Business Ethics: Analysis of Ethical Practices in Business Settings

This report delves into the realm of business ethics, commencing with an introduction to the subject and its significance in the corporate world. It explores ethics in business through real-world examples, focusing on companies like Volkswagen and Ford, and analyzing ethical frameworks. The report examines ethical behavior using Sethi’s typology and Mintzberg’s conceptual horseshoe, providing insights into interpersonal, informational, and decisional roles within organizations. Furthermore, it analyzes and evaluates the ethical decision-making processes within a business setting, highlighting key elements such as leadership, values, integrity, loyalty, and concern. The report concludes by outlining steps to reach ethical decisions, emphasizing the importance of recognizing ethical issues, gathering facts, evaluating alternative actions, and making responsible choices to foster a culture of ethical conduct.

Business Ethics

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Ethics in business with reference to three examples.............................................................1
TASK 2............................................................................................................................................3
2.1 Organisations ethical behaviour using Sethi’s typology and Mintzberg’s Conceptual
Horseshoe....................................................................................................................................3
Interpersonal roles :................................................................................................................4
2.2 Analyse and evaluate the ethical decision making process within a business setting...........5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Ethics is a branch of social science. It deals with moral principles and social values. It
helps us develop the rules and principles (norms) by which we judge and guide meaningful
decision-making. Business ethics, also called corporate ethics, is a form of applied ethics or
professional ethics that examines the ethical and moral principles and problems that arise in a
business environment (Crane and Matten, 2016). It can also be defined as the written and
unwritten codes of principles and values, determined by an organization’s culture, that govern
decisions and actions within that organization. It applies to all aspects of business conduct on
behalf of both individuals and the entire company.
TASK 1
1.1 Ethics in business with reference to three examples
Business ethics provide a basic framework for doing business. It gives the social cultural,
economic, legal and other limits of business. Business must be conducted within these limits. :
Business ethics is based on moral and social values. It contains moral and social principles
(rules) for doing business. This includes self-control, consumer protection and welfare, service to
society, fair treatment to social groups, not to exploit others, etc. Businessmen must be given
proper education and guidance before introducing business ethics. The businessmen must be
motivated to use business ethics (De George, 2011). They must be informed about the
advantages of using business ethics. Trade Associations and Chambers of Commerce must also
play an active role in this matter. Volkswagen and Ford are the leading auto mobile corporate
associations who operates at global level; both organisations highly focus all ethics and standards
so as to maintain their credibility at workplace.
Any effective ethics policy forbids abusive behaviour in your workplace. This kind of
behavior can take many forms. Employees might engage in sexual harassment, bully other
workers, tell inappropriate or offensive jokes, display pornography on their computer screens or
steal from co-workers or the company. Your ethics policy must explicitly state that all such
actions are forbidden at work. It also needs to spell out the punishments or repercussions of such
actions.
Integrity
Being ethical in business means maintaining a high level of personal integrity. This is
how you earn the trust of others, whether they are your customers, team or your superiors. In this
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definition integrity means having a consistent character that is demonstrated by an alignment of
your thoughts, words and action. Sometimes it requires you to have moral courage to do the right
thing, and it takes inner strength to live up to mistakes and admit when a fault has been made.
Despite a great pressure to do otherwise, ethical business managers live by a moral code they
believe in, principles to maintain and they fight for their beliefs – without sacrificing their honor
for the sake of just getting a job done.
Honesty
It is essentials for the managers of Volkswagen and Ford to be honest in all of their
actions, and every communication you make. When people see making honest decisions, they
start to trust your company because you’re not only being truthful, you’re being upfront and
candid. People appreciate the fact they can take you at your word, as customers only ever do
business with those they trust. Being an ethical executive means you do not deceive others by
misrepresenting the facts, overstating and exaggerating or only giving partial truths (Fassin and
et. al., 2011). If you’ve inadvertently given the wrong impression, provide the relevant
information to your customers and correct their misunderstanding as soon as possible.
Loyalty
Managers need to be loyal to both companies and teams, while operating within a strong
moral compass. If they demonstrate loyalty it builds trust, and shows that you place a high value
on advancing the interests of both the company and your colleagues. They should not ever place
loyalty above your other principles, or use it as an excuse for unethical behaviour. Demonstrate
your loyalty but always make an independent judgement, and never use information that you
have gained in confidence for your own personal advancement. Steer clear of conflicts of
interest, and if you ever decide to leave your company do it on the best of terms. Give reasonable
notice, respect any information that was gained in your former employer, and never engage in
activities that take advantage of a previous position that was held.
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TASK 2
2.1 Organisations ethical behaviour using Sethi’s typology and Mintzberg’s Conceptual
Horseshoe
Ethical people are those who recognize the difference between right and wrong and
consistently strive to set an example of good conduct. In a business setting, being ethical means
applying principles of honesty and fairness to relationships with co-workers and customers.
Ethical individuals make an effort to treat everyone with whom they come in contact as they
would want to be treated themselves (Michaelson and et. al., 2014).
Consumers may let a company take advantage of them once, but if they believe they have
been treated unfairly, such as by being overcharged, they will not be repeat customers. Having a
loyal customer base is one of the keys to long-range business success because serving an existing
customer doesn’t involve marketing cost, as does acquiring a new one. A company’s reputation
for ethical behavior can help it create a more positive image in the marketplace, which can bring
in new customers through word-of-mouth referrals. Conversely, a reputation for unethical
dealings hurts the company’s chances to obtain new customers, particularly in this age of social
networking when dissatisfied customers can quickly disseminate information about the negative
experience they had.
Sethi’s Typology Socially Irresponsible Social Responsiveness
 Social Responsibility
 Elliott’s amendment
 Social Obligation
Every organization, irrespective of the industry, has certain guidelines which its
employees must adhere to. Some common workplace ethics include:
 Being Punctual: Arriving to work on time, adhering to lunch and breaks on time, and
attending scheduled meetings on time.
 Being Responsible: Putting up honest efforts at the workplace and utilizing time to
complete designated tasks and deadlines instead of personal work.
 Dressing Professionally: Being well-dressed and adhering to the company’s dress code
and wearing ID cards.
 Working as One Team: Working well with others, respecting others, and being a good
team player.
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 Working with a Positive Attitude: Being pleasant and polite, and take on difficult tasks
with a cheerful attitude.
Henry Mintzberg, understood this and organized the roles of management systematically.
Mintzberg divides managerial work into three categories: interpersonal roles, informational roles
and decisional roles. These roles require developing peer relationships, carrying out negotiations,
motivating subordinates, resolving conflicts, establishing information networks, making
decisions with little or ambiguous information and allocating resources (Fassin and Buelens,
2011).
Managerial roles
Though every manager is different, Mintzberg noted that everyone should practice and
master each of these interpersonal, informational and decision-making roles.
Interpersonal roles :
 Figurehead. A figurehead is responsible for social, ceremonial and legal matters. They
represent their company in a professional manner.
 Leader - All managers must be leaders, communicating with, inspiring and coaching their
team. Workers should be able to look to their manager for support and guidance. Liaison - Liaisons are responsible for networking outside of their company and relaying
necessary information.
Informational roles :
 Monitor - A monitor seeks information within and outside of their company to assess
their company's operations and identify issues that need to be approached or changes that
need to be made (Audi, 2012).
 Disseminator - Disseminators should then relay valuable information internally to
employees and delegate assignments accordingly. Spokesperson - Managers should also relay information externally, acting as a
spokesperson for their brand.
Decision-making roles :
 Entrepreneur - Acting as an entrepreneur, managers should inspire change and
innovation. They should also create and implement new ideas.
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 Disturbance-handler - Any external or internal issues or roadblocks should be handled by
managers (Bageac, Furrer and Reynaud, 2011).
 Resource-allocator - Managers must allocate and oversee various resources, from funding
to equipment.
 Negotiator - The negotiator is responsible for participating and directing negotiations
within their organization.
2.2 Analyse and evaluate the ethical decision making process within a business setting.
Making good ethical decisions requires a trained sensitivity to ethical issues and a
practised method for exploring the ethical aspects of a decision and weighing the considerations
that should impact our choice of a course of action. Having a method for ethical decision making
is absolutely essential. When practised regularly, the method becomes so familiar that we work
through it automatically without consulting the specific steps.
Following are the features of ethical decisions: LEADERSHIP - The culture of an ethical business starts from the top of the
organizational chart. For a business to be ethical, its leaders at the top level must
demonstrate ethical practices. The true test of this leadership is in the decision-
making process when there is a choice between what is ethically responsible and what
will result in profit or gain (Rutherford and et. al., 2012). When the culture is solid at the
top of the organization, it trickles down to all lower areas in organization. VALUES - An ethical business has a core value statement that describes its mission. Any
business can create a value statement, but an ethical business lives by it.
It communicates this mission to every employee within the structure and ensures that it is
followed. The ethical business will institute a code of conduct that supports its mission
and is followed by every employee. INTEGRITY - Integrity is an important characteristic of an ethical business. The ethical
business adheres to laws and regulations at the local, state and federal levels. It treats its
employees fairly, communicating with them honestly and openly. It demonstrates fair
dealings with stakeholders and other related concerns.
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 LOYALTY - Solid relationships are a cornerstone of an ethical business. Employees who
work for a loyal employer want to maintain the relationship and will work harder toward
that end. Vendors and customers will remain loyal to a business that is reliable and
dependable in all situations (Dierksmeier, 2011). An ethical business stays loyal to its
partnerships even in challenging times. The result is a stronger relationship when
emerging from the challenge. CONCERN - An ethical business has concern for anyone and anything impacted by the
business. This includes customers, employees, vendors and the public. Every decision
made by the business is based on the effect it may have on any one of these groups of
people, or the environment surrounding it.
Following are the steps that can help in reaching ethical decisions:
RECOGNIZE AN ETHICAL ISSUE - Recognizing an ethical issue requires you to ask
some questions to yourself that is how it will affect the others. We may ask the question like
could this decision or situation be damaging to someone or to some group or does this decision
involve a choice between a good and bad alternative, or perhaps between two “goods” or
between two “bads”.
GET THE FACT- This step involves taking different facts into consideration that might
affect the decision or trying to gather unknown facts. e-g what are the relevant facts of the case
or what facts are not known? What are the options for acting? Have all the relevant persons and
groups been consulted? Have I identified creative options.
EVALUATE ALTERNATIVE ACTIONS - This step involves evaluating the different
possible decisions that one might wants to take and then deciding at the best possible action. It
would involve:
 Which option will produce the most good and do the least harm?
 Which option best respects the rights of all who have a stake? (The Rights Approach)
 Which option treats people equally or proportionately? (The Justice Approach) Which option leads me to act as the sort of person I want to be? (The Virtue Approach)
MAKE A DECISION AND TEST IT - It involves after evaluating different approaches
which decision would suit best to the given situation (De Cremer and et. al., 2011). It would
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involve asking questions to yourself like to consider all these approaches, which option best
addresses the situation?
ACT AND REFLECT ON THE OUTCOME - This is the step that should be taken after
making the decision that is How can my decision be implemented with the greatest care and
attention to the concerns of all stakeholders or How did my decision turn out and what have I
learned from this specific situation.
CONCLUSION
Form the above mentioned report, it get concluded that business ethics are related to the
clients and potential clients. It is about how companies do business and the culture they have
within. It is also how they portray themselves to the outside customer in their actions. When a
company practices good business ethics, it raises the standards of the industry. All companies
around including competitors will want to emulate their mode of operations so as to be
successful. The organization thus gains a good reputation. Reputation takes a while to build but
only a moment to destroy.
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REFERENCES
Books and Journal
Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press.
De George, R. T., 2011. Business ethics. Pearson Education India.
Fassin, Y. and et. al., 2011. Small-business owner-managers’ perceptions of business ethics and
CSR-related concepts. Journal of Business ethics. 98(3). pp.425-453.
Michaelson, C. and et. al., 2014. Meaningful work: Connecting business ethics and organization
studies. Journal of Business Ethics. 121(1). pp.77-90.
Fassin, Y. and Buelens, M., 2011. The hypocrisy-sincerity continuum in corporate
communication and decision making: A model of corporate social responsibility and
business ethics practices. Management Decision. 49(4). pp.586-600.
Audi, R., 2012. Virtue ethics as a resource in business. Business Ethics Quarterly. 22(2). pp.273-
291.
Bageac, D., Furrer, O. and Reynaud, E., 2011. Management students’ attitudes toward business
ethics: A comparison between France and Romania. Journal of Business Ethics. 98(3).
pp.391-406.
Rutherford, M. A. and et. al., 2012. Business ethics as a required course: Investigating the factors
impacting the decision to require ethics in the undergraduate business core
curriculum. Academy of Management Learning & Education. 11(2). pp.174-186.
Dierksmeier, C., 2011. The freedom–responsibility nexus in management philosophy and
business ethics. Journal of Business Ethics. 101(2). pp.263-283.
De Cremer, D. and et. al., 2011. Understanding ethical behavior and decision making in
management: A behavioural business ethics approach. British Journal of Management.
22(s1).
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