Issues of Business Ethics and Social Responsibility Essay Example

labor, and the establishment of laws to regulate corporate abuse. A society that ignores the ethical pioneers of the past simply because they didn't address all contemporary issues undermines its own foundation. According to David Munay (1997), "the ethics of business and organizational life have gained greater public and professional attention in the past 15 years." Nowadays, business leaders frequently receive invitations to conferences and workshops on topics such as corporate values, corporate governance, and other ethical aspects of management. The shelves of bookstores are filled with various specialized titles, and no respectable management book can avoid discussing organizational values or corporate social responsibility.

During the 1970s in Nigeria, there was a strong emphasis on wealth creation due to the oil boom. This resulted in a "get-rich-quick" mindset and a widespread disregard for moral responsibilities beyond financial matters. Currently, Nigeria is going through a decade of introspection regarding morals. Although this issue extends beyond just the business sector, it is particularly noticeable since these concerns have been neglected for so long.

There has been an increased interest in ethics within Nigeria, possibly due to numerous widely publicized scandals involving bank fraud, failed contracts, tax evasion by multinational corporations, currency fraud by government officials, and the infamous "419" advance fee fraud that has tarnished our international reputation. Several popular newspapers ranked Nigeria as the second most corrupt country globally after Cameroon - a ranking confirmed by Transparency International. These unethical practices are raising significant worries for both the government and private sector operators.

The recent downfall of Arthur Anderson and other internationally esteemed companies serves as an illustration of how crucial everyday ethics are. "EVERYDAY ETHICS" underscores that a

company's ethical values can be observed in its day-to-day activities such as how it treats employees and clients, develops and supports products, awards contracts, and assigns responsibility.The way a business handles day-to-day actions is just as important for determining its ethics as how it deals with crises.

According to Elaire Sternberg (2000), certain events that attract attention, such as major frauds, may not pose an ethical dilemma for businesses. In these cases, business people often agree on what is right. The problems these events present are typically practical ones, such as how to implement agreed-upon moral standards and how to deal with the scoundrels that unfortunately exist in business and other areas. Sternberg further suggested that the most challenging business ethics issues are those that involve a genuine disagreement about what is morally right or wrong.

The text also mentions "The Tools of Ethics" and "Values." It is important to recognize that business ethics can refer to various things, but it commonly refers to ethical behavior within and by businesses. In this sense, adhering to the right ethical standards typically benefits businesses by helping them achieve their goals.

Making the wrong decisions can impede the pursuit of goals. However, recognizing the right choices requires understanding the principles that govern ethical behavior in business. Therefore, studying and understanding these rules can be beneficial to businesses. According to Sternbery (2000), an ethical decision that clearly defines the principles of business ethics can assist businesses in identifying and resolving ethical issues. A model serves as a guide, helping businesses navigate the ethical challenges they face.

Although a theoretical account is not a cure-all solution, it serves as a map that does not

physically eradicate human imperfections. However, the value of an ethical decision model is significant. Primarily, it can help resolve conceptual problems and prevent businesses from wasting resources on dubious issues and unjustifiable guilt. In a business context, an ethical decision model can indicate when and how ethical treatment is appropriate.

An ethical decision model can facilitate the connection between moral standards and the addressing of moral questions within a concern. This model promotes the early identification and resolution of ethical issues, which can ultimately reduce silence surrounding these issues. By doing so, businesses can benefit from their staff's vigilance and experience significant decreases in costs and negative impacts associated with ethical problems.

CULTURAL PERSPECTIVE TO VALUES

Within a specific culture at a given time, it is common to find widespread agreement on major values.

The general consensus among most people is that certain things are considered good and others bad. For instance, the right field mouse is seen as good while corruption in authorities is viewed as bad. It's important to acknowledge, however, that not everyone or every group shares the same values. Nevertheless, the collective values of the majority significantly impact society's beliefs and actions. Yalokwu (2002) suggests that personal beliefs strongly influence managers' actions (Guth and Jaguini, 1965). For example, a manager who prioritizes economic value may focus on company growth while one guided by societal values might be willing to compromise some company growth for improved employee conditions.

However, values are not the sole factors that impact decision making. The unique circumstances that a manager encounters can greatly influence or even dictate their behavior. Ethical concerns permeate all aspects of business activity. Ethical issues naturally arise when

core ethical values, such as honesty or fairness, are in question. They may also be relevant whenever actions or decisions affect others, either positively or negatively. However, ethical issues can even arise when the rights and interests of others are not directly involved.

All decisions regarding values, methods, quality, and priorities involve ethical judgment. Thus, the majority of decisions and choices about objectives, standards, and preferences have ethical aspects. They either involve ethical values, contribute to or harm individuals, or indicate character - or may include all of these factors (Sternberg 2000). Various actions such as hiring and firing, selecting suppliers, setting prices, establishing goals, allocating resources,determining dividends , training employees , planning schedules,and delivering contracts can all entail ethical choices.

Business ethics encompass all aspects of business operations - even minor decisions made within proficient or economic groups. These issues are not limited to countries or individuals who prioritize "doing good", but instead are inherent in all business practices. Understanding business ethics is essential for identifying and addressing ethical problems in a manner suitable for the company. For instance,a company that emphasizes employee well-being must recognize the significance of job security as it is a top concern for most employees.

Losing his job will likely cause significant inconvenience for the loan employee. He will experience uncertainty, anxiety, and a potentially long period without steady income. Additionally, he will incur expenses while searching for a new job and may be forced to relocate locally.

A company that is truly dedicated to providing employment stability sends a strong message to its employees about their well-being. This creates a foundation for mutual commitment between the employer and employee.

It is widely acknowledged

that guaranteeing job security contributes to the exceptional loyalty traditionally displayed by Japanese employees towards their companies.

While cost-cutting policies that neglect employee well-being can undermine loyalty, it is important to acknowledge that terminating an employee is not inherently unethical if there are advantageous goals in mind. These goals may include improving the company's long-term sustainability, reducing costs, or eliminating unproductive or disruptive employees to protect morale and safety. In some cases, terminating certain employees might even be seen as an ethical obligation.

The dismissal of an employee with a large family may be considered morally wrong, but directors have a responsibility to prioritize the company's interests over personal preferences (Elegilo 1996). Failing to address the continued employment of someone who poses a threat to the organization, as Intel experienced, can be seen as highly irresponsible. This is particularly true for employees who consistently engage in misconduct and undermine the company's standards.Other ethical tools:

1. Loyalty - remaining committed to managing business operations. The text highlights the importance of principles like commitment, fairness, principled behavior, and confidentiality in a business organization. These principles are crucial for maintaining ethical human relations and upholding common morality. Human relations involve various interactions among individuals in different contexts. According to Ack Halloran (1978), human relations encompass all interactions, whether they involve conflicts or cooperative behaviors. The study examines effective group work strategies for achieving organizational goals and personal well-being while also addressing conflict prevention and resolution within an organization. The field of human relations emphasizes proactive analysis and resolution of behavioral issues within an organization.

Douglas McGregor (1960) defined several principles that serve as the basis for human relations. These include gaining

loyalty and cooperation from individuals within an organization, recognizing the interconnectedness between an employee's status, rights, promotion opportunities, and economic well-being with the success of the enterprise, ensuring that government or union activities do not compromise the fundamental relationship between individuals and the organization, implementing policies and practices that promote and protect workers' rights and well-being, prioritizing individual well-being over organizational interests, and providing economic and social security for employees.

In order to maintain positive human relations, directors should take certain steps as outlined by William Scolt (1962). These include getting to know their employees on a personal level and showing genuine interest in their well-being. Directors should also be willing to share responsibilities with their subordinates and effectively communicate the reasoning behind decisions. Treating subordinates with dignity and respect is crucial, as is assisting employees in completing assigned tasks. Publicly acknowledging and appreciating employee achievements is another important aspect.

The effectiveness of human relations heavily relies on the use of language.

Good communication and leadership skills are crucial in any human interaction. Positive words can have a beneficial impact, while negative words can create a negative atmosphere and cause significant pain. According to Stan Kossen (1978), there are specific guidelines for using words:

• The least important word is fifty.
• The two most important words are "we."
• The two most important words are "Thank you."
• The three most important words are "if you please."
• The four most important words are "What is your opinion?"
• The five most important words are "you did a good job."
• The six most important words are "I admit I made a mistake."

These ethical rules highlight the role of reciprocity in maintaining ethical standards for employees and ensuring their well-being is

not compromised by management. Both employers and employees should see themselves as stakeholders in achieving corporate goals to prevent any sense of insecurity or unfair treatment.

According to common morality, the belief is that respect leads to respect, resulting in both parties desiring to uphold the contractual agreement that ensures human success through employee honesty. The text emphasizes the importance of valuing employees by providing assistance and maintaining their well-being, while also suggesting steps to re-establish a long-term relationship between organizations and employees. These steps include: 1) Re-establishing a code and policies for sustainability; 2) Re-establishing justice; 3) Re-establishing fairness; and 4) Re-establishing practices of honesty. To achieve these goals, the text highlights the significance of common morality, dignity, honesty, fairness, and sustainability. It proposes specific actions such as apologizing for past immoral actions and offering personal support. Additionally, it encourages full disclosure and open communication. Regarding fairness, the text recommends ensuring proportional compensation for any losses and expediting reconciliation efforts. It also stresses encoding lessons learned for future transactions.The text suggests using this experience to standardize global practices and establish an auditing process that monitors ethical progress along with financial progress in promoting sustainability. It recommends updating plans for ethical authority beyond resolving the Holocaust issue and regularly reporting progress and plans to the global community, employees, and industry associations. Various examples of ethical regulations, such as not lying, keeping promises, respecting parents, and helping those in need are provided. However, these regulations may be controversial to some extent. For instance, while most people agree on avoiding lying generally, there might be less agreement in extreme situations. To illustrate this point, consider a scenario where

an enraged individual with a sword asks about the presence of your sister in the house.

You have a reasonable fear that he wants to attack her. Your sister is actually in the house. Does the rule that you should not lie cover this situation? When the proper range and significance of an ethical rule is questioned, it should be referred to the higher rule and objective that justify it. Therefore, for example, in the case of the angry man with a sword, one could argue that one should not tell lies because (1) telling lies is a way of harming the people one deceives and (2), it tends to undermine trust among people. If that were the complete justification of the rule against telling lies (which is not the case), it could be concluded that the rule did not apply in this situation. By telling the lunatic that your sister is not at home, you would not be harming him in any way.

On the contrary, preventing him from doing something that he would deeply regret once he regains his sanity does not undermine trust among people. According to Elegido (1996), the following list of rules constitutes a moderately complete set of moral principles in business ethics.

Principle of Solidarity:

We must prioritize the well-being of all human beings, not just our own. Failing to do so undermines our own fulfillment.

Principle of Rationality:

One should always strive to act intelligently.

Principle of Fairness or Impartiality:

One should apply the same standards when judging one's own actions, the actions of loved ones, and the actions of strangers.

Principle of Efficiency:

When promoting human fulfillment, good intentions are not enough; one must strive to use

effective means.

The principle of refraining from willing injury to a human being states that one should never intend to harm a human being.

: The principle of role responsibility states that one does not have responsibility for all aspects of the wellbeing of all human beings. One's specific circumstances, roles, and commitments give them a primary responsibility for certain aspects of the wellbeing of certain people.

ETHICS AND SITUATIONAL FACTORS IN ETHICAL BEHAVIORS IN BUSINESS

According to Gary Edward, President of the Ethics Resource Centre in the U.S, two-thirds of companies seeking ethical programs "came off the front page as a consequence of serious wrongdoing". This indicates that ethics are primarily implemented as a tactical response to a serious problem rather than a long-term commitment and responsibility. From this perspective, most ethical initiatives aim to prevent repeating the mistakes that led to that particular crisis.

The Federal Government established various bureaus, including ICPC and EFCC Acts, to address a range of unethical practices in our nation. These bureaus aim to uphold the national and international reputation of Nigerians. However, simply implementing codes and procedures to target specific misconduct is not sufficient. It is necessary to also address the broader cultural and personal factors that contribute to such behavior, rather than solely assigning blame to individuals or groups.

The Nigerian society is predominantly impoverished, possibly due to our reliance on low technology and agriculture or our heavy dependence on the oil industry. Less than 10% of the population controls about 90% of the nation's wealth, reflecting a stark wealth disparity. Our economy operates on rough capitalist principles, leading to the rich

getting richer while the poor become poorer. Both private and public sector workers experience significant insecurity regarding their future prospects.

It is "everybody for themselves, God for all of us; whoever is slow is taken by the Satans." In this situation, individuals are desperately seeking opportunities to secure their own "tomorrow" and that of their families. As a result, a sense of nationalism or national consciousness is not a priority for most Nigerians. Unfortunately or incidentally, we idolize those who have had the privilege of occupying positions of power, without considering the fact that these individuals have acquired their wealth through corrupt means.

We introduce guidelines for chieftainship and national awards for individuals known for their unethical behavior. According to John, Dalta Costa (2000), ethics as a reflexive behavior are not as comprehensive or motivating as the thought and commitment dedicated to ethics prior to an issue occurring. The reason why many companies and prominent individuals in Nigeria continuously engage in wrongdoing is directly related to their narrow view of ethics as a one-time problem rather than within the national framework. Companies hire competent individuals but do not leave them solely responsible for managing ethical matters. Organizations require strategies to be established, analyses to precede decisions, and measures to be implemented for monitoring progress and outcomes.

Many companies, such as Shell Petroleum and Mobile Producing, commit to investing regularly in training and skills development to become learning organizations. The importance of ethical orientation is also emphasized. In addition to understanding the factors that contribute to ethical judgment errors, organizations should also examine the internal tensions and contradictions that may jeopardize ethics in the future. Just like strategies require

a situational analysis, ethics requires a temptation analysis. In simpler terms, individuals or groups in positions of responsibility must undergo rigorous threshold tests to ensure their preparedness.

The administration can conduct degeneration analysis trials or other psycho-analytical trials on them. Put differently, what ethical concerns have arisen in the past that have had legal and moral implications? How is this changing the behavior of the organization and its employees? What new pressure points have been created by changes in technology, competition, or globalization? How do corporate behaviors and policies affect how these ethical dilemmas are perceived? The process involves examining the horizon from an ethical perspective, anticipating new challenges and temptations, and assessing risks. Essential to this exercise is understanding not only the extent and scale of temptation but also the moral strengths and weaknesses of the organization in resisting and overcoming them. This may involve auditing past ethical performance, analyzing misconduct, or evaluating employee ethical concerns.

The internet provides greater access to clients, but it also presents new challenges regarding privacy and respect. Are companies developing their ethical practices alongside their technical capabilities when utilizing this new medium? How prepared is the company to handle temptations that arise with new technology? Dalla Costa (2002) suggests that a strategic assessment sets the course for what needs to be done, while an ethical assessment addresses the how. As we have learned from total quality and other corporate reform programs, the what and how are inseparable.

THE CONCEPT OF SOCIAL RESPONSIBILITY

People often discuss the "duties of the house" or, more commonly, the "social responsibility of companies." These expressions are often used loosely and have different meanings to different speakers.

Some argue that business organizations have responsibilities that extend beyond making profits.

The common perception is that it is appropriate for companies to support beneficial community initiatives such as universities, museums, and hospitals in order to minimize pollution beyond legal requirements. It is also important for them to cater to the physically disabled, refuse investments in certain places (like apartheid South Africa) to promote desirable political goals, and operate in a way that contributes to the common good of the communities they serve rather than solely maximizing profits. Some people completely oppose this viewpoint and argue that a business's only responsibility is to comply with the law and generate profits for its shareholders. Others believe that companies can legally involve themselves in some of the mentioned causes but not others. Navigating this conflicting range of opinions is not a simple task.

Many people believe that it is the duty of directors to maximize their company's profits. However, the responsibility of directors in this matter is a contested issue. To clarify, maximizing profits does not simply refer to making an effort to generate more profit. It involves making all possible efforts to make profits as large as possible, prioritizing this above everything else (including loyalty, compassion, environmental concerns, social welfare, and other related considerations).

According to Elegido, it is not necessary for all business organizations to prioritize profit, but before agreeing with the idea that businesses should maximize profits, one should consider whether profit is the only thing that matters in business and whether other considerations should come first in case of conflict.

PROF. FRIENDMAN'S VIEW

Professor Friedman, a well-known monetary economist, consistently argues for the belief that "an organization has

only one duty: maximizing profits for its shareholders while complying with the law." He explains his main arguments for this perspective in a famous article titled "The Social Responsibility of Business is to increase its profits."

In Friedman's viewpoint, organizations have a responsibility to respect all laws that protect public interest. However, exceeding this would mean having socially responsible executives.