Business Ethics and Social Responsibility

Running head: BUSINESS ETHICS AND SOCIAL RESPONSIBILITY
BUSINESS ETHICS AND SOCIAL RESPONSIBILITY
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BUSINESS ETHICS AND SOCIAL RESPONSIBILITY1
For a successful business to sustain in the market, a business must follow certain business
ethics. Business ethics helps a company trustworthy and reliable every member associated with
the company, internally and externally. An appropriate ethics plan is developed when there is
appropriate personal ethics. Along with business ethics, a company takes up social responsibility
that contributes towards society and environment ( Swanson and Frederick 2016). The paper will
discuss business ethics and social responsibility in this paper with the help of a real life example,
a business ethics issue of Commonwealth Bank. The paper will discuss the issues in brief and
use it to explain from the ethical perspective along with ethical philosophies that play vital role
in maintaining the firm ethics in an organization.
The past records have successfully shown that there are a number of ethical risks that are
associated with the provision of financial advice along with other factors impact the ethical
decisions making of financial planners ( Ferrell & Fraedrich 2015). Considering the case of CBA
and its financial scandal, three examples of ethical behavior can be traced which are interlinked
with each other. Firstly, there is individual behavior is noted from the rough financial planners of
the CBA who conducted an unethical plan by placing elderly retiree’s savings into high risk
investment product. It was contrary than what was instructed and was certainly lacking
disclosure with falsifying of documents. Also, there is also an example of forged documents by
CBA financial planners. Secondly, the issue is encouragement from CBA unethical behavior by
providing incentives in the form of bonus, commissions and overseas sales trip to financial
planners for top performing financial planners who are able to meet their sales target. A sales
based culture amongst the financial planner is fostered by CBA. Also, when they were not met
with their target they were threatened with dismissal ( Schlagwein, Thorogood and Willcocks
2014). Thirdly, CBA adopted several behaviors which would cover up the financial planner’s

BUSINESS ETHICS AND SOCIAL RESPONSIBILITY2
misconduct. When CBA was first aware of transgressions involving financial planner, they
suspended the employee however he was provided with promotion to the senior financial planner
within the next month of his promotion. All these behavior represents the company’s unethical
decisions. The case has now reached its peak and the company has faced the consequences of it (
Isidro and Sobral 2015). The company has involves unethical behavior which have effected its
employees and the people associated with the company.
Utilitarianism is one of the best known theories in regard to ethics with the best known
persuasive good hypotheses. It is one of the consequentialism theories, where the center thought
of the theory is depended on the consequences. It is the consequences that decide the action is
right or wrong ( Kalajtzidis 2013). Utilitarianism trust that the motivation behind the ethical
quality is to contribute and improve life by expanding the measures of awful things. They
dismiss morale codes or frameworks that comprises of directions or taboos that rely on
traditions, conventions, or requests given by pioneers or powerful creatures. Utilitarianism
imagine that the things causes an ethical quality to be valid or legitimate is its positive
commitment to human creatures ( Crane and Matten 2016).
The Kantian theory revolves around the thought of an ‘unmitigated object’. It is an all
inclusive standard of moral that expresses that an individual is ought to dependably regard the
humankind in others. Every person should act as per decides that have the potential to hold for
everybody. According to Kant, the ethical law is a fact of reason, and subsequently that every
single judicious animal are bound by a similar good law. In this way one should answer to the
inquiry ‘what should I do?’ ( Street 2016). To which Kant answer that people should act
judiciously as per a widespread good law. In the same way, Kant contended that has moral
hypothesis needs confidence is through freedom, God and the always lasting status of the spirit.