Business Ethics and Its Importance Today Essay (Critical Writing)

What is business ethics?

1. Business ethics is the branch of ethics that deals with the application of ethical principles to make the right business decisions (Smith, Palazzo, & Bhattacharya, 2010). It involves differentiating between right and wrong to make the right business decisions.
2. Business ethics enables organizations to maximize profits while minimizing the negative impacts on the society (Griseri & Seppala, 2010). It enables businesses to appropriately influence power and society, makes organizations to be socially responsible, addresses the society’s demands, provides addresses the potential of inflicting harm, and facilitates ethical interactions.
3. Business ethics differs from personal ethics because it is about elucidating right from wrong under different business situations and activities using principles of business ethics in decision making (Trevino & Nelson, 2010). Personal ethics is about the moral values and beliefs of an individual that are used to address the situation at a personal level.

Why is Business Ethics Important today?

1. It is difficult to behave ethically in business because of situations that arise such as conflict of interest, which are difficult to ignore. For instance, a firm you are working for buys clothes from Bangladesh factory that uses child labor and does not pay the workers.
2. Ethics is about the positive aspects of behavior while law is concerned with the negative behavior. Ethics comes first before the law, which comes later. Law is universal and enforceable within the accepted jurisdiction while ethics cannot be forced on an individual.
3. Globalization is the process that enables the removal of territorial boundaries or restrictions to allow for the flow of economic, political activities, and social activities and leads to ‘deterritorialization’.
4. The rapid improvement and use of technology caused a decrease in the cost of doing business due to a decrease in transportation costs, better, and cheaper communication methods. The removal of capital flow restrictions, barriers to trade and investment, free markets, and trade liberalization.
5. Ethical challenges of globalization include intensification of ethical conflicts, different ethical codes of conduct, ability to make the right decisions on the type of products to offer.
6. Sustainable development is the development that addresses the needs of the people without compromising the future generations’ abilities to sustain themselves (Sparks & Pan, 2010). Examples include the sustainable exploitation of natural resources such as trees for timber
7. The best practices include reporting and disclosure to stakeholders on a firm’s performance. Other practices include shareholder engagement through collaborations. Use of efficient environmental management systems.
8. ‘Race to the Bottom’ is a term used to describe a situation where firms show a trend of investing in environments with weak legislation on labor laws and other environmental issues leading to weak sustainability (Velasquez & Velazquez, 2002). Examples are those companies that invest in countries such as Bangladesh that have weak business practices.
9. The Vendor Code of Conduct (VCC) was established to enable those in authority to address the problems associated with the lack of business ethics and best practices among different organizations that seemed to breach the best practices in business (Scholte, 2005). Examples include those institutions that have poor working conditions and other problems associated with poor business ethics.
10. The main elements of the VCC include a factory monitoring programs that were used to evaluate the commitment of organizations to the vendor code of conduct. Also, VCC was defined by the partnerships of local governments, trade unions, suppliers, and civil society groups.

References

Griseri, P., & Seppala, N. (2010). Business ethics and corporate social responsibility. New York: John Wiley & Sons. Web.

Scholte, J. A. (2005). Globalization: A critical introduction. New York: Palgrave Macmillan. Web.

Smith, N. C., Palazzo, G., & Bhattacharya, C. B. (2010). Marketing’s consequences: Stakeholder marketing and supply chain corporate social responsibility issues. Business Ethics Quarterly, 20(04), 617-641. Web.

Sparks, J. R., & Pan, Y. (2010). Ethical judgments in business ethics research: Definition, and research agenda. Journal of Business Ethics, 91(3), 405-418. Web.

Trevino, L. K., & Nelson, K. A. (2010). Managing business ethics. New York: John Wiley & Sons. Web.

Velasquez, M. G., & Velazquez, M. (2002). Business ethics: Concepts and cases. Upper Saddle River, NJ: Prentice Hall. Web.