Importance of Ethics in Business: Challenges, Codes of Conduct, and Ethical Moral Philosophy

This report discusses the importance of ethics in business, ethical challenges, codes of conduct, and ethical moral philosophy. It also provides recommendations for companies to handle ethical issues.

Running head: REPORT 0
PERSONAL AND MANAGERIAL EFFECTIVENESS
JULY 22, 2018
STUDENT DETAILS:

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Executive Summary
The business ethics is defined as the principles of conduct from which moral, beliefs and
acceptable decisions and activities are based. There are many ethical issues arise in the
organisation. These ethical challenges highly affect the operations and affairs of business.
There are different ethical codes of conduct and ethical moral philosophies are exist to direct
ethical behaviour and to resolve the ethical challenges in the organisation. There are various
consequences for a business and the employees to operate ethically.
In this report, the concepts of ethics have been explained in detail with the help of various
examples.

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Table of Contents
Executive Summary...................................................................................................................1
Introduction................................................................................................................................3
Literature review........................................................................................................................3
Discussion and analysis..............................................................................................................5
Conclusion..................................................................................................................................8
Recommendations......................................................................................................................8
References..................................................................................................................................9
Appendix..................................................................................................................................11

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Introduction
Ethics concern a person’s ethical decisions about what is wrong and what is right. Ethical
behaviour does not make focus on what is right for oneself. It focuses on what is right for
others. The decisions may be taken by the particular group or a person. The personnel should
choose what they think is right action. The ethical behaviour is acceptable at all the stages to
the greater community. Ethics play a critical role in the business world but there are many
issues related to the business ethics presently perceived by the market analysts. It is required
to keep inform the personnel about the matters that affect them. The immoral decisions to
resolve the challenges may influence the goodwill of an organisation so decisions should be
taken ethically.
In this report, importance of ethics, business ethical issues, and ethical challenges, and
contribution of ethical moral philosophy is discussed and critically examined.
Literature review
This research study is connected to the literature review, which is attained to determine the
research subject with relating the different theories. The researcher allows to cover an
analysis of existing information related to the research matter, and determine that at what
level it has been revealed until the date. For this, books, articles and journals are considered,
which also help in developing the conceptual understanding about the research matter. It is
also effective for the researcher to identify the knowledge gap, as well as improve the basis
for accepting main research approaches (Susan and Audrey, 2007).
The literature review relating to the ethics in business is accompanied analysing the books
and journals about business ethics and their connection to leadership, administrative decision-
making, corporate social responsibility, and managerial decision-making. From the past time,
many projecting organisations have distorted because of corporate scandals. It led not only
loss of workers from the organisations but it also resulted into financial losses of many
stakeholders. This falling effect to immoral behaviour by the administrators of company led
to increased potentials from company’s stakeholders. There are many ethical corporations
such as Guardian Media Group and UK Conservative Party, which provide detailed studies to
manage ethical challenges worldwide. It is expected by the management of company is to

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complete the targets morally and legally. It is also expected by the company to apply ethics
within the organisational framework and organisational culture. (Marian, 2007).
The applied business ethical methods and procedures will help the companies to resolve the
ethical challenges and issues. They permitted the business to form a strong ethical base,
which will eventually benefit the organisation through increased customer and satisfaction of
workers. It may result in increased benefits and profits, organisational sustainability and the
public image. The literature review related to business ethics discloses the impacts on
describing the business ethics, understanding about how ethical management is used to apply
morals in the companies, recognising how the ethics is combined into the organisational
framework. Finally, it analyses the advantages of functioning an ethical business. The review
of literature review discloses that institution of strong ethics in an organisation is possible
from strong ethical management, proper framework, laws, rules, and regulations (Homann,
Koslowski and Luetge, 2013).
It is analysed through this current literature review is that business ethics is a division of
implemented ethics as it is related to different business actions of a person. Being able to
know and apply best ethical philosophies into the business setting is base to establishing a
solid organisational framework nurtured by the ethical philosophies. Generally, there are two
types of ethics such as individual ethics and organisational ethics. Correctly understanding
the connection between these two types of ethics is critical to know that how solid business
ethical beliefs could be successfully implanted into an environment of company. The
individualistic ethics help to understand what is wrong and what is right from the point of
view of their parents, teachers, religious education, or experiences of life. The organisational
ethics or corporate ethics helps in sharing the decision-making and action in that company. .
The culture of a company describes the behaviour patterns of the workers. The study stated
that there is an important connection between organisational ethics and individual ethics
(Moon, 2014).
The managerial ethics is one of significant part of the business, which refers to the
judgements, activities, and behaviours of managers. Many managers believed that if they are
not doing unlawful thing, then it means that they are acting morally. It is required by the
management of company to understand the distinction between ethical standards and laws. If
they have good understanding about ethical behaviour, then managers can focus on taking the
right ethical decisions for the company (Lordanou, Hawley and Lordanou, 2016).

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The connection between laws and ethical standards states that law is rule of behaviour set by
a main authorising body which may either allows or restricts the person or group from
functioning some activities. If someone fails to comply with the laws, rules and regulations,
then it may result in punishments such as fine and sentence. It is not unusual for the person to
consider that if they are working as per the law, rules, and regulations, then they are acting
morally. Many actions may be permissible but not ethical. It is necessary for the
administrators to understand the connection between laws and ethics to apply the ethics
within the company (Kultgen, 2010).
The managers of company are usually aware about the laws, rules, and regulations because
they know the consequences of failure, which may result in punishment, where ethical
standards are socially interpreted. It is not always necessary that failure to comply with these
standards will be result in the punishment under federal sanction or state sanction. It is stated
that the ethical standards do not create fixed points for the management of the organisation
because these ethical standards usually change as per the time and the conditions. These
ethical standards regularly are not constant because they are publicly interpreted (Tricker,
2015).
It is a duty of manger to make decisions. These decisions do not only affect an individual but
also the company as well. The best ethical decision plays a significant role in the success of
an organisation. The poor ethical decision taken by the management may the reason of
intense consequences for the people. The managers of a company are highly affected by
ethical values, moral, beliefs, experiences, ethical standards, policies, and process recognised
in the company. It is not an easy task for the management to take the ethical decisions on the
regular basis. The managers of organisation always face ethical issues and challenges in the
organisation. The solution of these ethical dilemmas is required to be made as per the ethical
values (Zientara, 2017).
Discussion and analysis
The ethics is integrated part of business. It is essential part of the success of any organisation
to treat the stakeholders justly and equally. An innovative and well- managed plans and
programmes related to corporate and social responsibility is for the all stakeholders of
company such as customers, dealers, investors, and workers. The ethical behaviour of an
organisation is directly linked to long-term profits and short-term profits (Dracopolou, 2006).

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There are many important advantages of the ethical behaviour to a company. It helps to
attract the customers towards the various products of the company. It helps in increasing the
turnover and benefits of the organisations. The good ethical behaviour makes the worker to
stay in the company for longer period. It helps in increasing the productivity and decreasing
the labour turnover. The ethics helps in reducing the employment cost. It attracts more person
to work as the employees in the company. It also helps in attracting the investors towards the
company. The increasing number of investors look for the company of good ethical values to
make investment. The good ethical behaviour keeps the share price of organisation high. It
also secures the business from purchase or takeover (Pullen and Gray, 2006).
A company driven by the ethics is valued by its personnel. They are common thread, which
takes the workers and decision taker on the same level. In a company, decisions are
determined by ethical values. Ethics succeeds law in securing the society. The law plays a
role as mute observer. The law is not able to give protection to the society and the
environment. The advocates cannot help a good deal but ethics may help. Ethics forms a
sense of right and wrong in the company. The ethics may save companies from destroying
environment in the situation where law fails. In the organisation, sometimes some situations
arise when action will be ethically right and not right to perform as per the law. For example,
it is legal for the company working in the loss to suspend some personnel from the company
to stand itself. However, ethically it is wrong to do so because it is difficult for the workers to
survive. On the contradiction, the actions made cannot be legal but ethically right (Carroll
and Buccholtz, 2014).
The ethical values based challenges or issues in the company are not so easy to handle in the
situation where workers have options to choose what is right and what is wrong as per their
principles. The managing ethical challenges require a stable and vigilant approach to issues,
which can possibly be risky or unlawful. It is required to handle the ethical issues that
management and employees of the companies should have knowledge of law. There should
be law related to whistleblowing and public policies. Such as, under the Texas Whistle
Blower Act, the workers of public sector may be liable for the damages if a worker involves
in reactive activities on the basis of worker, who in good faith, makes a complaint in respect
of business ethics. This act provides a right to the personnel of the company to sue for the
damages and the other remedies (Jamnik, 2017).

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It is necessary to form a workplace policy on the basis of targets, approaches, and code of
conduct of an organisation. The performance management programmes make the employees
liable for their activities. The workers handbook should be revised to involve the policy and
render the copies of revised worker’s handbook. The company should take the
acknowledgement forms to be signed by the workers. The signed acknowledgement forms
state that the workers of company understood the business ethics policy. To avoid ethical
issues, the training should be provided to the workers of company. The various instruction
processes should use to specify and resolve the ethical challenges and issues in the company
(Horner, 2014).
There are many effective ways to give the business ethical training to the workers of
company such as role-pay and experimental learning. The misuse of funds of company and
unhealthy relationship between workers and management are the example of major ethical
issues. There should be healthy and positive relationship between the workers and company.
It is also required to implement the business policy in the company on the regular basis at the
time of specifying the workplace issues. The workers of the organisation should concern
about the business ethics. The company should have approach to consider the every issue or
challenge with equal interpretation of the policy of organisation (Baker and Maier, 2016).
The ethics also refers as moral philosophy. The ethical moral philosophy includes the
protecting, structuring and mentioning theories of right behaviour and wrong behaviour. The
ethical moral philosophy develops the understanding of values and beliefs. Ethical moral
philosophy is a basis of values and features, which permits to take ethical decision. It helps
the managers to know and understand their own personal values and the professional values
and how there are different from the values and principles of others. Every individual follows
different ethical moral philosophy and various views and ideas about the procedure to specify
different ethical issues. It is a base of ethical behaviour and decision-making. Without
following ethical moral philosophies, the morals of any person could definitely be cooperated
(Morrison, 2015).
The ethical moral philosophy determines the responsibility of organisation and towards the
organisation. It gives the answer to the question of what should do. It makes possible for the
organisation to resolve the ethical issues in easy way. The comparison between personal
ethics and organisational ethics relates to similar morals, principles, and beliefs in the both
cases. The personal ethics and organisational ethics form a base. In case of corruption in

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either zone, it will badly affect the other zone. It is required by all to develop strong personal
ethical basis and professional ethical basis on the basis of ethical moral philosophy. The
ethical moral philosophy helps in increasing the personal effectiveness and organisational
effectiveness (Schwartz, 2011).
Conclusion
As per the above discussion, it is concluded that the companies are facing the ethical
challenges or issues regularly and the leaders are enticing to exchange the ethical behaviour
for more earning and powers. The number or person continue to be disgusted by large and
powerful companies that have distorted and fallen because of fraud or corporate scandal. This
has led the call of business ethics in the workplace. Thus, the business ethics helps the
organisation to fulfil the expectations and desires of the external stakeholders. It also helps to
recover the trust and confidence of the external stakeholders and the personnel of
organisation.
Recommendations
As per the literature review, it is recommended to make the focus on understanding of effects
of strong ethical leadership in the company and way of affecting the organisational
framework. It is necessary to recognise the appropriate process for establishing and
sustaining solid effective leadership ethics in the organisational framework because ethical
leadership is a foundation of assimilating ethical behaviour. The company should form the
shared value among the company, society and the stakeholders by the corporate social
responsibility initiatives.

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References
Baker, M., and Maier, C. (2016) Ethics and the curriculum: critical perspectives. Oxford:
Oxford University.
Carroll, A. B., and Buccholtz, A. K. (2014) Business and Society: Ethics, Sustainability, and
Stakeholder Management. 9th ed. Boston, MA: Cengage Learning.
Dracopolou, S. (2006) the ethics and values in healthcare management. Oxford: Routledge.
Homann, K., Koslowski, P., and Luetge, C. (2013) Globalisation and business ethics. United
Kingdom: Ashgate publishing ltd.
Horner, D. (2014) Understanding media ethics. California: Sage.
Jamnik, A. (2017) The Challenges Of Business Ethics: The Basic Principles Of Business
Ethics - Ethical Codex In Business. [online] Available from:
file:///C:/Users/System04100/Downloads/RIC_volume_3_issue_3_Anton_Jamnik%20(1).pdf
[Accessed 05/06/2018].
Kultgen, J. (2010) Ethics and professionalism. Philadelphia: University of Pennsylvania
press
Lordanou, L., Hawley, R., and Lordanou, C. (2016) Values and ethics in coaching.
California: Sage.
Marian, Q. (2007) Encyclopedia of information ethics and security. Cambridge: Cambridge
university press.
Moon, J. (2014) Corporate Social Responsibility: A Very Short Introduction. New York:
Oxford University Press, p. 3.

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Morrison, J. (2015) Business Ethics: New Challenges in a Globalised World. London:
Palgrave Macmillan, p. 226
Pullen, S., and Gray, C. (2006) Ethics, Law and the veterinary nurse. Oxford: Elsevier
Butterworth Heinemann.
Schwartz, M. S. (2011) Corporate Social Responsibility: An Ethical Approach. New York:
Broadview Press.
Susan, M., and Audrey, L. (2007) Ethics: Contemporary challenges in health and social
care. United Kingdom: The policy press.
Tricker, B. (2015) Ethics : Principle, Policies and Practices. 3rd ed. Oxford: Oxford
University Press.
Zientara, P. (2017) Socio emotional Wealth and Corporate Social Responsibility: A Critical
Analysis. Journal of Business Ethics, 144(1), pp. 185–186.

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Appendix
The concept of ethics generally based on culture of society. The philosophy of ethics is
deeper than it seems on the external level. It has three categories such as normative ethics,
applied ethics, and Meta ethics. The normative ethics deals with content of moral judgement.
It explains and analysis the questions that spring up while seeing how to act in various
conditions. The applied ethics analyses the norms that set the method of person is supposed to
or permitted to behave in following situation. It explains various subjects such as animal
rights and nuclear weapon. The meta-ethics helps to know the concept of right and wrong. It
focuses on the origin and basic meanings of moral principles.