Ethics in Business: Making Ethical Decisions and Approaches

This article discusses the process of making ethical decisions in business and explores different ethical theories and approaches. It also examines the relationship between ethical business practices and profitability.

Business Ethics
Business ethics in a global
perspectives
Student Name

Ethics in business 1
Ethical theories assist in making ethical decisions:
Ethics are the bunch of beliefs that actually deals with the ideologies of morality with
well-defined principles of right and wrong behavior in terms of responsibilities, rights,
guidelines, benefits to society etc. In another words, ethics is the word that is derived from
the Greek word “ethos” which highlights characters, routine and norm (Ho, 2015).
Ethical theories and principles are the basis of the ethical analysis, which highlights
certain viewpoints that helps in guiding and can obtain a pathway to the decisions. There are
certain steps that help in making ethical decisions.
Observation and facts
Appeal to principles or ideas
Consideration of basic obligation, duties and rights
Consideration of consequences
Conclusion
The above process highlights that how ethical theories help in making better ethical
decision making: To making ethical decisions, first and the foremost thing is to gather the
facts. Even facts generates two results one will be positive and another one will be negative.
If business houses attract good then the outcomes will be positive and if the facts are wrong
in the beginning then moral judgement can lead business towards the wrong path.
Second step highlights to make prediction, a guess about the future. In concern to
business houses, there is always an element of uncertainty. Yet, the organisations have to take
guess and select the action, which they like the most to cause good.
Third step, highlights to identify the feeling, make consideration regards duties,
obligations and rights. In this, they highlight what is rational and conscious and feelings are
the way to check whether an individual is rationalizing.
Fourth step displays, consideration of consequences are seen for the longer run.
Business houses duty is to see the consequences in a long run. Lastly, fifth step focuses on
the conclusions in which company builds the hypothesis and then test it, reach the conclusion

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and summit it. Hence, this process helps in employing a sound process in making the ethical
judgements within the organisation (Tenbrunsel, & Smith‐Crowe, 2008).
A large portion of ethics helps in dealing with the approaches of the principles or
standards that are used for making the ethical decisions’ making in the business houses.
Certain approaches like utilitarian, virtue ethics, Deontological ethics and lastly Kantism
ethics (Tenbrunsel, & Smith‐Crowe, 2008).
In utilitarian approach, ethical actions produces the greatest good and does least
harm for all the clients, stakeholders, colleagues and the entire community. In this approach,
everyone deals with the consequences and tries their best for both- to increase the good done
and to reduce the harm done. In this, the decisions making done within the business house
will be fair enough because it that kind of approach which thinks of both the harm and the
goodness of the individuals (Ethics unwrapped, 2018a).
Deontology ethical theory determines that what is ethically right which is more
significant that what is for the larger good. In this theory people’s right are the most
imperative over their body, labour and talent. It is the duty-based ethics. In this, they give
emphasis on giving equal respect to all human beings. However, in decision making concern,
there is a high degree uncertainty to ethical decision making because the future is
unpredictable (Ethics unwrapped, 2018c).
In virtue approach, ethics focuses on attitude or character traits that enables to an act
that develops the individuals highest potential likewise, honest, courage, compassion,
generosity, integrity, fairness and lastly, self-control. Virtues are like habit when once it is
being acquired it becomes characteristics of a person. Hence, there major focus is on
attitudes, dispositions and the character traits that help in developing the human potentials. In
business decision making concern this kind of approach to ethics are the best approach
because it highlights the moral virtues that assist in making the ethical decisions in
organisations (Ethics unwrapped, 2018b).
Can an ethical business be a profitable business?
Business ethics displays the appropriate business guidelines and practices regarding,
resolving the controversial issues like corporate governance, insider trading, subornation,
discernment, corporate social responsibilities. Law often directs the business ethics, while at

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the other time business morals provides the basic outline that businesses implements to gain
public acceptance.
Normally, it is not much difficult to attain profits if a business works with ethics.
Ethics makes business to lead a correct pathway, which turn out to be profitable. Yet, in
business terms, what is ethically right does always negatively affects the does not contributes
towards profits. For example, in business to make deal employees have to take bribe and if
they have not done so far this will automatically affects the business profits. However, ethics
may not be well-suited with the short-term returns but in an long run a company do chase for
both ethics and profits (Horton, 2018).
According to the question that weather the ethical business be a profitable business,
answer is yes! Because due to ethics employees are more productive, employees are less
likely to leave the organisation, customers respond more actively and positively to
organisation. Moreover, it was analysed that the vendors and the other suppliers prefer to deal
with those companies, which are ethical strong and the ethical companies attract those
companies, which have higher talented executives and employees. All the above factors
highlights that ethical companies are more profitable (Parrish, 2016).
Nevertheless, in some of the companies’ cases, it was seen that due to the usage of
unethical practices they earned many profits. Just like the WorldCom, it was a long distance
discount service company. The truth behind the scandal within a company was the
unrealistic financial targets and inability to meet them. When all the scandals were scanned,
other got to know that WorldCom use to hide it expenses, inflate its cash flows and reports
profits instead of losses.
Similarly, the Bhopal gas tragedy played many unethical practices. Besides many
given warning they have not changed their unethical behaviour towards the society and
hence, by the use of the unethical aspects they never earned a good amount of profits. Hence,
this leads to the closure of the company. Another company Asbestos poisoning company, the
main reason behind their liability was a continuous increase in claims by victims who were
suffering from the mesothelioma, it was an uncommon form of cancer, which was mostly
affecting the lungs, and it was specifically caused by the asbestos experience. Due to all this,
the company has to suffer a loss of those who were bearing that a problem, which was, arises
out of that disease.

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Lastly, the Enron scandal, the company’s failure in 2001 signifies the biggest business
insolvency, because there was a moral failure within an organisation. In this, the charismatic
leaders sought of express at the expenses in their community and their employees. At the
completion, those erroneous morals destroyed the company and damaged the entire
organisation employees who had gone for the same ride (Dsouza, 2017).
Hence, all the above discussion shows that none of the company gets successful if
they use unethical practices to earn more profits. Hence, every business first responsibility is
to endure profitability and produce income for the stakeholders and the people. No business
can be great, strong or wealthy if it works with the unethical practices. So at last, business
needs to endure ethical for its personal good. Unethical judgments may produce profits only
for short period. Therefore, for the better and the long run presence and continuous
effectiveness of firm, business needs to behave itself ethically and to track its activity on
ethical lines. Doing so ethical organisation will continue to survive and grow in their profits
whereas the unethical organisation will quickly diminishes.
References
Dsouza, S. (2017). Importance of business ethics for profitable business. Retrieved from:
https://medium.com/workethics/importance-of-business-ethics-for-profitable-
business-3ed5de0083b
Ethics unwrapped.(2018a) Utilitarianism. Retrieved from:
https://ethicsunwrapped.utexas.edu/glossary/utilitarianism
Ethics unwrapped.(2018b). Virtue Ethics. Retrieved from:
https://ethicsunwrapped.utexas.edu/glossary/virtue-ethics
Ethics unwrapped.(2018c). Deontology. Retrieved from:
https://ethicsunwrapped.utexas.edu/glossary/deontology
Ho, D. (2015). Making ethical progress without ethical theories. Retrieved from:
https://journalofethics.ama-assn.org/article/making-ethical-progress-without-ethical-
theories/2015-04
Horton, M. (2018). Are business ethics are important for profitability?. Retrieved from:
https://www.investopedia.com/ask/answers/040715/how-important-are-business-
ethics-running-profitable-business.asp

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Parrish, S.(2016). The profit potential in running an ethical business. Retrieved from:
https://www.forbes.com/sites/steveparrish/2016/02/04/the-profit-potential-in-running-
an-ethical-business/#16b5cef67687
Tenbrunsel, A. E., & Smith‐Crowe, K. (2008). 13 ethical decision-making: Where we have
been and where we are going. The Academy of Management Annals, 2(1), 545-607.