In particular, stakeholder theory, which stresses the importance of all groups that affect or are affected by a firm, has been proposed as a more adequate theory of the firm for studying business ethics. An important benefit of business ethics research conducted within such a framework would be a narrowing of the gulf between business ethics and the fields of financial economics and corporate law. Business ethics is widely dismissed as irrelevant by researchers in these fields because of its failure to recognize the existing financial and legal structures of the corporation, which are built largely on a contractual foundation. Hence, a common framework could increase the relevance of business ethics research and create a mutually beneficial dialogue. As a framework for identifying and analyzing many common business ethics problems, the contractual theory focuses our attention on the need to provide adequate safeguards for each constituency's interests.
There are firms that hire consultants and ethic experts that will teach corporate ethics, so that they can ensure that employees will behave in an ethical manner. We will see that what one culture may consider moral may not be accepted by another country as being moral (Satterlee, 2009). Between cultures, ethical differences can be complex and vast. The author Satterlee gives us the following example in “Cross Border Commerce”; he states that ethical differences can be seen in the... ... middle of paper ... ... expand globally and ethical conduct of the professionals and employees is important because the cultural diversity that is associated with their expansion(s) can undermine shared cultural and ethical values. Understanding of other cultures and recognizing the differences help, however, it may not be sufficient in providing sustainable guidelines of proper ethical behavior.
Ethics are the values of a person’s sense of feeling of what is good or bad or what the law requires them to do Profit is the main backbone of a business .If it does not make profits it will fail and not survive. Ethics and profits are mutual for success. Ethics therefore plays an essential role in customer relationship management (Gundlach & Murphy, 1993; Ruiz, 2005). As with other professional disciplines, understanding and upholding ethics is very important in the accounting field. Small-business investors and leaders consistently rely on the ethical collection and delivery of financial information, and are sometimes placed at risk if accounting ethics are not preserved.
Management theories closely related to the business structure of Bolt will be assessed in order to identify potential solutions to the problem. Moreover, relevant recommendations regarding actions the company can take to overcome the issue will be considered. Definition of Issue An ethical issue is present in a situation when the actions of a person or organisation may harm or benefit others. (Jones, 1991) The problem that Bolt faces is that a section head has breached managerial ethics by using company assets for his own personal gain. This breach has resulted in the formation of an ethical issue as it has caused the corporate social responsibility of the business to be in disrepute.
Ethics can be described as: "the activity of examining one's moral standards or the moral standards of a society, and asking how these standards apply to our lives" (11). The application of ethics in business is generally perceived as the evaluation of individual and collective moral standards, a reflection of societal morality, and then the determination of business decisions that are not only based on the efficacy of business operations, but also on these moral standards. The problem that many corporations perceive when pursuing the application of ethics in business is that ethical choices are not always the most sound business decisions. For example, when the pharmaceutical corporatio... ... middle of paper ... ...issue as a whole. Individuals have a moral responsibility to take ethical action, and there is no way of denying that corporations are made up of individuals attempting to make both business and ethical determinations.
INTRODUCTION Ethics is concerned with the study of morality and the application of reason to elucidate specific rules and principles that determine right and wrong for a given situation (Crane & Matten, 2010). Since law does not necessarily cover the morality of many controversial issues, moral reflection ought to be performed on any action, regardless of its lawfulness. The growing power of business in today’s society has enabled businesses to significantly impact the world. Hence, business ethics is highly relevant as it could determine whether businesses contribute or cause harm to the society at large. Using ethical theories to guide moral reflection, business ethics can help businesses avoid scandalous conduct that could harm the society.
Ethical issues related to ownership include conflicts between manager’s duties to the owners and their own interests, also separation of ownership and control of business. Financial issue includes, for example, the accuracy of reported financial documents. Ethical issues can acquire between manages and employees, then employees are asked to carry out assignments they consider unethical. Consumers and marketing issues are related to providing safe desired products for a fear price and not harming people and an environment. Accountants also face ethical dilemma, they have to deal with competition advertising commission.
In this level, societal, organizational, and industry culture determine the decision-making process. The societal values shape the manner in which ethical decisions are made at both the organization and individual levels. On the other hand, the industry culture defines the ethical patterns of a particular organization. Though a company may be operating independently, the interactions within the industry set a pattern of certain behaviors that affects the individual and corporation ethics. For instance, intense competition may push an organization into making a morally wrong decision to heighten revenues and stay competitive.
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. In Bruce Frohnen and Leo Clarke’s essay, "Scandal in Corporate America: An Ethical, Not a Legal, Problem" they discuss their views of American businesses and the little honesty that these businesses have. They claim how important honesty is within businesses and how it will help our public’s well-being and corporate America. They view American business officials to be greedy and many of their jobs just consist of helping businesses find their way around the laws.
They follow step by step every illegal activity and try to examine alternative actions, if the participants (owners and auditors) were aware of the proposed ethical framework. As a result the reader of this article can focus on the practical aspect of the ethical theories inside the organizations. In conclusion, the above ethical theories can be used by managers and auditors as a useful tool in the decision-making process in order to avoid future financial scandals. These theories might not be an answer to all the ethical dilemmas that professionals face, but an ethical development in this field is required so that trust and confidence in the financial markets can be reinstated.