This research paper focuses on increased decline of ethics in the business world and some of the areas that should be addressed to improve the nature of business ethics in the contemporary world.
We will write a custom Research Paper on Decline of Ethics in the Business World specifically for you
301 certified writers online
The management of ethical standards has become more questionable nowadays, with corporate scandals forming the largest part of the consequences that have occurred following unethical behavior and practices in business. This paper, through an extensive overview of relevant works explores the matter from a wider perspective, offering suggestions on what needs to be done in ensuring that businesses adhere to existing ethical standards and guidelines.
There is no doubt that, ethics have become a major issue in almost every sector of the contemporary world, including business. Today, businesses and the people in the business world don’t seem to be convinced about the significant benefits that are associated with ethical standards in business. In that case, it has become a norm for businesses to benefit themselves by doing what is in their own best interest at the expense of their customers and employees.
A case whereby business corporations are focused in making profits in their everyday’s operations more that they are concerned about the welfare of their customers and clients is a clear manifestation of how ethics in the business world have declined over the years. As a matter of fact, ethics and their importance in business decision making have increasingly become a subject of concern nowadays, owing to the pressure of the parties that have continued to be affected by unethical behaviors observed in the business world nowadays.
As a matter of fact, the world has never experienced as many cases of unethical corporate behaviors like today, whereby illegal practices such as fraudulent financial reporting, personal trading, and insider trading have become the norms in the business world. Greed and selfish has badly influenced business people, thus driving them to do bad business.
In some cases, this unhealthy greed has been promoted by government and other organizations that may happen to have great influence on businesses. Continuation of these practices among other unethical approaches has constantly exposed businesses to serious consequences such as economic sanctions and serious legal actions. There is no doubt that, the welfare of consumers is greatly threatened nowadays, owing to the underlying fact that ethical concerns have become a thing of the past to many businesses.
This study opens with a brief focus on ethics and ethical standards as they apply in the business world and how they are regarded by different people. To be able to provide strong arguments on the subject matter, the study will extensively feature previous works on business ethics, particularly ones that have touched exclusively on failure of businesses to comply to ethics.
This opens to another chapter where the outcomes of unethical business practices in the world are keenly observed. There is also a clear observation of some of the factors that have contributed to these failures, followed by a focus on the approaches that should be followed in ensuring that these problems are resolved. This study concludes by touching on the observed outcomes and implications in regard with the subject matter.
Ethics in Business
Business ethics simply refer to the set of guidelines in business, whose main purpose is to guide business corporations or organizations in doing the right thing. Ethics concern people’s moral perceptions or judgments about what is right and what is wrong. Basically, ethics in business are based on the fundamental principles upon which a business is established and would entail all the sectors within the business environment.
Some of these sectors would include human resource management, finance, sales and marketing, and the relationship with the outside forces. Business ethics play a significant role in the success of businesses, since they entail the manner in which organizations interact with their clients and the external world. As a matter of fact, this is one area that can give businesses a wonderful reputation depending on the relationships they have with their employees, stakeholders, customers, and the world at large.
Laws require businesses to adhere to set ethical standards in the pursuit to realize their business objectives and goals. By strictly conforming to business ethics, organizations can end up realizing unmeasured benefits and success in their commercial missions.
In this regard, there is a need for businesses to apply good morals in all areas of accountability within their organizational structures. One way through which business ethics can effectively be enforced is by doing everything possible to ensure that the interests of employees, clients or consumers, and the society at large are well considered.
Obviously, customers will always be attracted to those businesses that would tend to show great concern to them. This will automatically translate into good will from the customers and the stakeholders, thus paving way for maximized profits and other corporate gains. Based on this observation, it is clear that adherence to ethical standards can serve as a perfect way of attracting and retaining customers in a business.
There are multiple principles of best practices that can serve as an ethical guide for businesses. These principles include, but are not limited to, open mindedness, trust, spirit to meet obligations, control of accounting, retention of clear business documentation, and involvement in community affairs.
Get your first paper with 15% OFF
Minkes, Small and Chatterjee (1999) claim that “the success or failure of a corporation can be determined by the manner in which they deal with ethical aspects” (p.67). This, however, translates into the sense that, there is no other aspect in corporate world that can profit more than having a better recognition of business ethics. On the same note, there is no other aspect that can cost a corporation so dearly than failing to adhere to set ethical standards.
Business simply involves economic relationships and transactions that take place everyday in the market and also within corporate organizations. In most cases, these practices would tend to raise ethical concerns for which the normal ethics has not prepared the people in business for. Business uses most of the common ethical rules that apply in our normal lives such as integrity, respect, fairness, honest, and trustworthy, among others.
This, actually, is the reason why many people in the business world would tend to view ethics as just a requirement in business, and nothing that calls for serious attention and commitment.
This wrong perception about ethical standards in business has damaged the reputation of several companies in the world, making them less appealing to consumers and stakeholders. In such circumstances, businesses cannot execute corporate social responsibilities in a proper manner, and this could result into the biggest short-term or even long-term failures.
As we all know, businesses are economic organizations whose behavior and operations are governed by a framework of regulations. The primary objective and goal of any business organization is to make profits through the provision of goods and services. In most cases, this objective cannot be successfully achieved without the necessary human capital. All these engagements that have a meaningful purpose in the daily operations of businesses can only operate efficiently and competitively under certain ethical standards.
Business ethics are not only relevant considerations in business as many people would tend to think, but they also act as a perfect means towards the realization of business goals (Tang & Chiu, 2003). Regardless of the many benefits associated with business ethics as a key tool of corporate success, modern businesses have failed to adhere to them fully, and this explains the many problems facing the entire business world today.
Unethical Behavior and Practices in Business
It has often been stated that, as long as there has been business operations there have been countless cases of unethical practices happening in every corner of the globe to preserve public perception, profits, status, and market share (Hill, Richardson & McKaig, 2006). Previous literature has clearly shown that many business people in the modern world have forgotten that there is an ethical side to business and business practices.
As a matter of fact, many people in America don’t even believe that there is any ethical business in the world today. It is obvious that ethical standards have become a major issue in the contemporary world, not only in the corporate world, but in the entire society. As the business world continues to get more competitive, business organizations have turned a blind eye to business ethics, and in that case, are doing everything to survive in the markets.
In this regard, some corporations are even applying bad tactics such as doing things in their own interest at the expense of their customers, employees, or other business organizations. When huge profits and success becomes the concern of a business, there is nothing else that can be expected out of it other than unethical behavior and practice, and this largely affects employees, customers, and the entire world that relies upon the business.
Some of the common ways through which businesses have behaved unethically is by being dishonest, tricky, or deceptive in their engagements.
There are many examples of businesses with big names in the global market that have acted unethically at some point, and whose misdeeds have brought serious consequences to their reputations. Ignoring safety concerns in order to make profits has been a common issue with almost every case of unethical behavior that has occurred in the world, particularly in business.
In regard with this particular concern, several giant corporations that have at one time being involved in unethical business practices are discussed in the following paragraphs.
Merck & Co. and the Case of Vioxx
Even though Merck & Co. had received tremendous accolade for their decision to withdraw Vioxx from the market in 2004, they didn’t escape the blasphemy of having acted unethically. It was believed that the company had deliberately concealed the harmful effects of one of its products; a painkiller by the name of Vioxx, which had been used in the treatment of Arthritis.
Research conducted by the company researchers had confirmed the speculation that patients who have constantly used the medicine had shown higher incidences of heart-related problems (Boarright, 2012). Even though Merck & Co. had previously tried to deny these accusations by claiming that they have not been aware of the harmful effects of the product, this was not convincing enough, considering the fact that the company had the reputation of employing some of the most talented and highly paid scientists in the world.
More doubt about the case would show up in the lawsuits where it occurred that the company had damaged some documents, probably as a way of concealing some facts. This, however, made the outside world to believe that the company had tried to act in a responsible manner by taking careful measures in the production and marketing of the product in question. In this regard, they had defrauded public health programs and facilities out of huge amounts of money in prescription costs.
Toyota, one of the largest automobile companies in the world, was involved in a huge unethical failure in the year 2010. In this particular case, the company had betrayed its promise as a manufacturing corporation when it ignored safety concerns so that it could make more profits.
In the previous year, the company had been confronted with claims about their products that would include sticking pedals, tougher door locks, and faulty breaking systems, all of which raised serious safety concerns on customers. Despite these concerns, the company went on to delay recall investigations so as to save a little more money. More importantly, the automobile company did not seem to take this as a big deal, even after they were ordered to make an appearance before Congress to explain their unethical business behavior.
Despite the big name associated with this giant Electronic and Information Technology Company, they have not been lucky to escape cases of unethical business behaviors and practices. Apple manufacturer Foxconn is said to be under serious conditions that endanger the lives of the employees who work tirelessly to ensure that the company’s beautiful products reach the global markets.
There have been claims that the employees are made to work in hazardous conditions where they inhale cancerous vapors for long hours. Other bad conditions experienced by the workers at Foxconn on a daily basis include unreasonable workloads, poor accommodation, and lower pay outs. Perhaps, this explains the reason why this giant Multinational Corporation continues to be so profitable. Even though this issue has been going on for some years now, Apple is still attached to the manufacturer.
The above corporations are just some of the many businesses that are said to have taken part in unethical business behavior. Other big businesses that are known to have indulged in bad business practices in one way or another would include Wal-Mart, Siemens, Monsanto, DynCorp, Trafigura, and Philip Morris Tobacco Manufacturers, to mention but a few.
Of much concern here is the fact that, some of these corporations have been associated with unethical business practices not just once, but on several occasions. However, there is no doubt that the companies have used unjust means to pay for their freedom, and thereby retaining untainted records that allow them to carry on with their business operations. All these practices are clear evidence of how unethical business behaviors and practices have widely spread in the modern world of business.
Factors Contributing to the Decline of Ethics in Business
As it would be observed, various factors have led to this increased decline of ethics in business. However, some of the common factors here would include things such as globalization, technology, and the unclear relationship that exists between ethics and the law. It is believed that the business world has not always been unethical, but it was only in the wake of modern technologies when this immorality would start evolving.
There is no doubt that, business and society were more ethical in the ancient times and in the years just before the introduction of modern technologies. The advance of computers and smartphones has been both a blessing and a curse to modern businesses. While the use of the internet in these gadgets has greatly improved the ways in which people can conduct business, the trend has contributed to increased cases of unethical behavior and practices in business.
Unlike in the past when business was conducted on a face to face basis, many businesses dealings and transactions are finalized over the internet nowadays. The internet has made business dealings more impersonal since people don’t get to meet each other face to face, and this has paved way for unethical practices witnessed in the business world today.
Unclear relationships between ethics and the law is the other factor that has contributed to the decline of business ethics. As it would be observed, some ethical problems that would be experienced in the business world mainly have something to do with interpersonal relations or relationships between business rivals, which may prove more difficult to control by law.
There are also other practices commonly applied in modern business that are ethically objectionable, but which are left outside the regulations. Hardball tactics such the ones used by Toy ‘R’ Us against World Child could be ethical, but are apparently legal and are, therefore, common practices in modern business.
Possible solutions to declining ethics in Business
As a matter of fact, expectations of increased focus and attention on ethical business behavior have been observed in some parts of the world whereby numerous interventions have been undertaken to curb the vice. Some of the common approaches that have been applied to discourage businesses from engaging in unethical behaviors are economic sanctions and effective legal actions (Giacalone & Thompson, 2006).
The same should also be applied in the American companies as a way of controlling the sickening habit. More importantly, it is time companies and other business organizations introduced ethical lessons that will serve in all levels of their organizational structure. This will not only equip employees with important knowledge about ethics in business, but will also constantly remind them of the need to follow the ethical standards that serve as a guideline to their daily practices in business.
Introduction and implementation of effective laws aimed at addressing ethical misconduct in business can also be a better approach to take here, since this would discourage firms from engaging in unethical behavior for fear of serious legal actions. This would also lead to strong legal departments that will address ethical issues in the business world more appropriately. Educative programs aimed at informing people about general ethics should also be made available to people through different avenues in society.
This will be a very significant approach, since most of what is contained in general ethics is just what applies in business. Another important mitigation approach against unethical business behavior would be to educate people about the dangers of dedicating too much trust on the internet, especially in matters involving business transactions. On the same note, relevant media laws aimed at making online transactions and dealings more ethical could also be a promising approach in the fight against unethical practices in business.
As has been noted in this research paper, setting up business ethics has proved to be one thing while sticking to them fully remains to be another thing for modern businesses. In fact, the management of ethical standards in business is more questionable, considering the vast corporate scandals witnessed in the world these days.
As it is shown in this study, unless people agree to embrace ethics as an integral part of business, the world of business will continue to suffer the serious consequences that come with the vice. In this regard, there is always a need for businesses to observe certain ethical standards and guidelines as they continue to pursue their business objectives. In doing so, businesses will improve their social corporate responsibilities and this will, in turn lead to significant benefits.
Boarright, J. (2012). Ethics and the conduct of business (7th Ed.). Boston: Pearson.
Giacalone, R., & Thompson, K. (2006). Business ethics and social responsibility education: Shifting the worldview. Academy of Management Learning & Education, 5(3), 266-277.
Hill, C., Richardson, T, & McKaig, T. (2006). Global business today. New York: McGraw-Hill/Irwin.
Minkes, A., Small, M., & Chatterjee, S. (1999). Leadership and business ethics: Does it matter?
Implications for management. Journal of Business Ethics, 20(4), 327-335.
Tang, T., & Chiu, R. (2003). Income, money ethic, pay satisfaction, commitment, and unethical behavior: Is the love of money the root of evil for Hong Kong employees? Journal of Business Ethics, 46(1), 13-30.