Introduction
Ethical behavior in the business world is a relative topic and strong ethics are an absolute necessity for a successful business. Running the business ethically involves a combination of two core factors namely, satisfying stakeholders and enlightened self-interest which apparently allows and even motivates businesses to strive towards both goals. It is important for professionals in businesses to use ideas and models by making the correct ethical choices.
Main text
The downfall of Enron provides substantial proof of the negative result of unethical behavior. For many years, Enron worked hard to satisfy one of its goals of increasing shareholder value. In the process, Enron did an average job of serving the common good, and did not satisfy all of the numerous stakeholders it affected. Whilst some workers were very well salaried, others labored in dangerous circumstances. Its ultimate failure was in reporting over ratings, instead of the actual financial situations, thereby raising its stock price but in the process losing its future integrity.
When the general public discovered these offenses of Enron, there was an immediate lack of trust which resulted in loss of business customers and consequently economic recognition, all due to its unethical behavior of dishonesty and selfishness. If Enron had ethically and honestly revealed its financial conditions to the general public all along, the enormous economic failure could have been avoided. Thus we see how unethical behavior in business resulted in the failure of the firm.
Another famous company that lost its business and credibility due to unethical practices is WorldCom. Financial directors at WorldCom used different techniques of concealing expenditures for more than two years between the years 2000 and 2002. They not only postponed the exposure of some expenses but also unethically and dishonestly misused other expenses and reports to falsely imply to the financiers that the company was growing when it actually was going through secretly difficult and unprofitable times.
The lawyers of the ‘Securities and Exchange Commission (SEC) filed civil fraud allegations against WorldCom in June 2002, which were later estimated at more than nine billion USD worth of bookkeeping miscalculations. The Justice Department has filed criminal charges against numerous managers of the corporation among which four have already been appealed guilty.
These corruption scandals by some of the country’s corporate leading companies have placed the attention on the importance of upper-division (330-400 level) courses on Ethics which will help and enable the students to prepare for professional careers ethically. Ethics training in colleges is seen as an effective means of providing potential business professionals with good moral conduct and at the same time preparing them to make appropriate ethical decisions at work. Upper-division Ethics courses are also is important at the college level because they provide the students with a set of morals that they can ultimately utilize at the workplace.
A classroom focus on ethical values would enable the students to recognize the issues and choices in particular ethical situations consequently discussing and concluding the correct means and approach as to how one should go about making an ethical decision. The goal for students would then be to learn to study circumstances by keeping in mind the general expectations of the public or the stakeholders of a company and then arriving at the right judgments or decisions that would be ethical as well as profitable to the company. This would obviously involve the study of different cases of fraud and unethical behaviors of the many companies.
Besides this, the courses would also include the case study of companies that have benefited greatly by adopting ethical behaviors at the workplace.
An excellent example is given by Sheridan (1996). A famous American corporation, the ‘Ford Motor Company’, in the early 20th century was not able to sell enough cars. The director Henry Ford, in a dramatic judgment, decided to pay his factory workers more salary rather than less. From an individual viewpoint, this move of his should have been drastic for the company’s profitability. Conversely, as a result of the increased pay, the factory employees began earning sufficient money to buy the cars they made, which directly enhanced the sales and earnings of the company.
Summary
Thus the ethical and wise decision to increase the wages of the workers benefited and boosted the morale of the whole factory which ultimately increased the profits of the individual ‘Ford Motor Company’. This example proves that if a self-interest is unselfish and ethical and has the potential of benefiting others as well, it can actually work.
Classroom examples such as these, of using universal ethical values in managing or working in a company can therefore enable the students to study and observe the ethics of the codes of conduct of various professions simply by reading the sample situations, and then applying these ethical codes in the diverse fields, to decide the suitable course of action in their professional lives. This approach due to the study of upper-division (330-400 level) ethics courses would not only ensure success in the students’ careers but also make them good individuals in society, benefiting the entire society as a whole.
Bibliography
Colvin, G. (2002). ‘Between right and right’, Forbes, 146 (9), 66.
Cruver, B. (2002). ‘Anatomy of greed’. New York: Carroll & Graf.
Nelson K. & Trevino L. (1999). ‘Managing business ethics: Straight talk about how to do it right’. New York: John Wiley & Sons.
Seglin, J. (2002). ‘Good for goodness’ sake: what we mean when we talk about ethics’ CFO, the magazine for senior financial executives, 18 (10) 75-77.
Seligman, D. (2002). ‘Oxymoron 101’ Forbes, 170 (9), 164.
Sheridan, C. (1996). ‘Enlightened self-interest’.