Business Ethics and Rules Essay Example

without contributing to society may face public criticism.

The article "The Sichuan Earthquake and the Changing Landscape of CSR in China" by Ariel McGinnis, James Pellegrin, Yin Shum, Jason Teo, and Judy Wu from the University of Pennsylvania states that many multinational corporations (MNCs) adopted a global corporate social responsibility (CSR) policy aligned with their international standard after the Sichuan earthquake. Some MNCs committed to cash donations while others offered a combination of cash, equipment, and services during the immediate aftermath and subsequent weeks.

According to reports, local Chinese companies donated more than multinational corporations. It was widely believed that international firms' contributions to relief efforts were not as large or timely as those made by domestic companies, considering their substantial presence in the Chinese market. This disparity led Chinese consumers to openly criticize major MNCs and call for a boycott of their products. These affected MNCs were soon dubbed 'international iron roosters' by the Chinese public.

The term "iron-rooster" refers to a bird that never loses a single feather, illustrating the perceived stinginess of multinational corporations (MNCs). Despite making additional donations, these MNCs faced ongoing consumer anger in China. This resulted in severe public backlash, including protests at various McDonald's locations and blockades. These events underscore the importance of organizations contributing to society. The third aspect to consider is the consequences of business activity, including the impact on a company's reputation and its industry as a whole (p36). It is crucial to understand why these consequences are significant. For instance, Sanlu, a once popular infant formula brand in China, faced bankruptcy following the "Sanlu milk scandal". Media reports revealed that by November 2008,

around 300,000 individuals were affected, with six infants dying from kidney stones and other kidney damage. An additional 860 babies were hospitalized. Due to Sanlu Group's failure to address the issue promptly and recall the products, a horrific incident occurred. Clearly, the actions of organizations can have an impact on their development and the well-being of the public. Therefore, businesses should not solely prioritize profits but also be responsive to society. Strong ethical values are essential for achieving success in the business world.

If a corporation does not embrace ethical values and fails to be responsive to society, it will meet the same fate as the Sanlu Group.

Solomon outlined the eight principles of ethical thinking in business and the three C's of business ethics. These rules serve as moral foundations for a business, including considering the well-being of others, thinking as part of the business community, following laws while not solely relying on them, and seeing oneself and the company as part of society. Other rules include adhering to moral principles, thinking objectively, questioning one's actions, and respecting customs without compromising ethics.

These rules are in line with the concept of the three C's previously mentioned. According to Solomon, ethical thinking involves compliance with both implicit and explicit rules, considering contributions to others and potential gains, and avoiding harm to oneself and others.

The lack of business ethics contributed to the failure of Sanlu Group in the "Sanlu milk scandal." Specifically, it failed to consider the well-being of others. Establishing trustworthiness is crucial for ethical practices in businesses as it results in long-term profitability.

The 1982 Tylenol Scandal caused seven deaths among individuals who consumed extra-strength

Tylenol capsules in Chicago. However, contrary to expectations, this incident did not lead to bankruptcy for the company.

Johnson & Johnson acted in accordance with their business ethics and took appropriate measures when they discovered tampering of their product. Despite knowing they were not at fault for the tampering, the company took responsibility for public safety and promptly recalled all capsules from the market. This decision resulted in a financial loss of over $100 million dollars (Lazare, Chicago Sun-Times 2002). Additionally, all advertisement for the product was ceased. Furthermore, Tylenol products were reintroduced with triple-seal tamper resistant packaging, improving the security of their products.

The media lauded Johnson & Johnson for effectively handling the Tylenol incident, resulting in Tylenol becoming the leading over-the-counter analgesic in the US. The company's adherence to ethical principles played a major role in restoring its reputation. It is beneficial to comprehend and implement business ethics, specifically the eight rules of thinking ethics, in order to establish an ethical and socially responsible business in diverse areas like finance, accounting, sales, marketing, and others.