Business ethics is concerned with moral philosophy, truth, Consultants fairness and justice pertains to the code that guides the professional conduct of aspects such as the expectations of society and customers, social responsibility, consumer autonomy and corporate behavior in global and domestic markets (Rasmusse, 2005).
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Corporate social responsibilities mean those activities that a business does to improve the living conditions of the society that the business is conducted. With globalization and increase in people awareness of their rights, there have been calls for conducting business ethically.
Pablo, in the “Journal of Business Ethics applauds the ethical behaviors within an organization; ethics in business means conducting a business in socially, economically, politically and environmentally friendly manner (Pablo, 2008). This paper discusses the relationship between law and ethical business behavior.
The relationship between law and ethical behavior
Ethics are moral standards code of conduct that a person or a company uphold; law on the other hand represent the legal pathway that an organization should follow to be operating within a certain economy. Just like business law, codes of ethics are not international but vary between individuals and companies.
People, who uphold ethical reasoning in their actions, do not fail into transgression; they neither find themselves in the wrong side of the law. People who uphold high respect for their ethics not only do the right thing and have peace of mind; but also are also able to transform episodes of temptations to their benefit.
They are also able to influence other people to an acceptable behavior. Organizations code of ethics defines how an organization responds to internal or external stimulus. In most organizations, they are in blue prints and an internal policy.
They form part of organizational training needs. Organizations that uphold high respects for their code of ethics maintain good internal and external relations with their stakeholders (Kingsolver, 2008).
Laws that operate in an economy are supposed to offer the pathway and directions of the morally and ethically accepted behavior that businesses are supposed to uphold; this does not imply that all ethical behavior have a legal backing.
According to utilitarian theory of ethics, it puts weight on the individual who is undertaking a certain duty; the same way with laws, despite some laws focus a industry, they are applicable at an individual level, individual may mean natural or artificial person (Moon, 2001).
The focus here is not the consequences like the case of Consequentialism theory, but on the people who are involved. It is based on the motive or the character portrayed by the person who has made a certain action.
The most important thing in this theory is the development of the desired right virtues that an individual should have at all times. It follows the same approach as legal laws and rights that a countries constitution offers to its citizens. The virtues should dictate/influence the kind of decision that a company takes.
The pleasure that a certain action is going to give, and to the number of people who are going to get the pleasure is the main concern; If an action is thought to bring more pleasure to a large group, this is the correct thing to do given the available alternatives.
The value and the worthiness of the action is the most important thing. This is a theory where majority rules. This theory puts more weight on the inner feeling of the individual; the physical products are not of great essence. It is seen as the theory of quality and not quantity (Darwall, 2002).
Another ethics theory is called norm theory; this means conducting the business in a way that the greatest majority would accept and find normal. If somebody or a company is doing something, then the entire population needs to be comfortable with the actions/decisions and the outcomes of the decisions made.
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This theory places some relevance to the culture that a certain society holds; the business should be in line with the culture of the society. This will determine the success of the business. The set of beliefs and the way people do things is of importance to the entire performance of the business.
If the society believes that doing something is right, then a wise investor is the one who does things in line with this belief. He should at all times ensure that the business is in line with the culture. The approach taken by norm ethics theory is similar with the approach taken by laws of a country (Dobson, 1997).
Can illegal behavior possibly be ethical?
There cannot be right answer to the above question; the answer is always subjective to the person who is discussing and the angle at which he or she finds things; the answer is entirely subjective since ethics is a personal attribute that is special and varies with individuals.
The situation of the matter can also lead to ethical actions that are illegal. For example in the case of a country that has political conflicts, that hinders the importation of medication into the country, yet the population is suffering; if in any case, someone decides to smuggle in medication, then the person has acted ethically.
When smuggling the medication, he has the aim of assisting the population that is ethically accepted. On the other hand, smuggling of whichever nature is illegal and punishable by law.
Another example that can assist in expanding the fact that ethical behavior can be illegal is Smuggling refugees out of war-stricken areas; the smuggler is looking forward at assisting people who might probably die, however the fact that he is assisting people with no legal permission to get to another country makes the deal illegal.
In politics depending with where a certain person stands, the issue can also be seen as ethical yet illegal; for example an assassination of malevolent dictators, may be ethical from the angle of the assassinators while its unethical and unlawful on the side of supporters.
There are sometimes that some ethical behavior has no legal baking, for example if an investor wants to set up a pork butchery and goes ahead to start one in a Muslim society, the business is more likely to fail on the basis that the residents will see it as unethical and against their cultural and religious believes.
This is because the norm of the religion, which happens to go in line with their culture, does not consider the business as ethical; however the above act is legal and acceptable (Jones, Parker & Bos, 2005).
Examples of companies with strong corporate social responsibilities functions
Mitsubishi is an international company that is respected for its value of corporate social responsibilities programs.
The company established a full office to deal with corporate citizenship in April 2004; the office is called Corporate Citizenship Promotion Office: the office was given the mandate of enacting policies that the internal business a chance to improve its processes so as it reduces any adverse effect on the people. The office operates under an acronym called STEP, which means:
S: Support for the next generation: the focus is on developing young people to improve their future
T: Traffic safety: the company has traffic rules training programs where it teaches drivers, potential drivers and schoolchildren on how to be safe; in line with safety, the company makes reliable vehicles
E: Environmental preservation; the company has embarked on some environmental conservation policies and activities
P: Participation in local communities: the company has resources set aside to address some needs in the community like health promotions, schools buildings and stocking, promotion of games among others.
Another company respected for its effective CSR programs is Toyota motor company: the company realizes that its success is dependent on the loyalty that they get from their customers, one of the ways of ensuring that they get customers attention and loyalty to the company eventually develop.
The responsibilities that the company has engaged in include, building of medical centers and hospitals, building schools, scholarships to students and charity work.
An example of this area the numerous projects that the company is undertaking in Kenya, Africa they include; During the tree planting season in Mau forest, Toyota Kenya played a major role in offering sponsorship.
It has been participated actively in the ongoing companies to eradicate poverty. In doing so, it has offered many young Kenyan in accessing mechanic training at an affordable rate.
Emirates Airline Corporation is another international company that is respected for its respect for corporate social responsibilities; the company embarks on societal improvement programs like sponsoring sports, rallies and protection of environments activities. This is in the effort of creating a good repo with customers across the globe (Goodman, 2009).
A corporate social responsibility costs a company some fortune, the company have to pay for the expenditure and expect nothing more that good business environment creation.
However, businesses with good corporate social responsibilities benefit in the following ways, when a business is ethical, then ethical programs start internally where employees who are respected by their employer produce more effectively and highly than those who are not respected.
An organization thus gains high efficiency and effectiveness in its processes. From the external angle, the business develops good relations with its customers. When there are good relations, there is customer loyalty; loyalty of customer is a strong marketing and competitive advantage tool that leads to increased business.
The close relationship between customers and businesses as created by corporate social responsibilities programs makes businesses mitigate strategic risks; they are more assured that they will make it in the fiancé business environments of current business world (Duska, 1999).
Business ethics refers to conducting business in socially, economically and politically acceptable manner. It aims at developing good internal and external relations; they have close link with laws of a country but in some instances, it is possible to have an ethical action being unlawful.
Ethically conducted business benefit an increased competitiveness and customer loyalty as well as reduced business strategic risks. For a business to have ethics in its production, it should start by developing a code of conducted to be adhered by all personnel’s in the organization, training employees on ethical codes of conducts and reviewing the ethical codes with time.
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Dobson, J. (1997). Finance Ethics: The Rationality of Virtue. New York: Rowman & Littlefield Publishers, Inc.
Duska, R. (1999). Employee Rights. Oxford: Blackwell.
Goodman, C. (2009). Consequences of Compassion: An interpretation and Defense of Buddhist Ethics. Oxford: Oxford University Press.
Jones, C., Parker, M., & Bos, R. (2005). For Business Ethics : A Critical Text. London: Routledge.
Kingsolver, A. (2008). Capitalism. Encyclopedia of Race and Racism. Detroit: Macmillan.
Moon, C. Et al.(2001). Business Ethics. London: The Economist.
Pablo, R. et al.(2008). Business Ethics Journal Rankings as Perceived by Business Ethics Scholars. Journal of Business Ethics 95(2), pp. 227-237.
Rasmussen, L. (2005). Ethics expertise: history, contemporary perspectives, and applications. Netherlands: Springer.