Business Ethics

Can profitability and morality coexist? Explain the statement In detail The largest companies in the nation have evolved over the years to find more ways to streamline operations, reduce waste, Increase the productivity of their employees, preached corporate ethics to their employees, try to be involved with local communities by giving to the local youth clubs or donations to a regional cancer research center. But Is this to be a good citizen of the community, or Is It a show? There’s a view that soaring profits and ethics are mutually exclusive concepts, forever, the two can co-exalts.

The world of business Is generally perceived as Jungle where the bottom line takes precedence over all other matters. While it is certainly true that profits are the true measure of success, commercial ruthlessness doesn’t necessarily lead to unethical practices, There sometimes arises an Inevitable conflict in the company between their moral obligations and improving the bottom lines. But ultimately companies following the path of ethical value system succeed in long run as sooner or later consumers learn to separate fact from fiction.

Hence In situations such as these referring to morality to help decide what needs to be done should take precedence. Nowadays Money and Ethics are seen to be diametrically opposed to each other but it turns out money and ethics do have much in common. Any corporation large or small ultimately lives by Its reputation. Ethics must sit at the top of the mountain for any successful company that wants the trust of the consumers and investors. There are very few second acts once the public perceives the organization flawed by soonest or Inferior quality.

As Is very rightly said by Henry Ford – A business that makes nothing but money is a poor kind of business. Ethical decision-making gets especially interesting when organizations must reconcile their core values and show a healthy bottom line which end up in conflict with one another. The company and its management might get diversified to malpractices. Enron. World, Astray, Xerox and other scandals shook public confidence in ethical value system of organizations. But it must understood very Leary Relativity applies to physics, not ethics (Albert Einstein) Profits and ethics are in reality part of the same equation.

A corporation that wishes to grow and Increase its financial return to its owners must balance ethics and operations. This Is a complex journey especially during tremendous economic pressures. The drive for success in the marketplace and to maximize return of capital can lead a company astray with disastrous results. Successful businesses fail, profitably running businesses suffer from a downfall and some seemingly effective report receive a great fall in their profits and popularity all due to the lack of business ethics.

There are companies that have crossed ethical lines in the pursuit of toy 2 pronto, Ana momentarily gal. EAI Tame Ana Torture out want was teen Ana result” Many companies strive for and achieve ethical behavior. Looking at names like Data group, Ford India, Rockwell Automation, Informs Technologies, Hindustan Milliner, TIC, ONCE it is inferred that Ethics remain being important in business and strong ethical values takes the business a long way. Ethics are important not only in business but in all aspects of life because it is an essential part of the foundation on which civilized society is build.

A business that lacks ethical principles is bound to fail sooner or later. Informs Technologies is among seven international companies chosen to be in the first annual list of “top brands with a conscience” Informs is the only Indian company to be part of this select group. Brought out by the Mending Group, an international collective of brand experts who meet annually, the sit is based on principles of humanity and ethics rather than financial worth.

Companies are evaluated on various parameters ranging from the evidence of ethical programmer and human implications of the brand to the ability of the brand to take risks in line with its beliefs. Informs Technologies recently won two other awards recognizing its financial performance as well as overall management. The Far Eastern Economic Review rated Informs the best company in India for the sixth consecutive year and Asia Money selected Informs as the best managed company in India.

Managing Employee Misbehaviour for Promoting Business Ethics Workplace misbehaviour: Any intentional action by members of organizations that defies and violates Shared organizational norms and expectations, and/or Core societal values, mores and standards of proper conduct (Vardi and Wiener, 1996, p. 153). Misbehaviour in this sense is also said to be about breaching broader, yet far from clearly defined or fully shared societal norms or moral order.

In industrial sociology key writers on misbehaviour – Ackroyd and Thompson (1999, p. 2) – borrow Sprouse’s (1992, p. 3) definition of sabotage – “anything you do at work you are not supposed to do” – to define misbehaviour, although questions remain about how useful this definition is. Perspectives on misbehaviour Misbehaviour is also a phenomena discussed in several other academic disciplines.

For instance, in gender studies, we see quite a distinct dimension of misbehaviour emerging. Misbehaviour in gender studies tends to concern males defending masculine identities in an organizational context and how masculinity is in reality a crucial, yet often hidden dimension of a broader organizational identity (Collinson and Collinson, 1989; DiTomaso, 1989; Levin, 2001).

An account of men trying to preserve the dominance of a masculine identity, sponsored implicitly by senior management, is outlined in the following passage taken from ethnography of a trading floor of a large, American commodities exchange: When the working environment becomes less active, the more overtly sexualized repertoire of joking and getting along emerges. Men and women use jokes to pass time, fit in and relieve tension, but a direct result of men’s sexual banter is to facilitate group solidarity among men to the exclusion of women.

Strong heterosexual joking is predicated on men being the sexual agents of jokes and women being the objects (Levin, 2001, p. 126). Further dimensions of gender-related misbehaviour include women subverting dominant masculine identities (Cockburn, 1991; Game and Pringle, 1983; Gutek, 1989; Pollert, 1981), women taking advantage of their sex appeal to get around male supervisors (Pollert, 1981) and female flight attendants feigning responses to lurid comments from male passengers (Hochschild, 2003).

Further details of Gutek’s (1989) research highlights the many ways in which sexuality can be the spur for a range of misbehaviour: More common than sexual coercion from either sex are sexual jokes, use of explicit terms to describe work situations, sexual comments to co-workers, and display of sexual posters and pictures engaged in by men at work (Sex and sports, some observers claim, are the two metaphors of business. ) The use of sex can be more subtle than either hostile sexual remarks or sexual jokes.

Although this tactic is often assumed to be used exclusively by women, some men, too, may feign sexual interest to gain some work-related advantage (1989, p. 63-64). Commentary on what could be interpreted to be misbehaviour is also a feature of industrial relations research. In industrial relations theorists seem to view misbehaviour as a lesser version of strike action, or action short of strike action (Bean, 1975; Blyton and Turnbull, 2004; Hyman, 1981; Nichols and Armstrong, 1976). From this perspective, misbehaviour is taken to represent the actions of unorganized employees.

In effect, misbehaviour is synonymous with a widespread and increasing inability of employees to offer a coherent and organized response to management strategies (Beynon, 1984). As such, industrial relations theorists link misbehaviour to record low levels of strike activity (Hale, 2007). Moreover, some theorists believe acts such as sabotage – in the form of grievance bargaining or deliberate poor workmanship – are intimately bound up in the labour process (Zabala, 1989). Research work in Ethics: 2008 NATIONAL GOVERNMENT ETHICS SURVEY in US: National Government Ethics Survey Shows Employee Misconduct is High Key Findings

On all levels of government, there is a lack of programs and incentives to encourage ethical behavior, the report says •Six in 10 government employees saw at least one form of misconduct in the last 12 months. •One in 4 employees work in an environment conducive to misconduct. According to ERC, this includes strong pressure to compromise standards, a presence of situations which invite wrongdoing, and a culture where employees’ personal values conflict with their values at work. •Overall strength of ethical cultures is declining. •Almost one-third of employees do not report misconduct. More than one-third of government employees believe government does not demonstrate its values through socially responsible decision-making. Levels of Government Federal Level – The number of incidences of misconduct observed is slightly lower, but reporting is still comparatively low. Only 30 percent of federal government organizations have ethics and compliance programs, and only 10 percent have strong ethical cultures. State Level – Workers are most vulnerable to ethical risks as there are more reports of employees who have observed misconduct multiple times.

Still 30 percent do not report misconduct to management. Local Level – Employees are the least likely to know the ethical risks since fewer resources are put in place to encourage ethical behavior. Local government organizations have the lowest levels of reporting misconduct, only 67% are reporting. “In order to encourage high ethical standards within our organizations, we first have to provide an environment that is conducive to ethical behavior,” says Sharon Allen, chairman of the board at Deloitte & Touche. However, management and leadership have a huge responsibility in setting examples for their organizations and living the values they preach if they want to sustain a culture of ethics. ” The report, “2007 Deloitte & Touche USA LLP Ethics & Workplace,” is based on responses from 1,041 U. S. adult workers. Harris Interactive conducted the research in February on behalf of Deloitte & Touche. The top two factors contributing to the promotion of an ethical workplace are the behavior of management and direct supervisors, as chosen by 42% and 36% of respondents, respectively.

More surprisingly, emphasis of criminal penalties doesn’t seem to do much to deter unethical behavior, nor does ethics training. There is, however, a strong relationship between ethical actions at work and a healthy level of work-life balance. In fact, 91% of those employees surveyed agreed that workers are more likely to behave ethically at the office when they have a good work-life balance. Allen explains why this may be so. “If someone invests in all of their time and energy into their jobs, it may have the unintended consequence of making them depend on their jobs for everything – including their sense of personal worth.

This makes it even harder to make a good choice when faced with an ethical dilemma if they believe it will impact professional success. ” Categories of Employee Misbehaviour: a. Production deviance – includes behaviors that waste time and resources. b. Property deviance – involves either theft or destruction of facility or residents’ property. c. Normative deviance – generally involves talk that hurts or belittles others. d. Personal aggression – mostly involves hitting, fighting, or sexual harassment. Common Employee Misbehaviour: Fighting Theft from the employer or colleagues Fraud or falsifying work documents

Accessing and/or distributing pornographic emails or websites Deliberately damaging company property Serious bullying or harassment Bringing the employer into serious disrepute Serious infringement of health and safety rules Serious failure to follow reasonable instructions. Causes of Employee Misbehaviour: Poor Employee selection and orientation procedures Poorly defined employee expectations Poorly understood employee expectations Improperly selected and trained supervisors Incorrect philosophy of discipline Effects of Employee Misbehaviour: oInefficiency oIncreased costs oUnhealthy and unsafe work environment

Employee Misbehaviour – To be Punished or leaving it ignored: Handling employee misconduct is a very critical task to be performed by the senior managers. Misconduct and other offensive behaviors often lead to decreased levels of productivity as they affect the individual performance of the employees. To manage discipline among employees, every company opts for a discipline policy which describes the approach it will follow to handle misconduct. When dealing with employee misconduct, companies must keep careful mind of the legislative and common law legal framework that governs the employment relationship.

Regard must be made to relevant legislation such as the Employment Standards Act 2000, Ontario Human Rights Code, Workplace Safety and Insurance Act, Occupational Health and Safety Act (reprisal provisions) and to principles such as constructive and wrongful dismissal. To effectively manage the employment relationship and deal with potential misconduct, employers are well advised to develop and maintain reasonable rules of conduct and performance expectations. Communicate these to employees and ensure consistent application and enforcement. Provide appropriate counseling and training to your workforce.

Carefully consider each incident of misconduct and the appropriate reaction. Avoid knee jerk instantaneous reactions. These only serve to increase potential employer liability. Management needs to conduct a preliminary investigation. Once the company has completed the investigation, the manager should make the employee aware of the findings. Once again, the manager can ask for the employee’s side of the story. Using this evidence, management, with the help of a Human Resources representative, must decide what to do. They must decide how they should discipline the employee or whether they should fire the worker.

To conclude, Very surely an action is required quickly if left unattended; misconduct will quickly demoralize the other employees too. While everyone reacts differently, even the top performers are usually going to be the first casualties of demoralization. Dealing with Employee Misbehaviour: The employer must investigate the matter fully (speak to witnesses, collect documentary evidence etc). The employer must also give the employee an opportunity to explain himself. The employee should sufficiently know what the case and evidence is against him before any hearing.

Prior warning of the hearing date and that the disciplinary action is under consideration. Give the employee the opportunity to call witnesses. Inform the individual he has the right to be accompanied by a colleague (or a trade union official). Inform the employee he has the right of an appeal. Employee’s rights If an employee has been with the employer for over a year they have unfair dismissal protection. Although employees have the right not to be dismissed for an unfair reason, the conduct of an employee is expressly stated to be a potentially fair reason to dismiss.

Employees also have the right not to be discriminated against on the grounds of their sex, race or disability. This would include being singled out for a warning about their conduct or receiving harsher penalties than other employees would receive. Employees have the right not to be dismissed in breach of their contractual terms. For example, failure to follow a contractual procedure may result in a claim of breach of contract. Employees are entitled to be dismissed on notice (unless for gross misconduct). Failure to do so entitles the employee to claim damages for breach of contract. This type of claim is also called ‘wrongful dismissal’.

Employees should be made aware, either in their contract of employment or in disciplinary procedures what are the likely consequences if they break the guidelines the company has laid down in relation to their conduct. Employers must be consistent. If other employees have previously committed the same offence but have not been dismissed it may be difficult to justify dismissal on a subsequent occasion. Certain offences are contrary to acceptable conduct that discipline is readily accepted or justified upon review regardless of whether there was any prior communication or warning to the employee.

Theft Intentional destruction of company property Total refusal to perform safe work Gross or intentional endangerment of the safety of coworkers. Excessive absenteeism is another factor that can lead to termination only after a series of lesser penalties. Dismissal for misconduct to be reasonable: Even though an employer may have strong suspicions that an individual is guilty of misconduct, this may not be enough. Although an employer does not have to show an employee committed the offence “beyond all reasonable doubt”, there is a threshold that must be reached.

In particular: •The employer must believe that the employee is responsible for the conduct in question. •The employer must have reasonable grounds for this belief. •The employer must carry out as much of an investigation into the matter as is reasonable. Charging an Employee with a criminal offence: •The employer does not have to wait for the outcome of police investigations or criminal trial. •The employer should hold its own investigation into the matter. •The employee’s rights to have this matter investigated by his employer and to present his side of the story remain regardless of the fact that he is charged by the police.

Out of office misconduct: •Generally, employees will only be subject to the company’s disciplinary rules and procedures during their office hours or when they represent the company. •In certain circumstances an employee’s behaviour may be subject to the employer’s scrutiny if it is deemed to be likely to impact on the performance of his contract or the reputation of the employer. Out of office misconduct must be particularly serious to warrant disciplinary action and the behaviour should also relate to the employee’s ability (or perceived ability) to do his job. Disciplinary action

The type of disciplinary action that is taken will depend on the employer’s disciplinary procedures and the circumstances surrounding the misconduct. The employer will have to follow its written guidelines regarding certain types of misconduct. If historically an employer has always been lenient on a particular matter an Employment Tribunal is likely to find the employer has acted unreasonably and unfairly dismissed an individual if it suddenly decides to invoke its disciplinary procedures in disciplining individuals without warning. Warning tiers in a disciplinary procedure •Usually employers will decide to issue a first warning orally.

This is appropriate if it is a minor infringement that cannot be dealt with on an informal basis. The employee should be told that this is the first step in the disciplinary procedure and why he is receiving the warning. At this point he should also be informed of his right of appeal against the decision. Although oral warnings will be kept on an employee’s personnel file, they should be disregarded for further disciplinary purposes after a specific period of time. •If an employer regards an infringement as being more serious then the employee should be given a formal written warning.

Again an employee should be given details of the reason for the warning as well as what is required from the individual in the future and the allotted time scale for improvement. Employees should have a right of appeal. Employees also must be warned what penalty there will be if after the allotted time the employer does think there has been a satisfactory improvement. The written warning should also be kept on the employee’s personnel file but cannot be considered for disciplinary procedures after a specific period of time. A final written warning is appropriate if there has been a failure to either improve or change conduct while the earlier warning is still ‘live’. This type of warning can also be used if there is a one-off occurrence of misconduct that is deemed by the employer to be sufficiently serious. As always the final written warning should provide details of the misconduct, warn that failure to rectify the situation may lead to dismissal or some other disciplinary action which is short of dismissal (which is explained below). Again employees must be told of their right to appeal.

The written warning can only remain live for a specified period of time after which point it must be disregarded, no matter how serious the misconduct. •Disciplinary action short of dismissal may include a transfer, demotion, loss of seniority, suspension without pay or loss of increment. An employer cannot take these sanctions unless there is a specific provision in the employee’s contract. •If an employer decides to dismiss (either because of gross misconduct or failure to rectify behaviour following a final written warning) the employee should be informed as soon as possible of the decision, as well as the reasons for the dismissal.

He should also know the date their employment will terminate and the period of notice. An employee should also be told of the fact that he has the right to appeal as well as how he can make that appeal and to whom. Employers should also confirm the decision to dismiss in writing. If an employee has at least one year’s continuous service they can request a written statement of particulars of reasons for their dismissal. •General considerations for employers when disciplining •A good disciplinary procedure will enable an employer to take appropriate steps in the event of misconduct of an employee. The disciplinary procedure should be in writing Consequences of Disciplinary actions: Union Grievance Equal Employment Opportunity Commission Complaint (EEOC) Law Suits Employee Buyouts Having to Reinstate Employee Embarrassment to Leadership Leadership Looses Credibility Employees Don’t Respect the process Creating an Ethical climate in the Organization to avoid Misconduct: The ethical climate of an organization is the shared set of understandings about what is correct behavior and how ethical issues will be handled. This climate sets the tone for decision making at all levels and in all circumstances.

Some of the factors that may be emphasized in different ethical climates of organizations are (Hunt, 1991; Schneider and Rentsch, 1991): * Personal self-interest * Company profit * Operating efficiency * Individual friendships * Team interests * Social responsibility * Personal morality * Rules and standard procedures * Laws and professional codes As suggested by the prior list, the ethical climate of different organizations can emphasize different things. In the Johnson & Johnson example just cited, the ethical climate supported doing the right thing due to social responsibility–regardless of the cost.

In other organizations–perhaps too many–concerns for operating efficiency may outweigh social considerations when similarly difficult decisions are faced. When the ethical climate is not clear and positive, ethical dilemmas will often result in unethical behavior. In such instances, an organization’s culture also can predispose its members to behave unethically. For example, recent research has found a relationship between organizations with a history of violating the law and continued illegal behavior (Baucus and Near, 1991). Thus, some organizations have a culture that reinforces illegal activity.

In addition, some firms are known to selectively recruit and promote employees who have personal values consistent with illegal behavior; firms also may socialize employees to engage in illegal acts as a part of their normal job duties (Conklin, 1977; Geis, 1977). For instance, in his account of cases concerning price fixing for heavy electrical equipment, Geis noted that General Electric removed a manager who refused to discuss prices with a competitor from his job and offered his successor the position with the understanding that management believed he would behave as expected and engage in price-fixing activities (Geis, 1977, p. 24; Baucus and Near, 1991). Pressure, opportunity, and predisposition can all lead to unethical activities; however, organizations must still take a proactive stance to promote an ethical climate. The final section provides some useful suggestions available to organizations for creating a more ethical climate. PROMOTING AN ETHICAL CLIMATE: Ethical Philosophies and Employee Behavior: Recent literature has suggested several strategies for promoting ethical behavior in organizations (Adler and Bird, 1988; Burns, 1987; Harrington, 1991; Raelin, 1987; Stead etal. , 1990).

First, chief executives should encourage ethical consciousness in their organizations from the top down showing the support and care about ethical practices. Second, formal processes should be used to support and reinforce ethical behavior. For example, internal regulation may involve the use of codes of corporate ethics, and the availability of appeals processes. Finally, it is recommended that the philosophies of top managers as well as immediate supervisors focus on the institutionalization of ethical norms and practices that are incorporated into all organizational levels.

The philosophies of top managers as well as immediate supervisors represent a critical organizational factor influencing the ethical behavior of employees (Stead etal. , 1990). Research over a period of more than twenty-five years clearly support the conclusion that the ethical philosophies of management have a major impact on the ethical behavior of their followers employees (Arlow and Ulrich, 1980; Baumhart, 1961; Brenner and Molander, 1977; Carroll, 1978; Hegarty and Sims, 1978, 1979; Posner and Schmidt, 1984; Touche Ross, 1988; Vitell and Festervand, 1987; Worrell etal. 1985). Nielsen (1989) has stressed the importance of managerial behavior in contributing to ethical or unethical behavior. According to Nielsen, managers behaving unethically contrary to their ethical philosophies represent a serious limit to ethical reasoning in the firm. Much of the research cited in the above paragraph implicitly and explicitly states that ethical philosophies will have little impact on employees’ ethical behavior unless they are supported by managerial behaviors that are consistent with these philosophies.

Managers represent significant others in the organizational lives of employees and as such often have their behavior modeled by employees. One of the most basic of management principles states that if a certain behavior is desired, it should be reinforced. No doubt, how ethical behavior is perceived by individuals and reinforced by an organization determines the kind of ethical behavior exhibited by employees. As a result, if business leaders want to promote ethical behavior they must accept more responsibility for establishing their organization’s reinforcement system.

Research in ethical behavior strongly supports the conclusion that if ethical behavior is desired, the performance measurement, appraisal and reward systems must be modified to account for ethical behavior (Hegarty and Sims, 1978, 1979; Trevino, 1986; Worrell et al. , 1985). According to Nielsen (1988, p. 730): In many cases, mangers choose to do, go along with or ignore the unethical… because they want to avoid the possibility of punishments (or) to gain rewards. Ethical Culture:

Organizations and their managers must understand that the above recommendations are key components in the development and maintenance of an ethically-oriented organizational culture. Organizations can also enhance an ethically-oriented culture by paying particular attention to principled organizational dissent. Principled organizational dissent is an important concept linking organizational culture to ethical behavior. Principled organizational dissent is the effort by individuals in the organization to protest the status quo because of their objection on ethical grounds, to some practice or policy (Graham, 1986).

Organizations committed to promoting an ethical climate should encourage principled organizational dissent instead of punishing such behavior. Organizations should also provide more ethics training to strengthen their employees’ personal ethical framework. That is, organizations must devote more resources to ethics training programs to help its members clarify their ethical frameworks and practice self-discipline when making ethical decisions in difficult circumstances.

What follows is a useful seven-step checklist that organizations should use to help their employees in dealing with an ethical dilemma (Schermerhorn, 1989; Otten, 1986): Helping employees in dealing with Ethical Dilemma: (1) Recognize and clarify the dilemma. (2) Get all the possible facts. (3) List your options–all of them. (4) Test each option by asking: “Is it legal? Is it right? Is it beneficial? ” (5) Make your decision. (6) Double check your decision by asking: “How would I feel if my family found out about this? How would I feel if my decision was printed in the local newspaper? ” (7) Take action.

An effective organizational culture should encourage ethical behavior and discourage unethical behavior. Admittedly, ethical behavior may “cost” the organization. An example might be the loss of sales when a multinational firm refuses to pay a bribe to secure business in a particular country. Certainly, individuals might be reinforced for behaving unethically (particularly if they do not get caught). In a similar fashion, an organization might seem to gain from unethical actions. For example, a purchasing agent for a large corporation might be bribed to purchase all needed office supplies from a particular supplier.

However, such gains are often short-term rather than long-term in nature. In the long run, an organization cannot operate if its prevailing culture and values are not congruent with those of society. This is just as true as the observation that, in the long run, an organization cannot survive unless it produces goods and services that society wants and needs. Thus an organizational culture that promotes ethical behavior is not only more compatible with prevailing cultural values, but, in fact, makes good sense.

Although much remains to be learned about why ethical behavior occurs in organizations and creating and maintaining organizational cultures that encourage ethical behavior, organizations can benefit from the following suggestions: Maintaining organizational cultures that encourage ethical behavior: ** Be realistic in setting values and goals regarding employment relationships. Do not promise what the organization cannot deliver. ** Encourage input throughout the organization regarding appropriate values and practices for implementing the cultures. Choose values that represent the views of employees at all levels of the organization. * Do not automatically opt for a “strong” culture. Explore methods to provide for diversity and dissent, such as grievance or complaint mechanisms or other internal review procedures. ** Insure that a whistle-blowing and/or ethical concerns procedure is established for internal problem-solving (Harrington, 1991). ** Provide ethics training programs for all employees. These programs should explain the underlying ethical and legal (Drake and Drake, 1988) principles and present practical aspects of carrying our procedural guidelines. Understand that not all ethical situations are clear-cut.

Like many basic business situations, the organization should recognize that there are ambiguous, grey areas where ethical tradeoffs may be necessary. More importantly, some situations have no simple solution (Cooke, 1991). ** Integrate ethical decision-making into the performance appraisal process. Responsibilities of Employers in accordance with managing the behaviour of Employees: •treat all employees equally; •give consideration to the employee’s general work record including their length of service, position and whether there are any special circumstances; •ensure incidents are dealt with without undue delay; ensure the proceedings (including any statements from witnesses and records) be kept confidential; •specify what disciplinary sanctions the company may take; •state who has authority within the company to take each level of disciplinary action; •ensure employees are informed of the allegations against them as well as any relevant documentation before the date of any hearing; •ensure that employees have the right to state their case before any decision is reached; •allow employees to be accompanied either by a colleague or if appropriate, a trade union official; •ensure that the sanctions are proportionate to the misconduct; •ensure that allegations will be carefully investigated; •ensure employees are given an explanation of any sanction; and •Specify that there is a right to appeal as well as how and when this must be taken. Finally…To conclude… Ethical behavior among the employees can be inculcated by adopting the following principles of ethical climate. oMake the expectations clear oTreat the people employed as if they are adults, which they are. oSpend time meeting with staff members regularly oSevere discipline procedures may back fire. oMake all policies and procedures available to all employees. oEncourage open communication between you and the people who report to you. Human beings prefer to follow their own doctrines- therefore management should be aware that difficulties may crop up and should formulate friendly implementation of policies. “ No man is fit to command another that cannot command himself” – William Penn References: 1. http://www. ethicsworld. org/ethicsandemployees/nbes. php 2. http://www. michaelpage. co. uk/content. html? pageId=15676 3. Managing misconduct By Rob Eldridge of Berwin Leighton Paisner 4. http://www. employeeterminationguidebook. com/ 5. http://www. lbwlawyers. com/publications/employeemisconduct. php 6. http://www. slideshare. net/meetsantanudas/managing-employee-discipline 7. http://www. fsa. usda. gov/FSA/hrdapp? area=home=mgrs=dem 8. http://www. employeemisconduct. com/ 9. Edward J.

Tully December 1997 Misconduct, Corruption, Abuse of Power– What Can the Chief Do? 10. http://www. streetdirectory. com/travel_guide/20341/corporate_matters/how_employee_misconduct_affects_all_worker_productivity. html 11. Belt Tightening Tactics Linked to Increases in Employee Misconduct April 27, 2010 by Amy Coates Madsen 12. http://standardsforexcellenceinstitute. wordpress. com/page/2/ 13. W. Edward Stead, Dan L. Worrell and Jean Garner Stead An integrative model for understanding and managing ethical behavior in business organizations Journal of Business Ethics Volume 9, Number 3, 233-242 14. Ethical behavior starts at the top By Amy Schurr, Network World April 24, 2007 12:05 AM ET

The advantage to this decision is she did what he felt was morally acceptable, the disadvantage is she does not have their business and she has no reason to believe they would not pay the loan back and she would have made money for the bank if she accepted and approved the loan application. Although she was applauded for her moral stance from some there were some that were not very happy about the decision. A Canadian company that was importing cigars from Cuba.

Elaine based this decision on what Is known as “Rule Deontological” this is determined by the relationship between the basic rights of the individual and a set of rules governing conduct. Elaine based her decision of the Helms-Burton Act of 1996. Helms-Burton Act signed by United States President Bill Clinton on March 1996, while highlighting the US relationship with Cuba. Alien’s advantage of this decision was she had clear guidance cited In the U. S. Policy against Cuba by the Helms-Burton Act and dealings with Cuba.

Disadvantage

Is she was dealing with a Canadian based company she could have done business with. . Electrode International which wanted a loan for $50 million. Elaine had issues with profits being unusually high for such marginal numbers. Electrode and others had allegedly fixed the prices on their products and were successful at this since their product was only being manufactured by a handful of companies. Alien’s decision was based on what Is known as “Act Deontological” where actions are the proper basis on which to Judge morality or ethicalness.

The Advantage

Is she stayed away from an ethically questionable company since they were basically price gouging and he disadvantage, if you can get past the ethical decisions the company made, is they are a very successful company. This one she was overruled and forced to sign the loan. The last company was from Brazil requesting an agricultural loan to harvest parts of the rain forest and was willing to pay almost 2 points over the going rate on a $40 million loan. To Elaine this had environmental Implications and was going against her stand on the environment.

Alien’s philosophy on this decision what is known as “Virtue Ethics” behavior adhering to moral behavior and what a mature errors with “good” moral character would deem appropriate in a given situation. Advantages in this decision is on her end only, she felt as if she was going to save part of the rain forest but unfortunately the Brazilian company decided to Just get the loan somewhere else, one of her competitors which Is the disadvantage. Elaine could be forced to start making decisions to save the bottom line for the bank (BBC).

She has already lost employees over the past year due to her regulations being too provincial for the emerging global marketplace. Elaine may have to think bout re-writing her standards for the bank decisions for approving loans. She already lost one major account to another competitor can she really afford to lose another one? B. Dennis who is in the import/export business had made a decision to stay away from a major opportunity to export nicotine and caffeine patches in Southeast Asia.

The thought process was to get a potential 2 billion customers addicted to the product at a low price then when the time came to raise the price Just a penny which could actually make millions of dollars. Dennis rejected the deal and he firm went with another company, losing money for the company and potentially allowed Dennis to work this account for years and possibly save enough for retirement. JIBE is losing a lot of business due to the standards that Elaine had written for the company and maybe some of the decisions she has made.

Discuss the Moral Philosophies that may be relevant to this situation. Teleology stipulates that acts are morally right or acceptable if they produce some desired result. Elaine could have made decisions on some of the loans discussed Just to ensure the “end result” was a bottom line profit. That is what would make the different companies that were requesting money acceptable and in some situations morally right. Egoism defines right or acceptable actions as those that maximize a particular persons self-Interest as defined by the individual.

Elaine could have approved the loans that met the credit portion of the application, this would have probably been a good decision for her career since the bank would stand to gain a lot of money, especially the loans that were willing to pay above market value.Utilitarian believes right or acceptable actions are those that maximize total utility or the greatest good for the greatest amount of people. In Alien’s case the company feels they will gain a lot if she decides to go will a billion dollar investment, because it can benefit a lot of people. Demonology focuses on the right thing to do focusing on the preservation of individual rights and on the intentions associates with a particular behavior rather than on its own intentions. Elaine doesn’t believe it is a good idea to give loans to certain companies because of the products they promote ND who they promote too. She believes the company can still be profitable I be profitable without going against what she thinks is right. Relativists evaluates ethicalness subjectively on the basis of individual and group experiences.

Elaine bases her decisions on her own experiences and believes her decision is Just as good as others.Virtue ethics assumes that what is moral in a given situation is not only what conventional morality requires but also what a mature person with a “good” moral character would deem appropriate. In Alien’s decisions she is basing some of hem on her morality as she probably a mature person with “good” moral character, but sometimes in business decisions you should look at the bottom line.

Careful being In high-risk areas (projectiles) Aggression of the drivers (violence) Damaging property of the bus Consumers of drug or drinking Other conflicts: Vehicle on the road Precision of bus driver (working conditions) People who park not correctly Manifestation For controller: users are not paid

1. Job content Lack of variety, monotonous or under-stimulating tasks Continuous exposure to people
2. Work load and work place High level of time pressure Machine pacing
3. Work schedule Night shifts Strict and Inflexible working schedules Long or unsociable hours
4. Participation and control
5. Lack of control over workload (over work method, work pace, working hours and the work environment)
6. Organizational culture and functions Low level of support for problem solving and personal development Lack of definition of, or agreement on, organization’s objectives.
7. Interpersonal relationship at work Social or physical isolation, solitary work Poor relationship with co-workers and Interpersonal conflicts Bullying, harassment and violence No agreed procedures for dealing with complaints and problems
8. Role in organization Responsibility for people
9. Career development, status and pay Job insecurity Poor pay
10. Career stagnation or uncertainty For a bus driver for example, main factors of psychological risk will be that it’s always the same, there are no variety in driving bus, there are a lot of pressure with the time, a bus driver needs always to be in time because if he’s late it damages each user of the bus, there are not a lot of evolution perspectives in the company when you’re a bus driver, you work alone.

For a controller it’s quite a disagreeable task, they social gratitude, people dislike bus controller, it’s not always easy to take care about complaints of people, sometimes there is a risk of exposure to verbal or physical lenience from people.

Dilemmas between ethical and legal behavior? Stress at work can come when there are differences between pressures from one person and pressures from an other one. For example, when your boss asks you something but you can’t apply it or you have a dilemma, should I apply it?

It can create some stress For a controller, some dilemmas can appears in some situations, they have to find the threshold between tolerance, ethics, respect of users, and respects of company rules it’s not always easy A bus driver can have some dilemmas, for example: the bus is late, but there are some young child in the bus, he can choose o conduce slowly and make an ecological drive even if it’s not a law and even if he wants to drive quickly to minimize the late.

Solutions to prevent or minimize problems and more ethical attitude? For bus driver and controller, they both need a lot of training to prevent any problem they can meet and help them to do the best choice; they have to be used to manage their stress efficiently. It’s possible to schedule the time at each stop, and crowded runs to skip certain stops for example. The problem is too if the bus are completed and the passengers are in a hurry. The bus driver can manage at best the situation.

Group based discrimination occurs when the rights of an individual are compromised as the individual fits into a group, whose performance and failure rate is high. Though the individual might have the mindset, intention and ability to perform to the expected standards, he or she is subjected to unfair and discriminatory treatment, due to their compatibility with the failing group.

Thus, higher life insurance premium for women, higher vehicle insurance premium for youth etc. are instances of such discriminations. Public pressure, political and legal activity in the US have regularly confronted such discrimination, based on groups. Perhaps a similar issue but with more implications and debate is the age-based discrimination associated with retirement.

Age has been for long, an important and perhaps the primary consideration factor, when it came to determining employment suitability. The logic behind fixing an age criteria was that after a particular age, one’s physical attributes would begin to decline. This would result in a decline of services and can even affect public safety. This also has a bearing on the interests of the employees too, as the employee is guaranteed employment up to this age. The debate on age and employment suitability came to the fore of public participation when in 1979, pilots and flight engineers of United Airlines initiated an age discrimination proceeding against the airlines and the Airline Pilots Association. They challenged the policy of United Airlines to retire all flight engineers at 60.

The case of the pilots was supported by the Equal Employment Opportunity Commission. The contention of the plaintiffs was that the airlines policy of forced retirement at 60 was against the Age Discrimination in Employment Act of 1967. (ADEA). They asserted that age cannot be shown here as a bona fide occupational qualification (BFOQ), necessary for adequate job performance. The stand of United Airlines was that the age of the flight engineer was indeed a crucial aspect in determining operational safety of the airline. It also asserted that it was not possible to screen out incapable officers between two consecutive medical examinations.

Hiring and retiring people based on age seriously affects an individual’s right. Age as a deciding factor for job suitability should be enforced only when the age of an individual negatively affects the job performance and results. The implications of age are, for example more relevant in jobs that are associated with public safety like pilots. However when age hinders the continuity of employment for non-critical jobs, particularly those which can be evaluated like a clerk, plumber etc., then such discriminations are not in public interest.

When the US agreed upon a retirement age of 65, through the Social Security Act of 1935, the move was more considered an arbitrary one, with less relevance to the job ability factor. The move was more intended to provide opportunities for the younger generation and to offer a financed retirement system. In safety related businesses, employers raise the BFOQ to defend their decision as being crucial for normal operations. Their stand is that employees below a certain age are more result oriented and effective, and they do agree that there could be capable people among the ones asked to retire, however they have to generalize them all, because it is not possible to identify them.

The safety related businesses has several legal implications associated with their age policies. Abandoning age criteria has important legal considerations, particularly when such actions result in increased risk to others. An employer who forces retirement on an employee on the grounds of FOA (factor of age), needs to justify this action, on any other factor other than age. The employers counter age discrimination charges citing economic and non-economic factors.

The non-economic factors might be poor performance of employee, lack of confidence on the employee, policy violations or employee being uncooperative. The economic factors can be cost cutting or reduction in workforce, like termination of all employees who are above a particular pay scale, which is allowed by ADEA. ADEA uses research evidence to resolve cases having a bearing on age and safety relationship. It relies on scientific grounds to examine age and its effect on organizational variables. These developments are very relevant in the case of United Airlines, where a desirable solution could be achieved by taking all the interests involved and balancing them.

An important point here is that the stand adopted need not be permanent or irreversible. With time, the older group perception has been being highly transformed to individual specific assessments. The nature of job and responsibilities have changed due to technology, the healthcare and treatments have changed and more dependable evaluation techniques for job proficiency have been developed, which favors age consideration at an individual level.

Issues of public safety are paramount when the ability of the people dealing with them are considered. Apart from airline pilots there are a host of other professions, mainly in the public domain, where the age, health and mental fitness of the employees are important. In the airline these include even the flight engineers, captains, copilots, flight instructors and flight management pilots of the aircraft. The other professions where age and fitness are important are defense, space and nuclear programs etc. Much is at stake for the public, on the performances and lapses of such employees.

Retirement of older employees may be justified when wages are an issue, where use of younger employees can affect savings without any adverse effects. Younger employees are in a more vulnerable position, as they would not be able to survive increased periods of unemployment. The recruitment of younger employees and replacement of the older ones are more welcome during turbulent times like severe competition in the market, business failure or pressure to cut costs etc.

Subsequent to the January 31, 1979 suit by three flight engineers (Monroe plaintiffs) claiming violation of ADEA by asking them to retire on 60, another case was filed by United’s pilots (Higman plaintiffs) against the airline’s refusal to transfer pilots to flight engineers, when they reached 60. Several flight engineers and pilots joined the case as it proceeded. The Equal Employment Opportunity Commission (EEOC) also joined the issue and sought an injunction to stop United from pursuing such age-based policies.

The EEOC contended that United had violated the ADEA by denying opportunities based solely on age. There was no Federal Aviation Administration (FAA) rule requiring pilots to be below 60. In 1978, the ADEA was amended by the Congress and stopped involuntary retirement based on age. United had to prove that its policy of barring everyone over the age of 60 was necessary from the point of safe transportation and in line with the requirements of BFOQ. On September 29, 1982, the jury in a district court provided a verdict for the plaintiffs.

The court ruled that United had intentionally violated the ADEA. In 1983, the district issued four subsequent decisions to ensure compliance by the defendants. United appealed to the seventh Circuit of the United States Court of Appeals, claiming that the district court had erred and had not provided its right to proper defense. The proceedings which went up to 1984 saw the Appeals Court reverse the lower court verdict.. The Appeals Court agreed that United was denied a lawful defense. The Supreme Court had on February 25, 1985 refused to hear a further appeal. Thus the age 60 rule remains, although vaguely.

Although the Appeals Court gave a verdict in favor of United, it was more relevant on the legal aspects like not being given a reasonable defense. The closest it came to the case was when, perhaps as United claims, the district court had denied it an opportunity to defend its BFOQ determination methods. The core question of loss of competencies at 60 remained unjudged.

When age criteria are important, people on safety related jobs can be encouraged to downgrade, when they reach retirement age. They can be absorbed at those positions where their skills and knowledge are compatible and useful, while at the same time there is lesser risk in terms of safety. As growing old would definitely impair an individual’s abilities, there should be an appropriate downgrading of responsibilities such that risks are eliminated or appropriately reduced. This way justice can be done for the employee and the society.

Abstract

Given the competitiveness in the world market, many are tempted to go outside of the rules and regulations of society in order to get ahead. Although many would like to think that qualities such as honesty and credibility are first and foremost in the minds of people, temptations have lured some to act irresponsibly to get more of the almighty dollar. Recent scandals have proven that good ethical and moral values are becoming more the exception rather than the rule.

This paper will address the following ethical and moral questions: What is ethics and morality in business. How far have we come as a country in relation to business ethics? Why society is becoming more aware of corporate behavior? What measures are taken by businesses to become a better corporate citizen? Business practices came under fire when America’s seventh largest firm, Enron, collapsed due to unethical accounting strategies. I feel this created a domino effect and was the beginning of our current crisis.

Now there are companies folding one after the other, large organizations in the US collapsed or filed for bankruptcy cover and one case even implicated the famous home economist, Martha Stewart for insider trading. The various deceitful activities of some larger companies resulted in widespread public mistrust of business practices and principles. This paper will concentrate on some of the ethical and moral issues that must be addressed when trying to understand the state business ethics. 1. What is ethics and morality and how do they relate? 2. What happened in business ethics before the 1960s to the present time? . What are factors that could change ones views of a business’ ethical behavior? 4. What are interactions between business and society that alter societal expectations? What is ethics and morality and how they relate? When considering the difference between ethics and morals, consider what a criminal defense lawyer does for a client. Though the lawyer’s personal moral code likely finds murder immoral and reprehensible, ethics demand the accused be defended to the best of his ability even when the lawyer knows the party is guilty and that a freed defendant would potentially lead to more crime.

Legal ethics must override personal morals for the greater good of upholding our justice system in which the accused are given a fair trial and the prosecution must prove the accused guilt. Ethics is the branch of philosophy that deals with morality. Ethics is concerned with distinguishing between the good and evil in the world, between right and wrong human actions, and between virtuous and nonvirtuous characteristics of people. Ethics means thinking critically about your actions and about their motives and their consequences (Dictionary. com, 2009).

Do I want to be an honest, honorable, spiritual, respectful, or loving person? You might hold an ethical position that it’s wrong to lie. A time may arise where it may be necessary to bend the truth or sometimes tell a “white lie”. For example, if you have plans to deploy to Iraq on a sensitive mission and you want to keep your trip a secret for obvious reasons. If someone asks you about those plans, you may need to lie to protect the integrity of the mission. When it comes to making ethical decisions, I take into account my very personal feeling that there is a principle greater than myself.

With that said, morality is the subset of ethics dealing in the philosophical study of interpersonal relations and their ethical implications. It has to do with the critical analysis of our roles in society, our “duties” and “rights”. Morals are not personal decisions, except in whether you agree with them or not. Morals are rules that a group has decided are best for that group. (Borade, G, 2009). Americans have several versions of what is moral and immoral, Catholics have lists of sins, Christians have the Ten Commandments, Buddhists has a set and so forth. You may strongly agree with them, or trongly oppose them, but they still exist, and people will judge your conduct against them whether you agreed with them or not. Building on these definitions, we can begin to develop a concept of business ethics. Business ethics can be defined as written and unwritten codes of principles and values that govern decisions and actions within a company (Simpson, C, 2004). Business ethics boils down to knowing the difference between right and wrong and choosing to do what is right. The phrase ‘business ethics’ can be used to describe the actions of individuals within an organization, as well as the organization as a whole (Lovetoknow. om, 2009). What happened in business ethics before the 1960s to the present time? Now that we have defined terms, we can now discuss the progression of business ethics in the United States over the years. The study of ethics in North America has evolved through five distinct stages: (1) Before 1960, (2) the 1960s, (3) the 1970s, (4) the 1980’s and 1990s to present (Ferrell, 2008). Business Ethics Prior to 1960 Prior to 1960, the United States questioned the concept of capitalism. The 1920s brought about the ‘living wage’ through the progressive movement.

In the 1930s came the New Deal, which blamed business for the country’s economic woes and businesses where asked to work more closely with government to raise family income. By the 1950s, the New Deal evolved into the Fair Deal by President Truman which addressed civil rights and environmental responsibility as ethical issues that businesses had to address. Until 1960, ethical related issues were addressed in religious institutions of all faiths. Religious leaders raised questions about fair wages, labor practices, and the morality of capitalism.

Religion applied its moral concepts to business as well as government, politics, the family, personal life, and all other aspects of life (Ferrell, 2008). Business Ethics in the 1960s During the 1960s, the antibusiness attitude emerged as critics attacked the vested interests that controlled the economic and political side of society, the so called military-industrial complex. The 1960 saw the crumbling of the inner cities and the growth of environmental problems such as toxic and nuclear pollution and waste disposal. A rise in consumerism by individuals, groups, and organizations began to protect their rights as consumers.

In 1962, President John F. Kennedy delivered a “Special Message on Protecting the Consumer Interest” where he outlined the four basic consumer rights: the right to safety, the right to be informed, the right to choose, and the right to be heard. These four rights later came to be known as the Consumers’ Bill of Rights. After Kennedy came Lyndon Johnson and the Great Society, which extended national capitalism and let the business community know that the government would be responsible for providing the citizens with a degree of economic stability, equality, and social justice.

Any business practice that could destabilize the economy or discriminate any class of citizen began to be viewed as unethical and unlawful (Ferrell, 2008). Business Ethics in the 1970s In the 1970, business ethics developed as a field of study. Business professors began to teach and write about corporate social responsibility. Companies became more concerned with their public images and realized that they had to address ethical issues more directly. The Nixon Administration’s Watergate scandal brought attention to the importance of an ethical government.

The Foreign Corrupt Act was passed during the Carter administration, making it illegal to for U. S. businesses to bribe government officials of other countries. Numerous ethical issues emerged during the late 1970s such as bribery, deceptive advertising, product safety, and the environment issues. Business ethics became a common expression and researchers sought to identify ethical issues and describe how businesspeople might act in a situation (Ferrell, 2008). Business Ethics in the 1980s In the 1980s, business ethics is acknowledged as a field of study.

Five hundred courses in business ethics were offered at colleges across the country. Leading companies such as General Electric, Chase Manhattan, General Motors, Atlantic Richfield, Caterpillar, and S. C. Johnson and Son, Inc viewed business ethics as a major concern. The Defense Industry Initiative on Business Ethics and Conduct (DII) was developed to guide corporate support for ethical conduct. The DII established a method for discussing best practices and tactics to link organizational practices and policy to successful ethical compliance.

In the 1980s, the Reagan-Bush eras brought about the policy of self-regulation rather than regulation by government. Tariffs and trade barriers were lifted and businesses merged. Corporations that were once nationally bases began operating internationally. The rules of business were changing at an alarming rate due to fewer government regulation imposed during the Reagan-Bush era (Ferrell, 2008). Business Ethics in the 1990s In the 1990s, President Clinton continued to support self-regulation and free trade.

However, it also took unprecedented government action to deal with health issues. These issues included restricting cigarette advertising, banning vending machine sales and banning the use cigarette logos during sporting events. The Federal Sentencing Guidelines for Organization (FSGO) was established by Congress and set the tone for organizational ethnical compliance programs in the 1990s. FSGO broke new ground by rewarding and penalizing companies for their ethical compliance programs. Even though the FSGO has made enormous strides it will not be enough to prevent serious penalties.

Companies must develop cooperate values, enforce its own code of ethics, and strive to prevent ethical misconduct (Ferrell, 2008). Business Ethics in the 21st century Although business ethics in the 1990s appeared to be an institutionalized concept, evidence emerged in the 2000s that business executives and managers had not fully embraced the public desire for high ethical standards. One such executive, Dennis Kozlowski, former CEO of Tyco, was indicted on thirty-eight counts of embezzling $170 million of Tyco funds and netting $430 million from improper sales of stock.

Author Anderson, a “Big Five” accounting firm, was convicted of obstruction-of-justice conviction for shredding documents related to its role as Enron’s auditor. The reputation of the firm was destroyed and lost all their clients and eventually went out of business. Author Anderson was also questioned for their involvement in audits involving Halliburton, WorldCom, Global Crossing, Dynegy, Qwest, and Sunbeam for their questionable accounting practices. These examples of misconduct increased public demand for improved standards in business.

In 2002, Congress passed the Sarbanes-Oxley Act, which made securities fraud a criminal offense and strengthened penalties for corporate fraud. It created an accounting oversight board for greater transparency in financial reports to investors and other interested parties. Top executives are required to sign off on their firms’ financial reports. Company executives must now disclose stock sales immediately and prohibits companies from giving loans to top managers. The Sarbanes-Oxley Act and the FSGO have institutionalized the need for top manager to discover and address ethical and legal risk.

Business leaders should view that ethical misconduct as the greatest danger to their companies. Ethical disasters can be damaging to company’s reputation and will significantly have an effect on their bottom line (Ferrell, 2008). What are factors that could change ones views of a business’ ethical behavior? In today’s uncertain business environment, traumatized by countless corporate scandals has brought a lot of attention to the social and ethical practices of business. The highly televised, Enron scandal was exposed when the company filed for bankruptcy.

The degree of fraud impacting investors, employees, and others became known to the public. Business criticism is more prevalent than ever because people are more affluent, educated, and better inform because of the access to information. Twenty-four hour news coverage, investigative news programs, the internet, the revolution of rising entitlement mentality, the rights movement, and a philosophy of victimization. Businesses now, more than ever, must realize that there is a more informed society and businesses are being watched (Buchholtz, 2009).

What interactions between business and society alter societal expectations? Business is increasingly held to greater standards of social performance, reflecting an imbalance between its traditional conduct and the expectations of society. A corporation commitment to its social responsibilities will go a long way to shape societal approval. There are four levels commitment in social responsibilities. First and foremost, economically, businesses strive to make a profit, maximize stakeholder wealth and value, create jobs for the community, and create goods and services to the economy.

Legally abide by all laws and government regulations. Ethically, follow standards of ethical of acceptable behavior as judged by stakeholders or any one other interested party. Finally, philanthropic responsibilities refer to activities not required of business but promote human welfare or goodwill. In my opinion, this level of commitment has the greatest impact on society’s view of a company (Ferrell, 2008). The uses of these levels of responsibilities are attempts by businesses to meet societal expectations and become a better corporate citizen.

In conclusion, understanding the meaning of ethics and morality and how they relate is important when trying to understand why people act or react in a given situation. Knowing how business ethics has evolved over the years and how far we still must go to create a happy median between business and society.. As technology becomes more available, society is more aware of corporate social responsibility. With this information, consumers are better able to make informed discussions on which companies to do businesses with.

Finally, economic, legal, ethical, and philanthropic interactions between business and society will alter societal expectations of a business good or bad.

References

1. Buchholtz, C. (2009). Business and Society: Ethics and Stakeholder Management. (7th Edittion ed. , pp. 3-7).
2. International: South-Western. Ferrell, F. F. (2008). Business Ethics: Ethical Decision Making and Cases. (7th Edition ed. , pp. 11-14). Boston, New York: Houghton Mifflin Company.
3. Simpson, C. (2004, October). Should I or Shouldn’t I? An Ethical Conundrum. Retrieved September 23, 2009, from http://ebscohost. com: http://search. ebscohost. com/login. aspx? direct=true&db=lfh&AN=14597954&site=ehost-live
4. Dictionary. com. (2009). Retrieved September 3, 2009, from Dictionary. com: http://dictionary. reference. com
5. LoveToKnow. com. (2009). Retrieved September 3, 2009, from LoveToKnow. com: http://business. lovetoknow. com/wiki/A_Definition_for_Business_Ethics
6. Borade, G. (2009, March 24). Difference between Ethics and Morality. Retrieved September 22, 2009, from buzzle. com: http://www. buzzle. com/articles/difference- ethics-and-morality. html

Dealing with business is not as easy as 1-2-3. We also have to think about business ethics. Just like any other settings, the business setting also requires moral and ethical aspects. Business ethics comprise of principles and values that are applied in a ‘commercial’ context. Because of the moral and ethical issues that one might encounter in a business setting, business ethics have become an important part of the corporate world (“Business Ethics”, 2007). Overview of Business Ethics There are different kinds of business ethics that apply to the different aspects of business.

There is what we call general business ethics that can be used or applied to almost all the aspects of a business. There is also professional ethics which apply in specific areas of the business. Under the professional ethics are the accounting information ethics, marketing ethics, human resource management ethics, production ethics and ethics on intellectual property. General business ethics include corporate responsibility, corporate governance, industrial espionage, corporate manslaughter and many more.

Ethics regarding accounting information involve bribery, kickbacks, etc. Marketing ethics, on the other hand, involve price fixing, price discrimination, and content of advertisements, advertising strategies and many more. Human resource management ethics, of course, deal with employer and employee relations. This involves sexual harassment, privacy, discrimination and many other issues. Production ethics is concerned with the products that the company is producing and to make sure that they are of good quality and does not cause any harm to the consumers and the employees.

Lastly, intellectual property ethics is all about the ownership of knowledge and skills of the employer and employees (“Business Ethics”, 2007). UNETHICAL PRACTICES AT BOEING Boeing is one of the most respected companies when it comes to the Airline industry. The company has been making planes for different airlines and even for individuals. Boeing is actually the largest manufacturer of aircrafts in the world. They have been producing commercial planes for different airlines and are also producing military aircrafts.

Because of this reputation of Boeing, they have also been a major service provider to NASA and their stocks are publicly traded in the New York Stock Exchange. The Michael Sears and Darleen Druyun Conspiracy In 2003, news broke about the firing of Boeing executives due to unethical practices. Michael Sears, then Chief Financial Officer of Boeing Co. was sentenced a 5-month imprisonment due to unethical practices. The case also involved Darleen Druyun, one of America’s greatest military contractors.

Before applying in Boeing in 2002, Druyun first worked at the military. Druyun has a very good reputation since she was the one dealing with billion dollar contracts with fighter jets, cargo planes and other services for the Air Force. Darlene was so much respected in the field that she has to be called the “Dragon Lady” because of her fierceness in dealing with those kinds of contracts (Farber, 2004). On the other hand, ex-CFO Michael Sears is also respected in his field. In fact, many expected him to be the next president of the huge aircraft company.

Despite their own reputations in their field they still did not manage to free themselves from the scandals. But what was really the story behind this Boeing scandal that ruined these two executives’ reputations and so as the aircraft company’s? Sears was said to have talked to Druyun about her transfer to Boeing while she is still working in the military. For some, this would not seem to be a bog deal but Druyun is the one responsible for a billion dollar tanker deal with Boeing and the military.

That time, the military was planning to lease 767 refueling tankers but the said plan was still on hold (Holmes, 2005). What really seemed to be unethical is that Darlene talked to Sears about her transfer to Boeing even before she left the military. What is worse is that Heather, Darlene’s daughter also talked to Sears about the retirement of her mother in the military. After they have been fired from Boeing when the company found out, Druyun was sentenced a nine-month imprisonment. However, the court can reduce the sentence if Ms.

Druyun cooperates with them in finding out other unethical practices at Boeing. Because of Druyun’s cooperation with the further investigation, Michael Sears was proven to commit conspiracy with Darleen Druyun regarding her job negotiations. Druyun also admitted that she has overstated prices on Boeing contracts so that Boeing would have more reasons to hire her. Because of this, a lot of Boeing’s rivals protested about the favorable opportunities given to Boeing by Druyun (Markon, 2004).

If the protests continue, it would cost the Pentagon a huge deal of money if the Defense department decides for reimbursement. If this happens, it will seem that the tax payers’ money will just go to waste because of the fault of some greedy people. Instead of the money adding to national security, hard earned money from the tax payers will just go to waste because of the personal intentions of these corporate thieves. It is very unethical for Druyun to overstate prices just to be in favor of Boeing.

With that, we can consider the overstatement of prices as an accounting ethical breach. What Sears and Druyun did can also be considered as an industrial espionage which is considered as an ethical breach. Industrial espionage is also known as corporate espionage. An industrial espionage is when documents, trade secrets and other confidential information are unlocked for commercial purposes or personal interests and not for national security. Industrial espionage is very common in the automobile industry especially when talking about government deals like the military.

Since Druyun disclosed confidential information about the bids in the tanker deal, we can say that it is very unethical for the two executives to conspire because both parties are involved in the said deal and it is unfair for the other bidders. Harry Stonecipher’s Office Romance Aside from the scandal of the tanker deal and the hiring of the military contractor, there are other practices at Boeing that were said to be “unethical”. One of them is the proven extramarital affair between former CEO Harry Stonecipher and an unnamed executive.

After Stonecipher admitted that he was really having an affair with the said executive, e was forced to step out of the office. Some argue if office romance be considered as an ethical breach in business since it involves the personal lives of the persons involved and not the business itself. There are still questions on whether the personal conduct of an employee be considered as standard in their performance in their job. According to Lewis Platt, former CEO of Hewlett Packard and the one who replaced Phil Condit after his resignation in Boeing, a CEO must act as a role model and must show professionalism.

Stonecipher was forced to resign because he is married and Platt did not think that he is showing professional behavior in the company. Technically, Stonecipher did not violate Boeing’s code of conduct but further investigation inside the company found out that Stonecipher’s capability to lead the company as CEO is questionable. This office romance is not new at Boeing at all. Ex-CEO Phil Condit married one of his secretaries and reportedly dated a receptionist in Boeing in 2003 There are actually no specific rules about office romances at Boeing especially those that involve executives and subordinates.

However, according to Boeing spokesperson Anne Eisele, ethics do matter a lot in the company. When the office romance scandal happened, Boeing hasn’t fully recovered yet from the conspiracy scandal of Sears and Druyun that is why they are very much concerned on how to rebuild the company’s reputation. According to John Dienhart, an ethics professional at Boeing, even of Stonecipher did not violate any specific rule or code of conduct, he did violate the spirit of the code where in you must not take actions that will put the company into a bad light (Holt, 2005).

Personally, I wasn’t sure if there really are rules about having an affair inside the office especially with bosses and subordinates. However, I think it is not morally right since the persons involved are in the corporate scenario and must show professionalism at all times. What made the act more unethical to the people is the marital status of Stonecipher. Also, he was the CEO at that time that is why I agree with Boeing that he should always take the lead and should be a role model to his subordinates.

I also agree with Dienhart that even though the former CEO did not violate a specific rule in the company’s code of conduct, he still somehow violated the spirit of the code that he should not, in any way, especially that he was the CEO that time, give a company a bad reputation. With all the scandals in Boeing, there are still people who think that these are not all the scandals inside the company. Because of the Sears and Druyun scandal, the government and the company itself are still looking for unethical behavior at Boeing. Why the Company chose to be unethical

With the case of Michael Sears and Darleen Druyun, the reason why the two executives chose to be unethical is because of their personal interests. Actually, we are not sure if the two executives are the only people involved because court evidences show that Michael Sears sent an email to other executives about the hiring of Druyun. There were also allegations that Sears even conducted an executive meeting about the transfer of Ms. Druyun to Boeing. With these, we cannot really say if the two executives are the only ones who have been unethical or the whole company.

Well, I think Ms. Druyun chose to be unethical because of her intentions in transferring to Boeing. She falsified some documents to make them favorable to Boeing which can make her more worthy in being one of Boeing’s executives. With Michael Sears, I think his intention is to put Boeing in a more reputable and higher position. If Boeing happened to win the tanker bid, Sears could be acknowledge for being the good Chief Financial Officer. On the other hand, the case of Harry Stonecipher and his unnamed executive mistress does not clearly show a reason for being unethical.

It is more of a personal matter that is why we cannot say why they chose that kind of act. But only one thing is certain, their being unethical is their own personal choice but the consequences also brought the company a bad reputation. References: Business ethics. (2007, July 24). In Wikipedia, The Free Encyclopedia. Retrieved 11:00, July 24, 2007, from http://en. wikipedia. org/w/index. php? title=Business_ethics&oldid=146683092 Farber, G. (2004). The boeing military contractor scandal. Retrieved July 23, 2007, from http://www.

windsofchange. net/archives/005101. php Holmes, S. (2005). What Boeing Needs to Fly Right. Retrieved July 20, 2007, from http://www. businessweek. com/bwdaily/dnflash/mar2005/nf2005038_1218_db042. htm Holt, S. (2005). Personal lives of executives under scrutiny. Retrieved July 22, 2007, from http://seattletimes. nwsource. com/html/businesstechnology/2002200140_boeethics08. html Markon, J. (2004). Ex-Boeing CFO Pleads Guilty in Druyun Case. Retrieved July 21, 2007, from http://www. washingtonpost. com/wp-dyn/articles/A51778-2004Nov15. html