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importance of ethics in organizations
what is the importance of ethics in an organization
importance of ethic in business
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“Each decision that a business manager makes involves not only a personal decision, but also a decision on behalf of, and in the name of, an organization that exists with a particular social, legal, and political environment ” (Hartman, DesJardins, & MacDonald, 2014, p.15). In the article, “An Empirical Investigation on Firms’ Proactive and Passive Motivation for Bribery in China” Xiaoyu Zhou, Yi Han, and Rui Wang (2013) seek to explain why companies in the manner of doing daily business extend to conduct business through bribery. After reading the article, I found the findings substantiate the lack of ethical decision made by individuals, government, and management in China’s corporations through the data retrieved on bribery from the World Business Environment Survey to explain why businesses are motivated by bribery as a way of managing a business.
New businesses entering a developing market may find it difficult to establish the firm validly ethical due to the environmental resources and governmental influence. In China, many businesses are limited in acquiring resources; therefore it is necessary to obtain goods through any means necessary. The resource dependence theory and the anomie theory seek to rationalize why firms resort to bribery while attempting to secure resources and by the local administrative factor. “The resource dependence theory proposes that firms make strategies in order to seek resources in the environment; while the anomie theory argues that the unethical firm behaviors are actually fostered by the local institutional environment” Zhou et al., 2013, p. 461.
If a company cannot obtain the necessary resources to operate legitimately than for the firm to continue to operating, oftentimes the compan...
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...hat ethical decision making can flourish” (Hartman, et al., 2014, p. 162).
Zhou et al. could have gone into more detail in how management could cultivate employees into leaders and how managers can encourage change within a firm. I would explain why leadership and employee participation and involvement are crucial to creating change. Zhou et al. identified the motivation behind the bribery, but didn’t offer any solutions on how to initiate the change.
Works Cited
Hartman, L. P., DesJardins, J., & MacDonald, C. (2014). Business ethics: Decision making for personal integrity & social responsibility (3rd ed.). New York, NY: McGraw-Hill.Shen, K.F. (2011).
Zhou, X., Han, Y., & Wang R. (2013). An empirical investigation on firms’ proactive and passive motivation for bribery in China. Journal of Business Ethics, 118, 461-472. doi: 10.1007/s10551-012-1596-8
The movie “Glengarry Glen Ross” presented a series of ethical dilemmas that surround a group of salesmen working for a real estate company. The value of business ethics was clearly undermined and ignored in the movie as the salesmen find alternatives to keep their jobs. The movie is very effective in illustrating how unethical business practices can easily exist in the business world. Most of the time, unethical business practices remain strong in the business world because of the culture that exists within companies. In this film, the sudden demands from management forced employees to become irrational and commit unethical business practices. In fear of losing their jobs, employees were pressured to increase sales despite possible ethical ramifications. From the film, it is right to conclude that a business transaction should only be executed after all legal and ethical ramifications have been considered; and also if it will be determined legal and ethical to society.
Anti-bribery laws in the U.S. were established to prevent the rampant corruption exhibited in the Airbus case study. Similar anti-corruption laws do not exist in many of the host countries the U.S. does business with. Host county’s laws and regulations take on different forms especially when power, money and politics are involved, manipulating or creating a new set of rules to benefit their own selfish needs. Savvy sales negotiators, like those at Airbus, seek opportunities through loop holes, off shore accounts and large sums of bribery money, to entice country officials or others with the authority to make purchases to commit to Airbus. A more uniform worldwide approach to international laws needs to be adapted, implemented and more importantly enforced, so all companies involved can conduct fair business practices under the same set of rules.
Are businesses in corporate America making it harder for the American public to trust them with all the recent scandals going on? Corruptions are everywhere and especially in businesses, but are these legal or are they ethical problems corporate America has? Bruce Frohnen, Leo Clarke, and Jeffrey L. Seglin believe it may just be a little bit of both. Frohnen and Clarke represent their belief that the scandals in corporate America are ethical problems. On the other hand, Jeffrey L. Seglin argues that the problems in American businesses are a combination of ethical and legal problems. The ideas of ethical problems in corporate America are illustrated differently in both Frohnen and Clarke’s essay and Seglin’s essay.
With the development of international business, more and more companies get large profits in multinational cooperation, also led to a serious corruption problem at the same time. One of the most famous is the Siemens scandal. Although there are many laws to stop transnational bribery, many companies have to rely on bribes to win contracts. Some managers consider the social resources are limited and the distribution exist competition. A bribe is the easy way to obtain the resources that the companies original may not get. Furthermore, some of the company 's products have serious quality problem, the leaders of production will bribe prosecutors. Then the products into the market smoothly, however, this behavior will lead to unfair competition
Drucker (2009), mentions that “business ethics” very origin is political rather than in ethics (p. 23). “It expresses a belief that the responsibility which business and the business executive have, precisely because they have social impact, must determine ethics-and this is a political rather than an ethical imperative” (Drucker, p.23). Lastly, we can mention the unethical practices like bribery, hiring minors or taking advantage of the less fortunate. Corruption is prominent in the Asian market due to a lot of family-owned business groups. Corruption is generally defined as ‘behavior which deviates from the formal duties of a public role because private-regarding (private clique, or personal close family) pecuniary or status gains; or violates rules against the exercise of certain types of private- regarding influence’ (Nye 1967, p. 419). (Rama, 2011 p.505) (Nye, 1967, p. 419; Rama, 2011, p. 505). These family group organizations could influence the government decisions and the economy by not allowing or delaying approval of a contract or business license. Good
Professor Nichols. “The list of countries that have been politically or economically crippled by corruption remains to develop, and businesses with continuing benefits abroad will ultimately be harmed by any plans that include bribery.”
Ethical behavior is behavior that a person considers to be appropriate. A person’s moral principals are shaped from birth, and developed overtime throughout the person’s life. There are many factors that can influence what a person believes whats is right, or what is wrong. Some factors are a person’s family, religious beliefs, culture, and experiences. In business it is of great importance for an employee to understand how to act ethically to prevent a company from being sued, and receiving criticism from the public while bringing in profits for the company. (Mallor, Barnes, Bowers, & Langvardt, 2010) Business ethics is when ethical behavior is applied in an business environment, or by a business. There are many situations that can arise in which a person is experiencing an ethical dilemma. They have to choose between standing by their own personal ethical standards or to comply with their companies ethical standards. In some instances some have to choose whether to serve their own personal interests, or the interest of the company. In this essay I will be examining the financial events surrounding Bernie Madoff, and the events surrounding Enron.
In the business industry, there are ethical dilemmas that occur on a daily basis. Some ethical dilemma can include stealing or even having fraudulent documents in order to get an unfair advantage within the organization. Another ethical dilemma that has been brought into the light is bribery. What makes bribery unique is that in various parts of the world, bribery has become an acceptable behavior whereas other parts of the world people would consider that as unethical behavior. In order to understand what is acceptable or not when trying to bribe public officials, we must understand the principles of what is considered to be ethical or unethical.
Seawell, Buie 2010, ‘The Content and Practice of Business Ethics’, Good Business, pp. 2-18, viewed 22 October 2013, .
Turrow, Scott (1985) What’s Wrong with Bribery in Journal of Business Ethics, D. Reidel Publishing Company (Boston), pp. 249-251.
Bribery is wrong, and it would be almost instinctive to point at the benefits of impartially functioning public servants and incorrupt corporations to our democratic society as justification. However, in this imperfect world where bribery is rife in varying degrees, is it possible to express this notion convincingly? Certainly 'because the UK Bribery Act says so' is far less persuasive to a council planning office in Shanghai than in London, and indeed in compliance with section 7 of the Bribery Act 2010 which relates to commercial offences, it is essential that this question is engaged with on a corporate scale and without assertion through dogma. Accordingly, this essay will argue that elements wrong with bribery are inclusive of both moral and economic considerations. Moreover, in conjunction with international mandates, advent of aggressive legislation such as that of the UK Bribery Act 2010 is representative of global efforts to eliminate bribery. Hence, it follows that bribery can never be considered a normal part of business because it is economically unsustainable in the long term.
In many circumstances, employees’ behaviors are likely to follow their leader. Enron’s leadership has been extremely influential due to exemplified charismatic. For example, Heffrey Skilling and Kenneth Lay, CFO and one of executive member in Enron, greatly encourage employees to follow their lead. Their incompetence accounting profession directly affects lover level of employees. Eventually, those manipulating accounting activities affect company collapse. Once leadership has done unethical professional accounting behaviors, unethical acts become accepted. Employees have many reasons for remaining quiet. While Enron still have ethical internal rules, when leadership in Enron did not abide and did not provide corresponding example of employees to follow (Prentice 2003, p. 417). Which eventually make Enron’s become one of the largest corporate scandal frauds.
The term “ethical business” is seen, by many people, as an oxymoron. This is because a business’s main objective is to make as much money as possible. Making the most money possible, however, can often lead to unethical actions. Companies like Enron, WorldCom, and Satyam have been the posterchildren for how corporations’ greed lead to unethical practices. In recent times however, companies have been accused of being unethical based on, not how they manage their finances, but on how they treat the society that they operate in. People have started to realize that the damage companies have been doing to the world around them is more impactful and far worse than any financial fraud that these companies might be engaging in. Events like the BP oil
Over the last few years, the issue of corruption--the abuse of public office for private gain--has attracted renewed interest, both among academics and policymakers. There are a number of reasons why this topic has come under recent inspection. Corruption scandals have toppled governments in both major industrial countries and developing countries. In the transition countries, the shift from command economies to free market economies has created massive opportunities for the appropriation of rents, excessive profits, and has often been accompanied by a change from a well-organized system of corruption to a more chaotic and deleterious one. With the end of the cold war, donor countries have placed less emphasis on political considerations in allocating foreign aid among developing countries and have paid more attention to cases in which aid funds have been misused and have not reached the poor. And slow economic growth has persisted in many countries with malfunctioning institutions. This renewed interest has led to a new flurry of empirical research on the causes and consequences of corruption.
The existence of bribery and unethical behavior is rampant in the world market and may not change overnight. The question of bribery has been distilled in business literature as a question of ethics. In this situation at the airport with the customs officer, it is important to distinguish between business ethics and personal ethics. In a business ethics situation, the Foreign Corruption Practices Act would prohibit offering any bribe to the custom office – for example to free a shipment of goods that was lost in red tape (Pitman & Sanford, 2006). Most companies also have policies against bribery as well. In this situation, however the main issue at hand is that of personal ethics. When in a situation where your company is unknown and there is no business being conducted, normal business ethics and laws (including FCPA) do not apply only personal ethical standards.