(Solved) Business Ethics - PDF

Business Ethics

TABLE OF CONTENTS
Introduction......................................................................................................................................1
LO 1 Understand different ethical perspectives..............................................................................1
Background and development of theoretical ethical approaches................................................1
Contrast absolute and relative ethics...........................................................................................2
Impact of ethical issues on operational activities........................................................................3
LO 2 Understand business objectives..............................................................................................4
Impact of ethical consideration on the business objectives.........................................................4
Implications to AstraZeneca and its stakeholders to operate ethically........................................5
Recommendations............................................................................................................................6
Conclusion.......................................................................................................................................7
References........................................................................................................................................8

Introduction
Most of the companies are concerned about the impact of their activities on the business
environment. The business ethics involves corporate social responsibility and the ethics related
to accounting practices, human resources, marketing etc. The purpose of this study is to learn the
concept of business ethics and to analyse its relevance while considering goals and
responsibilities. It will identify the ethical issues which can have an impact on the operational
activities of the business.
LO 1 Understand different ethical perspectives
Background and development of theoretical ethical approaches
Different types of theories have been developed with regard to business ethics. These can
be described as follows:
Deontology Theory – The theory of deontological states that the results of the actions are
not so important. The theory was developed by Immanuel Kant. It was proposed that duties must
be followed in appropriate manner while taking the decisions (De George, 2011). The thing
which matters are the activities, which are justified on the moral basis or not. The theory has
highly been used to frame the contents of ethical books over the years. It judges the morality of
the actions on the basis of rules and regulations. For example, adopting predatory pricing
(extremely low pricing), in order to drive the competitors out of the market is illegal. Breaking
the moral principles is very incorrect.
Teleogical theory of Ethics - This theory mainly emphasize on the consequences. It
states that in order to achieve best results, there is a need to adopt the best actions. Over the years
it has been developed as a theory of morality that derives duty or moral obligation from what is
good or desirable as an end to be achieved. There is a difference on the nature of the end that
actions ought to promote. For example a company is required to develop an ethical decision
framework in order to achieve the desired results (Trevino and Nelson, 2010). All activities are
to be managed in careful manner.
Consequentiality theory – This theory states that consequences of one’s actions are the
ultimate basis for making any judgement about the right or wrong. The results could be good or
bad or either favourable or non-favourable. An ethically right activity is the one which produces
good results (Rossouw and Van Vuuren, 2013).
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Contrast absolute and relative ethics
Absolute ethical theories
Kant and the Categorical Imperative
Kant states that one should act according to the rules. The universal laws are established
for all. These laws are absolutist and should be work out in logical manner. The consequences of
company’s actions are irrelevant to whether they are right or wrong (Weiss, 2014). Sometimes
bad actions may have unintended good consequences. It might work beneficially without
knowing that the results may be good. For example AstraZeneca is committed towards delivering
consistently high ethical standards of sales and marketing practices worldwide. In that regard, it
settled a qui tam lawsuit for about $520 million in order to settle allegations that business
conducted fraud in Medicare, Medicaid and other government funded health care programs
(AstraZeneca, 2016. About us. 2016). It was realized that company adopted faulty marketing and
promotional practices for one of its product
Natural Law
This approach leads to a set of rules which are to be followed by AstraZeneca. These
rules are absolutist because they are of no exception. For example, in the year 2010, the company
agreed to pay a sum of £505 million to settle a UK tax dispute related to the transfer mispricing
(AstraZeneca, Investor Relations. 2016). It violated the law despite of knowing that doing
manipulation with the pricing is illegal. Hence the natural law always remains the same for
everyone and it must not be comprehended.
Relative ethical theories
Situation Ethics
This theory must not be confused with cultural relativism. Cultural relativism is a weedy
moral theory stating that things are right and wrong relative to the culture. Hence situational
ethics states that whatever is right and wring is relative to the situation (Hoffman Frederick and
Schwartz, 2014). For example AstraZeneca is required to ignore the rules in order to do the right
thing. The actions are to be taken in the best interest of the affected people. The theory proposed
that rightness of the activities are judged through the end of them. The end provides justification
behind all the actions.
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