Ethics in Business: A Comprehensive Analysis

This study delves into the realm of business ethics, exploring its significance in contemporary business practices. It examines ethical issues, analyzes organizational ethical behavior using Sethi's typology and Mintzberg's Conceptual Horseshoe, and investigates the ethical decision-making process within a business setting. Through real-world examples, the study highlights the importance of ethical considerations in shaping corporate conduct and achieving sustainable success.

ETHICS IN BUSINESS
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Table of Contents
Introduction................................................................................................................................3
LO1............................................................................................................................................4
LO2............................................................................................................................................6
Conclusion:..............................................................................................................................10
Reference List:.........................................................................................................................11
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Introduction
Business ethics can be defined as the philosophy that the business should follow while
operating in a particular area. Ethical ideologies are the foundations to present with a range of
corporate precedence further than the old methods of business to earn a better turnover or the
enhancement of the stakeholders. This study will be highlighting on the ethical concerns
relating to the industry and comprehend the progression of ethical decision making for the
advancement of the organization. The Sethis’ typology and the Mintzberg’s conceptual
horseshoe framework are also explained in this study.
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LO1
Understand ethical issues relating to business
1.1 Discuss what is meant by ethics in business with reference to three examples.
Ethical ideologies are the fundamentals for the diverse contemporary ideas for the activities
of the business. These aids in expansion of the individual are as well as the company
precedence away from conventional businesses ideas, and run after the profitability and
stakeholder’s enhancement (Crane and Matten, 2016). Ethics of the company is the conduct
that complies with the set of laws and regulations, which consist of the individual’s viewpoint
and societal qualities for the enhancement of the business. Ethics in trade requires obedience
that inspects good and bad movements within the organization and assists the employees to
function properly. The ethics governing the company consists of a set of rules that the
business has to abide and the employees have to follow. To strengthen the ethical practice, it
is vital to develop a scheme to understand the rights and wrongs in the conduct of the
company and the employees (Ferrell and Fraedrich, 2015).
Corporate Social Responsibility
Corporate social responsibility (CSR) is the premeditated pledge of the businesses to include
a set of corporate activities such as economic, communal and environmental, which are not
bordered by the parliamentary laws, and are allied to a broader range of the community and
the stakeholders (Bowie, 2017). Corporate social responsibilities function as an integral, self-
governing instrument whereby an industry watches and guarantees its vigorous acquiescence
with the strength of the law, moral principles and the global norms. CSR helps to build a
strong relationship between the customers and the company as these policies helps to
safeguard the conditions of the community, in turn increasing the sales of the company. For
instance, Marks and Spencer’s has a special policy for the CSR named Plan A, 2020. There is
a tendency in UK that the customers prefer a company, which is community and environment
oriented. It had been seen that a large number of consumers were buying goods of Marks and
Spencer in respect to the other companies to show their support towards the community
(Trevino and Nelson, 2016).
Good Conduct in international expansion
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Good conduct in the business activities is the main factor for the attainment of the goodwill
of the company. This rapport with the customers is very important to survive in the market
and this acts as a direct link to earn a higher level of profitability. For any company to
conduct businesses in the global market must have to possess a set of ethics (Shaw, 2016). If
the company wants to be successful in the international markets, the company must preserve
the culture and traditions of the country and take steps to avoid any effect in the cultural
development due to the operation of the business in that country. Moreover, the company
must also adopt new schemes for handling the different legal and regulatory barriers. Steps
should be taken to observe the employment needs and the labour laws. The duties, treaties,
restrictions, corporate practices, custom laws, tax laws and liability provisions should be
adhered by the company for its expansion in the international market. Additionally, the
stability of the local government and its authority is also important for a business to spread its
operations in the overseas. These aspects includes the current currency rates, access to the
raw materials, immigration and employment laws, communication and the transportation
options. For example, the company Tesco has developed a set of norms for the overseas
branches, which has helped to increase the base of the customers all over Europe (Weiss,
2014).
Treatment to employees
The treatment of the employees can be one of the factor that determine the survival of the
business. A better treatment of the employees can bring about innovative ideas among the
employees and that can be a huge factor for the development and efficiency of the employees.
Moreover, this bring about a sense of motivation among the employees and thus the
employees offer a better and an effectual service to the company. Ethical treatment of the
employees is broad idea and this includes providing the fair work surroundings of the
employees and paying them reasonably. Impartiality and good conduct helps in better
feedbacks. For example, McDonalds had been earning huge profits for the recent years but
had a bad working culture. Unethical work conditions and very low pays had created a
culture of distrust and increase in overheads in this company. Thus, the company had
developed a policy of “better work better pay” which had helped them to cut down the
overheads but also motivated the employees for work.
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Figure 1: Ethics in business
(Source: Created by the author)
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LO2
Understand the process of ethical decision making
2.1 Analyse an organisations ethical behaviour using:
a) Sethi’s typology b) Mintzberg’s Conceptual Horseshoe
Sethi’s typology put forward a four-step model with the purpose of adapting corporate
behaviour for the societal needs. The four steps of Sethi’s model are explained below:
Social obligation
The actions of these companies are determined by the firm’s reaction to the market forces and
lawful limitations. These sectors comprise of certain behaviour to the society in response to
the intensity of the market and the lawful restrictions of the same (Ferrell and Fraedrich,
2015). The businesses, which can be summarised under this typology, execute social deeds
since they are bound to pursue the policies and put into operation by that particular country’s
government. These companies tend to only work when the government passes a act for the
development of the country or of the area relating to the environmental safeguarding and the
other social conditions. These companies rather neglect the responsibility to the society until
these acts are formulated.
Social responsibility
This sector takes in corporate conduct conformities with the social principles, models,
potentiality and principles. The businesses, which come under this typology, are very socially
active and provide social help on their own for the betterment of the society and these
organizations do not have any type of restrictions. These types of organizations also
implement a tactical posture, looking forward to the futuristic transformations of the market
due to the communal significance and lead the way for the different changes (Iphofen, 2016).
These companies are very active toward the society and always takes care that the business
operations are affecting the society or not. This attitude helps to gaining more customers as
most of the customers wants to support the companies that are dedicated to the society and
the environment.
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Social Responsiveness
This sector consists of what is obligatory for the organization and the society. It is not
essentially how the business would respond to the communal stress, but can be able to
prohibit the bad circumstances and anticipate the advantages the company is going to face in
the newer future. The businesses falling beneath this typology must be capable of noticing the
influences that these are going to have on the society for the later periods. It is not essential
for them to reply to the demands of the communal responsibilities (Heyler et al., 2016).
These firms conform or become accustomed to communal norms before being obliged to do
so.
Social Irresponsibility
This sector comprises of what is obligatory for the organization in respect to the society.
These organizations do not take any initiative for the development of the society. The
businesses falling beneath this typology does not notice the authority and these do not look
forward for the betterment of the company in near future.
Figure 1: Sethi’s Typology
(Source: Shaw, 2016)
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According to the different typologies described above the organizations must be analysed for
finding out the ethical behaviour towards the society. This assist any company to look after
the social responsibilities and the company must look at these actions as a charity to the
welfare of the people keeping in mind the principles, norms, values and the expectations
(Hartman et al., 2014).
Mintzberg’s Conceptual Horseshoe
Mintzberg’s Conceptual Horseshoe can also help to analyze the behaviour of the
organizations.
 Democratize the behavior in which the goals of the business are lingering by
altering the authority, which sanctions diverse groups to be included in the
administration.
 Pressurize or Force the actions in which transformations takes place during enforced
operations by the awareness groups.
 Ignoring the actions in which accomplishing the social objectives by the business to
formulate profits for the organization.
 Re-establishing or restoring the behaviors in which the business is absolutely
underneath the power of the proprietors, shareholders and the individuals who are
concerned in monetary goals (Lewis and SIU., 2015).
 Inducing the actions embrace the management to distinguish the disagreement
between the economic and social objectives, in which the fiscal objectives are
accomplished and the communal objectives are attended.
 Trusting the actions by upholding equilibrium amid communal and fiscal objectives
as the directors consider it their righteous responsibility to be answerable in any
circumstance
 Regulate the actions in which the administration has a fundamental and dignified
responsibility for determining the behavior of the business.
 Nationalize the behavior by which the government commands over the business and
determines the activities of it.
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2.2 Using two examples, analyse and evaluate the ethical decision making process within
a business setting.
Ethical decision-making is a subconscious process that thinks about a variety of moral
principles, regulations, and the qualities or the preservation of relations to steer or evaluate
personality the group judgments for future performances (Voegel, 2016).
Figure 2: Ethics in decision-making process
(Source: Iphofen, 2016)
The ethical decision making process can be divided into many stages. Firstly, the
business needs to describe the problem. For example, if a company launches a new product
then the different problems must be determined. Marks and Spencer’s is launching a new
product and it has noticed an increase in the overhead costs. So the company needs to take
this point as a problem. In the next stage, the company must find out whether this is a ethical
issue or an ethical dilemma. After determining its gender, the company must rank the key
values and the principle. Then the company must gather information and review the code of
ethics. Likewise, the company must also follow the following steps and determine the code of
ethics. Then the important step of determining the different options comes. In this, the
company has to develop the options for resolving the issues faced. After the options are
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created, then the company must select a course of action and formulate a plan for it. Lastly,
the results are to be evaluated. Marks and Spencer must then gather information on how the
issues can be resolved and then determine the code of ethics in respect to the code of ethics.
Then the company must take steps for reducing the overhead costs and put forward a plan to
resolve the same. Then the results must be evaluated whether the issue is still existing or not.
Likely, Tesco has introduced a new technology and does not know whether the use of this
will be effective. Thus, after determining the issue must be ranked. Let’s take for this
example that the company is facing increased costs and does not have enough manpower for
its implementation. Then the company must gather required information and recruit a person
who can use that and bring it into practice. Then the company must continue for some days
and evaluate whether the issues are resolved or not.
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Conclusion:
Form the above study it can be concluded that principles in trade plays a fundamental role as
it places some boundaries to the appalling behaviour of the workers in the business and the
surroundings inside the organization. Ethics in business engross discipline and restriction that
scrutinizes superior and horrific exercises for the applicable circumstances of a righteous
responsibility. Honourable conduct is the performance that is ethically good and bad.
Business ethics engages preparation and performance that are ethically good or bad for the
survival and the business.
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Reference List:
Bowie, N.E., 2017. Business ethics: A Kantian perspective. Cambridge University Press.
Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press.
Ferrell, O.C. and Fraedrich, J., 2015. Business ethics: Ethical decision making & cases.
Nelson Education.
Ferrell, O.C. and Fraedrich, J., 2015. Business ethics: Ethical decision making & cases.
Nelson Education.
Hartman, L.P., DesJardins, J.R. and MacDonald, C., 2014. Business ethics: Decision making
for personal integrity and social responsibility. New York: McGraw-Hill.
Heyler, S.G., Armenakis, A.A., Walker, A.G. and Collier, D.Y., 2016. A qualitative study
investigating the ethical decision making process: A proposed model. The Leadership
Quarterly, 27(5), pp.788-801.
Iphofen, R., 2016. Ethical decision making in social research: A practical guide. Springer.
Lewis, L.F. and SIU, W.S., 2015. Corporate Entrepreneurship and Ethical Decision-Making
of Marketing Managers. In Proceedings of the 1997 World Marketing Congress (pp. 646-
655). Springer, Cham.
Shaw, W.H., 2016. Business ethics: A textbook with cases. Nelson Education.
Trevino, L.K. and Nelson, K.A., 2016. Managing business ethics: Straight talk about how to
do it right. John Wiley & Sons.
Voegel, J.A., 2016. AN EXPLORATORY EXAMINATION OF THE ETHICAL DECISION
MAKING PROCESS OF ENTREPRENEURS THROUGH THE THEORY OF PLANNED
BEAHAVIOR LENS: A POLICY-CAPTURING APPROACH.
Weiss, J.W., 2014. Business ethics: A stakeholder and issues management approach. Berrett-
Koehler Publishers.
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