In this report IIC will examine the purpose of ethics in business. It will familiarize itself with the theories of ethical thought such as consequential, deontological and humanist theories. IIC will also establish whether or not accepting bribes as a stimulus to buy in business is considered ethical. Finally, the importance of ethics and social responsibility in regards to business will be applied to IIC and its stakeholders.
The term ethics is defined as “dealing with values relating to human conduct, with respect to the rightness and wrongness of certain actions and to the goodness and badness of the motives and ends of such actions.” (dictionary.com) Due to the fact that ethical behavior is subjective, establishing what is right or wrong in a business situation is not determined by one individual, but by society as a whole. The outcome of most business decisions effect not only the company itself, but all stakeholders involved. Ethics in business entails abiding by the predetermined code of conduct, code of ethics, and the established corporate culture.
There are different theories involved in ethical thought. One such type is called consequential theory which states “acts are judged ethically good or bad based on whether the acts have achieved their desired results.” (Pearson Custom Business Resources, 2010, p.179) This type of theory basically believes that the end justifies the means. The deontological theory states “a person should only engage in acts that he or she could see becoming a universal standard.” (Pearson Custom Business Resources, 2010, p.181) Most codes of ethics are based loosely on this theory. Finally, the humanist theory states “actions are deemed good or bad depending on whether they contribute to improving inherent human capacities such as intelligence, wisdom, and self-restraint.” (Pearson Custom Business Resources, 2010, p.182)
When doing business in various countries and cultures, employees must be careful to adhere to International Industries Corporation’s (IIC) code of ethics. While accepting bribes may be acceptable in some cultures, it violates not only IIC’s code of ethics, but its position on corporate culture as well. Allowing this type of activity to go unpunished will only encourage further such activity. It will also undermine the trust of IIC’s stakeholders. This type of conduct is also in conflict with the Federal Sentencing Guidelines for Organizations (FSGO).
The recent release of two of IIC’s top managers for accepting bribes provides an excellent opportunity to address this and other ethical issues with the remainder of the company. Reinforcing the code of conduct within the company removes any doubt among the employees as to what is considered ethical behavior and what is not. Also, reaffirming the company’s position on ethics and moral conduct makes the employees aware of the consequences of not adhering to its policies. An ethics officer that is designated to monitor the actions of all its employees and assure the company’s compliance is crucial. This office should also offer continuing education in regards to these issues through the use of seminars, workshops, lectures, and conferences on a regular basis. Employees should be aided in understanding these codes and be made responsible for adhering to them. (Galloway Live Chat III, 2010) Employees should also be assured that “whistle blowing” is not only acceptable, but encouraged. If employees are aware of any wrong doing, it is their duty to bring it to the attention of the appropriate authority. As provided by the “Sarbanes-Oxley Act, employers of publicly traded companies are required to provide a confidential internal systems so that employees have a procedure of reporting alleged illegal or unethical auditing and accounting operations in addition to other areas including sexual harassment.” (Pearson Custom Business Resources, 2010, p. 185) The FSGO regulates compliance of this act.
Social responsibility can be defined as “an organizations obligation to maximize its positive impact on stakeholders and to minimize its negative impact.” (Galloway Live Chat III, 2010) A corporation is faced with four areas of interest. These four areas are environmental, consumers, employees, and investors. In order for IIC to protect its business and consumer trust it must act environmentally responsible. IIC can show its responsibility to its consumers by practicing consumerism which is a “type of social activism that protects the rights of consumers in their dealings with businesses.” (Galloway Live Chat III, 2010) IIC has a “responsibility to its employees to not engage in any type of discrimination and to provide a work environment that is safe both physically and socially. Finally, IIC has a responsibility to its investors to not abuse the trust instilled in them which includes, but is not limited to, the firm’s financial resources.” (Galloway Live Chat III, 2010)
There are several schools of social responsibility that IIC should examine while determining its course of action. The profit-oriented school emphasizes that “businesses are distinct organizations in our society whose sole purpose is to increase profits for shareholders.” (Pearson Custom Business Resources, 2010, p. 191) The managerial school argues that “businesses have a number of interest groups or constituents that they must deal with regularly, not just stockholders.” (Pearson Custom Business Resources, 2010, p. 194) There is also the “professional obligation school and the regulation school” (Pearson Custom Business Resources, 2010, p.191) that can be taken into account. Lastly is the “institutional school of social responsibility which emphasizes that businesses have a responsibility to act in a manner that benefits all society.” (Pearson Custom Business Resources, 2010, p.191) This last example is the most widely accepted norm of business practice. It is in fact society as a whole that contributes to IIC’s prosperity. This is closely related to the moral philosophy of utilitarianism due to the fact that they are both concerned with the greatest net gain for all groups involved.
Ethics and social responsibility are an integral part of any business. It is imperative that IIC maintain and strengthen its code of ethics and stand point on social responsibility. Compliance has to start with management and permeate the entire organization. Without a strong stance on ethics and social responsibility, IIC will not only lose valuable employees, but also the acceptance and support of the public and its consumers.
To conclude, IIC has a responsibility to take into account all of the ethical norms and philosophies of today’s society to determine what course of action should be taken now and in the future. It can enhance its code of ethics and its corporate culture to educate its stakeholders regarding what is acceptable behavior and what is not. It can promote these ethical values and make IIC a more trusted and respected organization in the community.
Galloway, M. (2010). Galloway Live Chat III. Retrieved from Colorado Technical University
Online, MGM365-1004A-13, The Legal and Ethical Environment of Business: https://campus.ctuonline.edu/pages/MainFrame.aspx?ContentFrame=/Default.aspx
Pearson Custom Business Resources. (2010). The Legal and Ethical Environment of Business.
New York: Pearson Custom Publishing.