For many years, the ethics and value creation of companies are failure of communication between the theorist and the business practitioner. The theorists suggest that businesses should be run under curtain principles and theories. The practitioners believe that a successful business is based not only on theories but also on practice. “This suggests that the task of the business ethicist is to produce a set of ethical principles that can be both expressed in language accessible to and conveniently applied by an ordinary business person who has no formal philosophical training.” (1) In regards to these principles, people refer to several narratives theories of business ethics: Stockholders theory, stakeholders theory and social contact theory.
A normative theory of business ethics engages the theories and norms with human lives. By translating the philosophical thinking and language, and making it understandable for society, the theory offers people ethical directions for their business actions.
Stockholders theory is also known as The Friedman doctrine that states a company’s only responsibility is to increase the profit. According to the theory, managers of a company have to rights to expand the business without stockholders authorization. In other words, the manager is obligated to follow the directions of the stockholders nevertheless whether it is legal or not. For example, is a stockholders decide to close a successful deal and the manager know is it a wrong decision, hi/she cannot to anything because of lack of responsibilities. “Stockholder theory could point out that employees (including managers), suppliers, and customers negotiate for and autonomously accept wage and benefit packages, purchasing arrangements, and sale...
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...es entirely. All theories are about strategies and profit; how to put business end ethics together, and create value having social responsibilities and We live in a fast growing society and all business norm and theories are just an ethical and legal line that each business should not cross.
Works Cited
Hasnas, John (1998 The normative theories of business ethics: a guide for the perplexed.
Smith, M. (2001). Writing a successful paper. The Trey Research Monthly, 53, 149-150.
The Stakeholder Theory of the Corporation: Concepts, Evidence, and Implications
Thomas Donaldson and Lee E. Preston, The Academy of Management Review, Vol. 20, No. 1 (Jan., 1995), pp. 65-91, Published by: Academy of Management
Article Stable URL: http://www.jstor.org/stable/258887
Freeman, Edwards, (2010). Stakeholders Theory. Retrieved from https://www.youtube.com/watch?v=Ih5IBe1cnQw
In business, creating a culture of ethical behavior and productivity are two of the most important elements in daily operations. There are deferring opinions on how to establish those standards. One standard is universal in which human rights are general and should apply to every human being or having a one-size fits all standard of practice (Hugh, M.C., 2002). For example, an organization could great a set of ethical standards that universal and standard to apply to its members. However, the opposing view is cultural relativism, where the view that all values are meaningful only within specific cultures (Hugh, M.C., 2002). In other words, each culture defines what is right and what is wrong. Applying this to business, an organization can create ethical standards that are specific to their service line and provide specificity to members about their services, behavior, and social
Business ethics is one of the most important aspects of business. It consists of the moral/underlying principles of conduct that must be practice...
Nevertheless, there are some that would disagree with the need for more ethical consideration in business operations. One such proponent of this line of logic is Friedman. Friedman remains firm in his view that business and ethics should be separate. He believes that companies are in business to make money and managers are obligated to maximize profits for the company. It is not only a fiduciary duty, but the manager’s job to increase profits. Friedman (1970) says “allowing ethics to dictate business operations is similar to socialism because shareholders money is being used for the betterment of others.” (p. 84). Essentially, it is redistribution of wealth, which is consequently the foundation of socialism (Friedman, 1970). Subsequently there are some major flaws in Friedman’s logic.
Business ethics are the moral principles that describe the way a business behaves. Because businesses are treated as “persons”, it can be said that the same principles that determine an individual’s actions can also apply to business. Making ethical choices involves distinguishing between right and wrong, and then making the right choice; and while it can be easy to identify unethical business practices, such as using child labor or not paying employees properly, good ethical practice can be harder to define simply because what is deemed right is not always universally accepted. In other words, everyone has a unique moral compass, and can see black and white as different shades of gray. In the face of this, every business holds corporate social responsibility to act fairly for their employees’, stakeholders’, and sometimes even the earth’s sake. However, whether or not the business adheres to this ethical paradigm varies.
“Masters, grant to your slaves justice and fairness, knowing that you too have a Master in heaven” Colossians 4:1 (Dake’s Annontated Reference Bible). Leaders should always treat their employees and fellow business leaders with respect and dignity and should never violate ethical codes of conduct. Christians have a Lord and Master in heaven and should never treat people unethically because our lord and master will judge us for this on Judgment Day. It is important that all people even non-Christians follow universal values, morals and ethical behavior in all business activities. This paper will talk about three different secular views of business ethics, why it is important to practice common standards in the business world.
Gallagher, S. A. 2005. Strategic response to Friedman’s critique of business ethics. Journal of Business Strategy, 26(6), 55-60.
The modern theory of the firm, which is central to finance and corporate law, views the corporation as a of contracts among the various corporate constituencies. Upon this foundation, finance theory and corporate law postulate shareholder wealth as the objective of the firm. Research in business ethics has largely ignored this contracts theory of the firm except to reject the financial-legal model as normatively inadequate. Philosophers generally bring philosophical theories of ethics to bear on problems of business, and they regard the contractual theory of the firm primarily as a subject for criticism using the resources of philosophical ethics. 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.
The concept of business ethics refers to a set of guiding principles that encourage individuals in an organization to make decisions based on the company’s stated beliefs and attitudes toward business practices within its industry (Lisa McQuerrey., 2016). Ethical and Unethical business decisions have long been a predicament encountered by organisations, these practices are concerned with how the companies interact with the global business world, and to their one-on-one dealings with individuals (Garry Crystal, 2016.) The concept of ethics and social responsibility emerged into the business world in the early 1970s after the end of World War I, saw these organisations become more profit driven resulting in negative impacts on society at large.
Ethics in business is a highly important concept, as it can affect a company’s profits, salaries paid to employees and CEOs, and public opinion, among many other aspects of a business. Ethics can be enforced by company policies and guidelines, set a precedent when a company is faced with an important decision, and are also evolving thanks to new technology and situations that arise due to technology usage. Businesses have a duty to maintain their ethical responsibilities and also to help their employees enforce these responsibilities in and out of the workplace. However, ethics and the foundation for them are not always black and white. There are many different ethical theories, however Utilitarianism, Kant’s Deontological ethics, and Virtue ethics are three of the most well known theories in existence. Each theory is distinct in that it has a different quality used to determine ethicality and allows for a person to choose which system of ethics works best with both the situation and his or her personal ethical preferences.
Lazonick, W., & O'Sullivan, M. (2000). Maximizing shareholder value: a new ideology for corporate governance. Economy and Society, 29(1), 13-35. Retrieved from http://www.uml.edu/centers/cic/Research/Lazonick_Research/Older_Research/Business_Institutions/maximizing shareholder value.pdf
Ethical theories are a way of finding solutions to ethical dilemmas using moral reasoning or moral character. The overall classification of ethical theories involves finding a resolution to ethical problems that are not necessarily answered by laws or principles already in place but that achieve justice and allow for individual rights. There are many different ethical theories and each takes a different approach as to the process in which they find a resolution. Ethical actions are those that increase prosperity, but ethics in business is not only focused on actions, it can also involve consequences of actions and a person’s own moral character.
In the business world there are many fundamental aspects and situations that can lead to several issues. In order to find an optimal and professional solution, business decision makers need to apply moral and ethical standards. And it is at that moment in which business ethics perform its role. Business ethics, which is in charge of examine how companies and individuals should act in business situations, is very essential in order to reach a common agreement and to work within the laws of business and solve an arisen dilemma. Working of the hand of ethical business companies, employees, investors, directors, and even individual officers can be beneficiated and obtain most favorable outcomes.
OLLIER-MALATERRE, ARIANE; ROTHBARD, NANCY P.; BERG, JUSTIN M. Academy of Management Review (Oct2013), Vol. 38 Issue 4
As a student interested in one day starting a firm, learning the business models and its advantage is prepping me for the real world. Those models like the SWOT Analysis are bringing me closer to my dream of running my own business. Professor Sheldon’s experience in the business atmosphere has opened my mind to the experience of running an enterprise. This has helped me slowly develop my plans on what nature of business I want to enter and the stakeholders I’m obligated too. Apart from obligation I am also subjected to the laws of the land and a social responsibility. I must consider ethical behaviour in doing business as a lack of it has negative effects. Look at Enron for example, where the firm lied to their stakeholders just to keep stock prices up and later crashed the company. This resulted in many investors losing their pension and savings and now the board is serving long jail
This course arises with the aim to develop competences and skills to enhance the future career prospects of university students. This module has had a positive impact in different personal development competences, in communication, self- management, self-confidence and the ability to learn effectively in different learning styles.