calibrated, not because Kant or Aristotle inspired them to do the right thing. For example in the U. S. business scandals can only be addressed by such measures as regulatory reform, improved corporate governance, and removal of conflict of interest. Ethics instructions have no place in this picture. 4. 3The intestine Feeling Argument One cannot study ethics in a meaningful sense anyway, since it is something ou feel, not something you think about. Ethical judgment is seen as an basically non-rational function that is tied to emotions and early childhood development. 4. 4The Moral Development Argument. Moral character is formed in early childhood, not while sitting in ethics class. By the time students enter business school, it is too late to change. One learns ethics from mom and dad, not from college professors. Moral character is fixed early in life. This does not imply that ethics instruction serves no useful purpose, since it can change behavior even if it doesnt change character.The opponents of ethics education presumably concedes that finance, marketing and operations courses change behavior, but insist that ethics courses do not. Where is the evidence showing the ethics which directly deals with how one should behave, incapable of ever-changing behav ior? There are a number of reasons to suspect that ethics instructions can affect conduct without going as far as to change character. They are ? It provides a language and conceptual framework with which one can talk and think about ethical issues. Its emphasis on case studies helps to make one aware of the potential consequences of ones actions. It presents ethical theories that help define what a valid ethical argument looks like. It teaches one to make distinctions and avoid fallacies that are so common when people make decisions. ? It gives one an opportunity to think through, at ones leisure, complex ethical issues that are likely to arise later, when there is no time to think. 4. 5The motivational argument This final argument takes us into ethics the first class on the first day of the semester. Even if there is reason to study ethics, business students see no motivation to study it and do not take the subject seriously.Many students object to ethics class with such animus as it is different from others as they say. The finance or marketing instructor enlightens them, but the ethics instructor preaches to them and some students do not want to be preached to, and so react negatively. Accordingly, it is seen that students say that their finance instructors do not try to convince them to make money as the lecturers know the students want to make money and so they tell them how to make the money as opposed to the ethics lecturers who assume that students want to be ethical and so tell them how to.Some instructors have devised a number of strategies to overcome this issue. They convince students that ethical conduct is smart business, because they can do well by doing good. They integrate discussion of ethical issues into courses students regard as legitimate, such as finance and marketing. They bring in seasoned executives to talk about how ethics is a constant factor in their decision making. 5. 0CONCLUSION In conclusion, study of business ethics as an aca demic discipline is important to ensure that the managers are equipped with the tools and knowledge to undertake the ethical judgment about the organization business operations.This study also enables the organization to work towards achieving its objectives it sets to achieve since the stakeholders who contribute to the organizations success will have more trust in the company to manage their interests in that organization. Even though ethical problems in organizations continue to greatly concern society, organizations, and individuals, the potential impact that organizational culture can have on ethical behavior has not really been explored (Hellreigel et al. , 1989). The challenge of ethical behavior must be met by organizations if they are truly concerned about survival and competitiveness.What is needed in todays complicated times is for more organizations to step forward and operate with strong, positive, and ethical cultures. Organizations have to ensure that their employees know how to deal with ethical issues in their everyday work lives. As a result, when the ethical climate is clear and positive, everyone will know what is expected of them when inevitable ethical dilemmas occur. This can give employees the confidence to be on the lookout for unethical behavior and act with the understanding that what they are doing is considered correct and will be supported by top management and the entire organization.REFERENCES 1. FERRELL, O. C. , FRAEDIRICH, J. & FERRELL, L. (2005). Business Ethics Ethical Decision Making and Cases. Houghton Mifflin Company, U. S. A. 2. Hooker, J. (April 2003). Why Business Ethics? Carnegie Mellon University. 3. http//wpweb2. tepper. cmu. edu/ethics/whybizethics. pdf 4. http//construct. haifa. ac. il/danielp/soc/sims. htm 5. http//changingminds. org/explanations/values/values_morals_ethics. htm 6. Friedman, M (1970), The Social Responsibility of Business Is To Increase Its Profits, New York Times Magazine (September 13). 7. http //en. wikipedia. org/wiki/Meta-ethics