In the global business environments of today there is an ethics crisis. The main culprit is unethical corporations and anonymous companies. Creating demands on international managers to take a more definitive stance on issues of ethical behaviour, economic development in host countries, social responsibility, and environmental protection around the world is now more paramount than ever to safeguard an ethical corporation.
Business ethics is relevant both to the conduct of individuals and the organisation as a whole. Ethics apply to pretty much all aspects of business conduct, from boardroom strategies and employee or supplier treatment to sales techniques and accounting practices. Ethics transcend the legal requirements for a company and is, therefore, about discretionary decisions as much as behaviour guided by values (Ibe.org.uk, 2014).
Employers should not take for granted that their staff fully understand what ethical standards are expected of them when performing on behalf of the company. Guidance is therefore vital for creating and sustaining a culture of ethics and avoiding misconduct in an ethical corporation. (Ibe.org.uk, 2014).
Acting in accordance with ethical values is playing an increasingly instrumental role in business today because companies do not operate in a vacuum, but appertain a society which assumes a certain standard of business behaviour. Companies depend upon what is often called ‘a license to operate’. Stakeholders need to be associated with an ethical corporation. Fair treatment, honesty and consistency is of importance to a business’s customers, suppliers, investors and employees alike. It builds trust (Ibe.org.uk, 2014).
Crises and scandals should also be avoided as it is harder to recover without a foundation of trust. Moreover, having clearly defined values and an ethics policy is viewed as good governance practice; it is one of the hallmarks of an ethical corporation. Operating with integrity is therefore a key part of sustainable performance for businesses (Ibe.org.uk, 2014).
The most commonly used value words in introductions/preambles to codes of ethics are: integrity, trust, openness, honesty, respect, sincerity, transparency and responsibility. Organisations may also adopt a set of business values, such as efficiency, reliability profitability, quality, and customer service. Most organisations would assert that all their employees are responsible for conducting their work according to such ethical expectations (Ibe.org.uk, 2014).
In a more recent trend, an ethical corporation will establish responsibility even at board level through committees such as Audit Committees or dedicated Ethics Committees and that is why in the US large conglomerates employ one or more «Ethics and Compliance Officers” (Ibe.org.uk, 2014).
Unethical practices like overcharged prices, unfair labour practices (Blog.nationmultimedia.com, 2014), behaviour harmful to human health and the biosphere, the impact of privatization on people´s lives, consumer manipulation, undercover marketing, patent trolling, hostile takeovers are just the tip of the iceberg. Forex scams, executive compensation, bribery, kickbacks, price fixing, black and grey markets, greenwash, viral marketing are still going strong, however. (Steps in Resolving Ethical Dilemmas).
Unlike an ethical corporation, anonymous companies in particular pose grave threat to our entire social and financial backbone. Tax evasion, mafia, foreclosure, drug trafficking, illegal logging, divergent government resources and blood diamonds are all crimes enabled by anonymous companies. According to the World Bank, anonymous companies were used in 70% of grand corruption cases alone (Global Witness Limited, 2014).
Many believe that the word ethical equates to lawful, and that by being lawful an organisation or activity is automatically ethical. This is not so.
While many things that are unethical are also unlawful, ethics do not equate to law. Many unethical things are entirely lawful (although some can only be tested when/if they get to court). Moreover, sometimes the law (of any land) can produce extremely unethical effects. In fact, while most unlawful actions will also tend to be unethical, certain situations can contain a strong ethical justification for breaking the law, or changing the law.
Notable examples are situations in which the law, or the way law is applied, is considered unethical (‘wrong’ is the typical description) by sufficient numbers of people to pressure the legal system to change. Even from the perspective of an ethical corporation one can perhaps think of examples when this has happened, and such cases are examples of an ethical viewpoint being ultimately more powerful than the law (Businessballs.com, 2014).
In the global business markets of today externalities have deformed business ethics. And if the bottom line is still all that matters then we have the right to know where and how these profits are made and to what intends and purposes they are put to use by said companies/persons. An ethical corporation views socially responsible activities and goals with far greater priority than that of your traditional profit-driven free market business approach. It does not focus on how much profit is made, but how it is made.
Therefore, we have an ethical responsibility to uncover who funds conflict as well as prosperity. And that is what an ethical corporation should strive to do; instead, our legal structures currently foster this secrecy. “We need to know who owns and controls companies, to change the law, and to launch a new era of openness in business. We have to change the law globally to create public registries which list the true owners of companies and can be accessed by all with no loopholes» according to Charmian Gooch (My wish: To launch a new era of openness in business, 2014).
Especially in view of the fact that every person on earth is a stakeholder in every organisation (Businessballs.com).
Only then will modern business ethics be able to reconcile the organizational purpose(which is typically a series of aims, for example profit for shareholders, or cost-effective services delivery in the case of public services, together with supplementary aims such as market growth, geographical expansion, product development, brand development, knowledge development, technological pioneering) with the needs and feelings of people (staff, customers, suppliers, local communities, stakeholders) with proper consideration for the planet – the world we live in(in terms of sustainability, environment, wildlife, natural resources, our heritage, ‘fair trade’, other cultures and societies) and at all times acting with probity – encompassing love, integrity, compassion, honesty, and truth (Businessballs.com).
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