The Role of Business Ethics: Incorporating Values and Ethics into Business Decisions
Pitts, Sarah, Kamery, Rob, Journal of Legal, Ethical and Regulatory Issues
This paper examines the growing emphasis that colleges and business firms are placing on business ethics, as well as how business ethics inform the lives of those in business. Current views and legislation have only enhanced the significance of ethics codes, making them a crucial part of the corporate landscape. The increasing relevance of the costs of disregarding ethics in business is noted. Emphasis is placed on the importance of stressing business ethics in society, and on effective methods of teaching the concepts to students so that they will carry a strong ethical sense into the business world.
Incorporating values and ethics into business decisions have become increasingly important to business people, universities, government, and the public in general. The costs of unethical behavior in business are high and rising, possibly due to new government regulation. Because of the scandalous last decade, the federal government is listening to the public outrage and taking a stronger stance on unethical business practices. Because of recent laws, it is vital for businesses to focus on securing and monitoring sound ethical policies. In addition, pressure is being placed on business schools to ensure that students graduate with a knowledge of ethical principles and the critical thinking skills necessary to analyze and make sound ethical decisions. This paper will examine the role American universities have taken regarding teaching ethics to business students and the implications this holds for students and society at large. A brief discussion of different views regarding business ethics will be presented including the stakeholder theory, stockholder theory, instrumentalism, and the "invisible handshake." This study will focus on some possible reasons why students lack an understanding of business ethics and on how business schools can meet the challenge of educating students on the importance of business ethics.
WHAT IS BUSINESS ETHICS?
Business ethics can be thought of in many different lights, and part of the reason that business ethics has become such a contemporary issue is because it cannot be defined precisely. Although most people have different standards of what is morally justifiable, society generally feels that there are certain values that should be set as the minimum ethical behavior. Most people believe that in order to meet the minimum ethical standards, a business must be honest, obey the law, and not directly infringe on the rights that our society holds as inalienable human rights. This, however, does not exhaust the definition of business ethics that many believe in. Some other ethical issues involve compensation of employees, job security for employees, hiring practices, waste management issues, pollution, and conflicts of interest. Sometimes companies face situations where ethical choices are in opposition to their interests. An example of this could be a logging company doing business in forests around the world. One ethical consideration must be protecting the rain forest from destruction. Environmentalists may propose that the company stop logging completely; however, this may bring up another ethical issue such as the preservation of jobs for loggers. Except where otherwise stated, this paper is primarily concerned with ethical issues that fit in the first category of minimum ethical standards including honesty, compliance to the law, and fairness. This is not to undermine the importance of evaluating the ethical implications of every decision, but it is intended to simplify.
ARE BUSINESS ETHICS IMPORTANT?
There is empirical evidence that illustrates that of the 500 largest corporations in the U.S., two-thirds of them have committed some form of illegal behavior (Gellerman, 1986). This fact, combined with the many publicized accounts of illegal business operations including fraud, insider trading, and unfair hiring practices, has caused government, colleges, and businesses to increasingly focus on the role of ethics in business. …