Business ethics is a term that has been widely debated for centuries. The notion of applying ethics to a business situation traditionally has been viewed as a contradiction. This is because ethics are really only applicable to individuals and not to innate entities such as businesses (Friedman, 1970). Despite this fact, the prospect of applying ethics to business has been attempted at several sociological eras, including the current one.
One of the few researchers to actively support a universal business code of ethics was Alahmad (2010). He suggested that business ethics are necessary and that they are legitimate, even though there currently is not a universal code of ethics for businesses. The solution that he presented was to utilize universal ethical values that are shared by most ethnic and cultural groups. The ethics that he presented were “honesty, tell the truth no matter what, respect, punctuality, not judgmental, just, humble, and dignity” (Alahmad, 2010).
While these ethical values have social value, it is difficult for most business researchers and professionals to support a business code of ethics like this one, as they conflict with the primary goals of running a business, which include protecting trade secrets, gaining a competitive advantage and making a profit for shareholders. It is because of these reasons why many business experts and researchers have concluded that business ethics are not logical, and that business behavior needs to be guided by factors that do make sense for the business model.
This point of departure from Alahmad was shared by a number of business experts including Friedman (1970). Friedman suggested that the term “business ethics” referred to something previously known as “social responsibility” (Friedman, 1970). Social responsibility, when applied to a business, indicated that the business has a responsibility to do what is best for society. This means that employees within a company would be acting ethically if they utilized resources from the company without authorization to support social advancements or improvements, such as donating company money to a homeless shelter without prior approval. Friedman clearly stated that this practice, while seeming to support social responsibilities, would actually be a kind to stealing money from stakeholders within the company, such as employees, the owner and shareholders (Friedman, 1970). The question then became, “is stealing from the company less ethical than failing to support social improvement?”
Murphy (2009) also held a similar view on the relevance of social responsibility in the business realm. Here Murphy indicated that a business does have a number of responsibilities that it has to fulfill; however, these responsibilities do not extend to society in general, but rather to specific aspects of society. For example, businesses have legal responsibilities that restrict how they can operate their businesses (Murphy, 2009), as well as professional responsibilities that restrict what strategies and procedures can be used by the professional to make a profit. This prevents business employees from engaging in what can be considered to be unethical behaviors, such as using coercion as a business practice, stealing money from their clients or engaging in business practices that they do not have the appropriate training or licensure for, such as a practicing medicine without a medical license.
Finally, Drucker’s position can be used to round out the discussion on the practicality of business ethics. Like Friedman, he believed that business ethics was an illegitimate concept as a business cannot act ethically as it is an innate entity that cannot judge morality (Drucker). Furthermore, he presented that business ethics are instead, a social trend that is intended to interfere with the free market system and a complication in the processes of business (Drucker).
Business ethics indicate that companies have a social responsibility. The legitimacy of this responsibility, however, is a debatable point. While Alahmad indicated that universal ethical codes of honesty, justness, humbleness and respect (Alahmad, 2010) can be applied legitimately to businesses around the world; Drucker, Murphy and Friedman all questioned the validity of attaching anamorphic characteristics, such as moral and social judgment and responsibilities, to an innate entity. This is not to say that they advocated unethical behavior by company employees or owners, but rather they presented a more logical way to manage their behaviors through the use of laws and through the utilization of professional codes of conduct (Murphy, 2009).
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