Business Ethics for Unseasoned Entrepreneurs: Trends and Concerns for Professionals and Stakeholders

By Boyd, Michael W. | Entrepreneurial Executive, Annual 2004 | Go to article overview

Business Ethics for Unseasoned Entrepreneurs: Trends and Concerns for Professionals and Stakeholders


Boyd, Michael W., Entrepreneurial Executive


ABSTRACT

This manuscript looks at the importance of ethical behavior and decision-making in today's business operations. It points out who is involved and some of the ramifications of unethical business dealings over time. Ethical standards are entwined throughout our companies today no matter what their size. It is imperative that young entrepreneurs understand how some of society's accepted actions have evolved over time and the problems that can arise if not checked in the early stages of start up for new businesses. To develop an organization that normally operates ethically in all of their dealings the founder needs to set the trend early in the company's life span.

INTRODUCTION

Ethics play a major role in today's "arm's length" business transactions, and in turn, those transactions play a major role in the lives of all stakeholders. Taking a closer look at today's business ethics and how each party is affected can benefit all the participants in this dynamic process. Many entrepreneurs are new or relatively new to the business world and can be somewhat naive about common business practices that have evolved over time. Questions arise such as, should a business have morality, or is that a human characteristic? Should all executives, managers, and employees answer to the same set of rules for ethical conduct? Are ethical standards the same for a person at work as they are when that person is not at work? Who is guilty if an employee performs an unethical or illegal act while working for a company? What should be done if an employee calls attention to unethical practices that are condoned by the company? Are there any correct answers or do the answers depend on the situation and circumstances? These questions and many more can be asked about ethical behavior (D'O'Brian, 1993). Recently, major unethical and/or illegal acts have been exposed in many of our corporations (Notes, 2003). This discussion will hopefully better equip our business leaders and young entrepreneurs to deal with ethical questions arising from situations in which they find themselves.

We cannot limit our discussion to "corporations" defined as large "super companies." Presently, most new businesses are created by entrepreneurs expanding into the new areas of previously unknown or undeveloped products and services. This requires that ethical standards be implemented and nurtured in all companies, regardless of size, to insure that these growing institutions--our future "super companies"--develop a corporate ethical culture compatible with valued societal ethics and the legal system in which they operate.

Budding new managers and executives should be particularly interested in business ethics and how they evolve because the honesty and integrity of the company's managerial team will directly impact its ability to successfully lead the company. Individuals and/or other companies contracting with the business for services and/or products also have a vested interest in and an impact on the ethical environment of the business. For example, a public accountant has to function independently of an organization in order to insure the integrity of findings during the audit; however, this does not mean that the auditing firm should divorce itself from a partnering association with the organization to improve ethical practices. This, in turn, enhances the audit results. In summary, management has a responsibility to the organization, the employees, the customers, and the public to operate a socially acceptable and ethical business. This is also in the best interest of all concerned. If the leadership of an organization does not practice ethical behavior and does not provide training in ethical and moral decision making for all employees, the image of the organization will be less than desirable and have less than desirable effects on its stakeholders.

WHO HAS CORPORATE ETHICS?

Ethics in business is not a new issue. …

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Business Ethics for Unseasoned Entrepreneurs: Trends and Concerns for Professionals and Stakeholders
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