Course Name /Section
Table of Contents
Business Ethics 4
Ethics Issue 4
Ethical Decision-Making Process 5
Identification of Lenses 9
Application of Lenses 9
The significance of Ethics in Business 12
Impact of Ethics on Leaders and Followers 14
Personal Experience 15
The main aim of this essay is to provide a thorough analysis of a business ethics decision situation and assess the possible resolutions through various ‘lenses.’ Added to this, I will define ethics and critically examine its significance in business. To compose this essay, I researched numerous peer-reviewed articles regarding the issue of business ethics. Upon doing so, I included in my essay how employing ethical standards affects both corporate leaders along with their followers. I further considered and discussed the weaknesses and strengths of employing ethical standards in the workplace. The purpose of my essay evolved to incorporate several ethical theories along with how they are employed in concepts such as sustainability, balanced scoreboards, and corporate social responsibility in organizations. In this essay, I also share personal and professional experiences that are appropriate. The final product is an essay that has successfully analyzed a business ethics decision situation and assessed the possible resolutions through various lenses.
Keywords: Business, Ethics, Stakeholders, Ethical Lenses, Ethical theories
Ethics, alternatively known as moral philosophy, is a philosophical branch that primarily deals with values concerning human conduct; especially human conduct that deals with the wrongness and rightness of certain actions and the badness and goodness of the outcomes and motives of such actions (Meyer et al., 2017). This essay defines ethics as an individual’s situation-dependent employment of moral standards, which derive from the beliefs, traditions, and values that have grown in societies concerning wrong and right conduct (Anderson et al., 2014).
Business ethics involve the study of proper business practices and policies concerning potentially controversial matters such as bribery, discrimination, fiduciary responsibilities, corporate governance, and insider trading (Meyer et al., 2017). Business ethics are often guided by law, while sometimes; business ethics offer a basic framework upon which companies follow to acquire public acceptance. Simply put, business ethics guarantee that certain trust levels exist between consumers and market participants with businesses. Business ethics transcend the moral code of wrong and right; business ethics try to reconcile what companies must legally do versus sustaining a competitive advantage over other businesses (Meyer et al., 2015).
For the required ethics issue needed for analysis in this essay, I chose a situation described by Scott Gerber, CEO of the Gerber Group. When CEO Scott Gerber discovered that one of his workers was clocking in his wife, who in reality was not showing up until three hours later, the company fired the employee without delay. After that, the fired employee showed up with his father; who had previously worked for the Gerber Group for two decades, and the two begged for another chance. The fired employee explained that he had recently been blessed with a newborn son, and inasmuch as it was a blessing, it was also a burden since his wife could not leave for work until he clocked out and went home. After pleading to be rehired, Gerber and his business partners after much contemplation decided to give the employee a second chance and rehired him. This decision was arrived at mainly because when his father worked for the company, he was a devoted and loyal employee for two decades (“7 Business Leaders Share How They Solved the Biggest Moral Dilemmas of Their Careers”, 2018). As stated by Gerber, “We decided to rehire him. The decision was a difficult one because technically, we caught him stealing from the company, and as a standard rule, we have a zero-tolerance policy for behaviors of this kind. But because his father had previously worked for us for two decades, and affirmed that his son would never be caught in such an act again, we thought it would be fair to give him one more chance.” (“7 Business Leaders Share How They Solved the Biggest Moral Dilemmas of Their Careers”, 2018) After reading this case, I gathered from it that longevity and loyalty are still upheld at some companies.
Ethical Decision-Making Process
Many companies encounter business ethics decisions almost daily. Some are straightforward and need little conscious deliberation; doing what is right simply comes naturally. However, some can be very challenging and complex. While we all know how to distinguish right from wrong, the procedure of deciding upon and implementing what is correct is not always apparent. Undoubtedly, ethical decisions are frequently the most difficult decisions made in business (Ford, 2013). They also bear the most significant outcomes. The ethical decision-making process will not resolve all the ethical dilemmas present in a business; however, it is intended to allow you to take a structured and disciplined approach to help direct you in your actions (Mattison, 2000).
As stated in the textbook, the ethical decision-making process incorporates various steps which I will vividly discuss. First is taking time and defining where the problem stems from. In this case, the problem was the employee clocking in his wife when in truth; she was not reporting to work on time as required by the company. Some initial analysis was needed for Gerber and his business partners to understand where the ethical principles needed to be incorporated. Gerber and his business partners needed to decide why an ethical decision had to be made and the consequences that are desired from the chosen action.
Secondly, Gerber and his business associates had to consult resources and seek assistance (Ford, 2013). Upon doing so, they needed to work on developing a strategy utilizing the resources and individuals around them. This is made evident when Gerber together with his business partners sat down and referred to company policies; however, they did not make their decision based on company policies. But it was important for them to refer to company policies in order to gain clarity from separate sources when establishing a strategy to tackle the matter.
Third, Gerber and his business partners had to think about the lasting effects before settling on a decision. While detecting the problem and searching for viable resources to help is the preferred course of action, any advice for methods of handling a matter should be filtered through the lens of how it may or will affect others (Jones, 1991). For illustration, if the employee had made known the difficulties his wife had with reporting to work on time due to the responsibilities brought along by a newborn child, the managers could have installed a policy that changed her reporting time. However, such a decision might have brought a detrimental impact on other workers or even clients.
Fourth, the decision-making process faced by the Gerber Group involved the consideration of regulations in separate industries (Ford, 2013). Standards and regulations established by other companies can be advantageous in developing ethical strategies. Leaders should highly regard how they handle certain issues. It is impossible for everyone to get it right a hundred percent of the time. Therefore, it is wise to see the bad and good side to become more informed about a decision which is to be made, and I believe the Gerber Group successfully executed this strategy before deciding on the employee’s fate. The decision makers might use one of the dominant ethic theories – rights, utilitarianism, or justice. Fifth, the Gerber Group had to decide on a decision (Jones, 1991). After consulting separately and referring to company policies, a decision had to be made. Since the decision will likely impact many (i.e., the employee, his father, his wife, and newborn child), it had to be carefully made. For extensive ethical issues that have become problematic in the workplace, great consideration must be taken before a decision is arrived at.
Upon the completion of the above five approaches, finally, the Gerber Group had to implement and evaluate. Here is where talk meets action. Researching and creating solutions to problems is easy for people; however, when dealing with ethics and morality, it can be difficult to put to into action finally. None gains from a plan that is not implemented; therefore, at some point, leaders must facilitate the execution of the ethical decision. Furthermore, the execution is not enough (Trevino, 1986). Evaluation permits everyone to see the successfulness or unsuccessfulness of the approach, and if some unintended consequences arise which were not foreseen by the leaders. Is the problem finally mitigated? Did things improve or worsen? Analyzing the issue aids those involved make out if the implementation was the appropriate response.
One of the most utilized and widely cited ethical models is the PLUS Ethical Decision-Making model. To form a cohesive and clear approach to enforcing a solution to an ethical dilemma; this model is established in a manner which offers the leader “ethical filters” to arrive at decisions (Bartlett, 2003). This model purposefully excludes anything associated with making profits so that leaders can concentrate on values rather than generating revenue. Every letter in PLUS signifies a filter that can be utilized by leaders for decision making. P – Procedures and Policies: does the decision adhere to the policies established by the companies? L – Legal: Will the decision violate any legal regulations or parameters? U – Universal: how does the decision relate to the principles and values set for the organization to operate? Does it align with the company culture and core values? S –Self: Does the decision meet the leader’s standard of justice and fairness? (Bartlett, 2003) This very lens appropriately fits with the virtue approach that makes the five common standards which I will discuss later in my essay.
These filters can be incorporated into the decision-making process so that leaders have a clear ethical framework as they embark on the decision-making process. Determining the problem automatically necessitates leaders to see if it is violating the ethical filters of PLUS. It should also be utilized in assessing the viability of decisions that are being regarded for implementation. No model is perfect, but the aforementioned is a standard way to regard four critical components that have a substantial ethical impact (Ferrell, 2000). All decisions must regard the impact to all stakeholders. This mirrors the Utilitarian approach discussed earlier. This approach seeks to do good for most and avoid harming others. There are various components to take into consideration when making ethical decisions. Regulations, procedures and policies, public opinion, perception, and also a leader’s morality constitute to how choices that question business ethics should be managed. While no approach can boast of perfection, a useful framework and a well-thought-out procedure can make handling ethical situations simpler.
While various situations may require certain steps to go before others, the above approaches are standard processes that leaders can utilize to approach ethical decision-making (Ritter, 2006). Now that I have discussed the ethical decision-making approaches, I will next discuss the lens that leaders can utilize to arrive at the final decision that leads to implementation.
Identification of Lenses
Decision makers, in this case, CEO Scott Gerber and his business partners, are required to evaluate decisions through all five ethical lenses critically. The five lenses of ethical insight: The utilitarianism of Bentham and Mill, the ethics of Aristotle’s Justice, the ethics of Locke’s freedom (rights), Aristotle’s ethics of virtue, and Kant’s ethics of debt (common good).
Application of Lenses
There exists five ‘lenses’ through which individuals can view moral issues. The first lens which I will utilize in my analysis is the lens which regards the highest balance of good over evil; this standpoint accepts that every moral dilemma or situation presents both disadvantages and advantages. This lens is identified as the Utilitarian ethical approach or theory. In this viewpoint, the ethical action course is one that brings with it the greatest balance of good (Noel, 1997). However, the challenge here is that what suits one person, culture, or organization, may be unsuitable for another. The theory affirms that the ethical approach is the one that brings with it the greatest good for the greatest number (Meyer et al., 2015). John Mill and Jeremy Bentham held that, we should maximize the good, i.e., bring forth “the greatest good for the greatest number.” Which I believe is what Gerber and his associates did when they chose to rehire the employee because he had a wife, a father, and a newborn son depending on him. Thus, the decision was made for the greater good of the employee and everyone depending on him.
The second ethical lens which I will utilize for my analysis is that moral issues are based on the philosophy that individuals possess dignity dependent on their capability to select what they will do with their lives. Secondly, is that people have fundamental moral rights to have their choices respected; as long as their choices do not impinge on or violate the choices and rights of others. This theory asserts that each person has a right to be provided with the truth and to be treated as a whole. As stated by the rights theory, an action is considered ethical if it regards everyone’s moral rights. According to this theory, what the employee did was very unethical as he violated the company’s policies and failed to inform the CEO of his situation, which would have otherwise been understood and dealt with separately; thus avoiding all the trouble, he had to go through to regain his job.
The third ethical lens which I will utilize is founded on Aristotle’s philosophy which asserts that equal is to be treated equally whereas unequal is to be treated unequally. This lens defines the concepts of discrimination and favoritism which it utilizes as metrics to appraise the ethical nature of inaction or action (Hayibor, 2017). The justice or fairness theory asserts that favoritism offers advantages to a few select with no sound reason for distinguishing them. It poses that discrimination foists disadvantages on persons who are no different from those on whom they are not enforced. Therefore, it concludes that both discrimination and favoritism jointly and singly are wrong, unjust, unfair hence unethical. Based on this theory, the action the employee received was favoritism reason being; a second chance was given him only because his father was a previous employee; this led the CEO and his associates to rule in his favor. Had it been another employee, would the same conclusion be drawn after hearing his/her side of the story? I believe in this case; favoritism was shown solely because the employee’s father was a former employee and he pleaded on behalf of his son. The CEO and his associates should have personally dealt with the employee and not involved a third party. I believe in so doing, their decision would not have been persuaded by outside voices but would have been made based on company policies.
Justice and fairness are critical issues in leadership Stakeholder theory. This very theory poses that a stakeholder’s disposition to sanction or cooperate a firm is a role of their perception of the unfairness or fairness of the treatment they receive from the company (Hayibor, 2017). Researchers and practitioners have observed that justice and equity may be distributive, intersectional or procedural (Kim, 2015). Therefore, ethical challenges can arise in the inactions or actions of distribution of outcomes, in the procedure of the distribution and the interpersonal relations between people and authority figures.
The fourth ethical lens which I will utilize for my analysis is based on the supposition that humankind’s destiny is linked and one’s good is inextricably joined to the good of their community. This theory – the common good theory, supposes that individuals are bound by their quest for common community values and goals. An inaction or action is perceived as ethical if it adheres to social values, beliefs, expectations, and assumptions (Warren, 2011). The common good is connected to organizational or societal culture, and great care must be taken to ensure that others who could potentially be affected are considered. This lens results in the Kantian Ethics, alternatively known as the Duty Ethics where great emphasis is placed on conforming to ethical duties or principles and fulfillment of responsibilities to fellow humans. An action or inaction’s moral value is determined by intent or motive, not the consequences. Through this ethical lens, inactions or actions are determined by reason and not emotions. This community theory is mirrored in the stakeholder theory where corporate leaders are expected to consider the consequences of their decision on people other than the stakeholders (Muller et al., 2014).
The fifth ethical theory posits that there are certain human ideals uncovered through a study which offers a full advancement of humanity than all humankind should strive to attain. These basic human ideals are known as virtues. These virtues are generosity, courage, integrity, fairness, honesty, self-control, and prudence (Andre et al., 2015). Virtues ethics highlight the role of a character along with the virtues that one embraces in the determination or evaluation of ethical conduct.
The significance of Ethics in Business
Business ethics is a type of applied ethics that examines ethical principles and ethical or moral problems that crop up in business environments (Warren, 2011). Business ethics applies to all facets of business conduct. It is pertinent to the behaviour of individuals and business organizations as a whole. Business ethics is part of Applied Ethics, a field in ethics that deals with ethical questions in various areas such as technical, legal, medical, and business. The quantity and range of ethical issues in business reflect the standard to which business is alleged to be against non-economical social values (De George, 2014). Business ethics is both a descriptive and normative discipline. As a career specialization and a corporate practice, the field is mainly normative. It takes a descriptive or an illustrative approach in academia.
The descriptive ethics category is the simplest to understand; it entails describing how individuals behave and what kinds of moral standards they adhere to (De George, 2014). Descriptive ethics integrate research from the fields of sociology, history, anthropology, and psychology as part of the procedure of understanding what individuals do or have believed concerning moral norms (Muller et al., 2014).
The normative ethics category involves evaluating or creating moral standards. Hence, it is an attempt to make out what people should do or if their current moral behavior is ethical. Traditionally, most fields in moral philosophy involve normative ethics – many philosophers strive to explain in their considered opinion what people should do and why they should do it (Alzola, 2008). Any attempts to quantify or measure ethical standards are normative.
In the practice of virtue ethics, there exist six core values (Walker, 2012). These six core values are Integrity, Honesty, Fairness, Citizenship, Loyalty, and Responsibility (Walker, 2012). Added to the above core ethical values, scholars have determined six basic moral principles. The first moral principle is the Golden Rule which asserts that we must do unto others what we would want to be done unto us. The second ethical principle is Immanuel Kant’s Categorical Imperative which asserts that if a given action is not right for everyone, then it is unreasonable. The third ethical principle is the Rule of Change by Descartes which posits that if a given action cannot be repeated, it should not be taken at all. The Utilitarian principle is the fourth moral principle which posits that actions that achieve the greatest or highest value must be taken (Sternberg, 2000). The fifth moral principle is the principle of Risk version, and it states that people should take actions that generate the least harm. The sixth and last moral principle is the “no free lunch” principle that posits that people should believe that virtually, all intangible and tangible objects are possessed by someone unless an explicit assertion states otherwise (Alzola, 2015).
In the main, business ethics posit that an action is required, permissible, or unethical, if it is an action that an individual of noble character would-or would not normally perform under such circumstances (Alzola, 2015). Therefore, what is correct and incorrect in virtue ethics is determined by reference to individuals and their traits. Leaders, employees, and managers of businesses are required to be virtuous people. It is therefore expected for them to understand and apply these principles in establishing their goals and missions, then in how they execute tasks (Alzola, 2015).
Impact of Ethics on Leaders and Followers
Muller et al. declared that in organizations, ethical issues could be placed in seven categories. These categories are optimization, transparency, relational, power and political matters, underperforming governance structure, and role conflict (Muller et al., 2014). Transparency is required to prompt ethical awareness through sharing information, which eventually ensures accountability for the performance of employees and their organizations. Issues related to optimization are at the core of the six-stage model by Kohlberg of increasingly augmented levels of moral sophistication (Muller et al., 2014). Relationship issues crop up from the dilemma of surrendering personal relationships to concentrate on the organization and vice versa. Power and politics issues arise from the utilization of politics or power to apply changes or decisions in projects. Issues of illegal actions include corruption, fraud, bribery, and blackmailing. Issues of role conflict surface from differences in career values, religious, legal, and cultural values. Finally, underperforming governance structure comes from little or non-compliance of governance institutions when their involvement is critical for company progress (Dickson, 2004).
Ethical scholars highly regard the assertion that shareholder-owned companies or corporations should increase shareholders’ wealth. Generally, they call for businesses to strive to serve all their stakeholders (Walker, 2012). The trust that is built between managers and the governance structure can impact the trust between managers and their stakeholders and ultimately their employees. A company’s leadership structure should highlight a stakeholder orientation. Such a structure should trust managers to properly handle ethical issues to increase trust between and among the participants in the company (Dickson, 2994). Leaders in companies involved in international operations must consider the fact that those in the driver’s seat who establish the rules and guidelines are disregarding, ignoring, and misusing the power imbalances (Enderle, 2015). Meanwhile, those affected who feel the impact first-hand may ho say in having them changed. In corporations, it is emphasized that corporations should regard the human rights of their stakeholders. Secondly, they should make certain that heir vendors or counterparts adhere to the same practice. Finally, they should conduct business in countries where violations of human rights are prohibited (Enderle, 2015). Such actions will abide by the concept that business solves societal challenges to guarantee the development and survival of humanity. It further conforms to the concept that economic gains are simply a milestone and not the end goal.
As reported by Enderle, there exist four ethical perspectives in dealing with international clients on both country and personal levels (Enderle, 2015). The first view involves a foreign individual or a foreign country; the foreigner must adapt themselves to the host. National borders are comparatively impervious in both directions; this is, “the when you are in Rome do as the Romans do,” but respectfully of course (De George, 2014). The empire type perspective is the second view whereby international relations are perceived as pure cross-national augmentations of prevailing domestic relations without considerable modification. This viewpoint is the “forgot your archaic sensitivities; I am present to civilize your approach.” From the host’s approach, the deemed asymmetric power relations regularly involves exploitations, repression, and misunderstandings (Enderle, 2015). The business ethics interconnection type is the third ethical view whereby each one maintains their values which are appropriated by both. The final view is the global ethical perspective which appreciates universal moral values that each one has to conform to. In my experience with working with various clients at separate times, I have been forced to make judgment calls upon which perspective makes sense, and every individual doing business with multiple cultures has to go through that process. Case in point, I have learned through my few years of employment and dealing with clients of different backgrounds to never unplug religious calls and never insult a religion when in a foreign land; ethics and morals are not universal, and yours are not higher or superior.
Justice or fairness may be procedural, intercontinental, and distributive. Customers, employees and stakeholders relationship and perception to corporations depend on their perception of fairness. Corporate leaders can successfully apply the principles of ethics in business dealings to develop the company’s relationship with all its stakeholders. Inasmuch as we would like to depend on people’s goodness in corporate leadership, we must establish duties that we expect of them. As seen in the ethical dilemma which I presented earlier in my essay, the Gerber Group had established duties for its employees which were; clocking in and reporting on time (amongst others). However, this was breeched when one of the company’s employees went against company policies and clocked in his wife when in reality, she was showing up hours later. It is required that everyone be accountable for the consequences of their actions. Determining motive or intention is challenging, but previous omissions or actions may be advantageous in the analysis of intentions. Once more, as seen in the Gerber Group Case, the company’s CEO together with his business partners determined their final action by looking at previous actions (of the employee’s father) who was a devoted and loyal employee. And upon pleading on his son’s behalf, Gerber and his partners after much deliberation decided to deal mercifully with the employee and rehired him. In Corporate leadership, the Justice or Consequential theory and the Duties Ethics may lend themselves to measuring, whereas the virtue ethics may be hard to quantify or measure.
Corporate leaders must continually consider the practice and understanding of ethical principles in their daily operations. As a leader, you want to believe that your employees are inherently good. Unfortunately, some employees will fall short in this area. When Gerber discovered that one of his employees was clocking in his wife who did not report to work until three hours later, the employee was immediately fired. Upon investigation, Gerber discovered he was doing so because he had a newborn that was being cared for by his wife. The employee acted on Intuitionism which asserts that stealing is wrong insofar as it causes people pain; however, it may be morally preferable to steal than to perish.
Our duties to our children can also justify stealing when it is the only option available to feed them. Gerber and his partners immediately applied Utilitarianism which asserts that stealing is wrong as it causes people unhappiness to see their possession go and they might need their possessions to obtain certain important goals. After the employee’s father pled on his behalf, Gerber and his partners had to revisit their decision and make the decision once more using ethical lenses. Ultimately, he was rehired even though it went against company policies but they chose to forgive the employee and magnify the loyalty and longevity which the employee’s father had previously displayed. The final decision was made through the lens of virtue ethics which emphasizes one’s character as the main element of ethical thinking, instead of rules of the acts themselves (Deontology) or their outcomes (Consequentialism).
Why forgive and rehire an employee who has been unethical in his doings? What makes forgiveness commendable? Forgiveness is simply not a matter of immobilizing guilt or lifting the burden of toxic resentment, however beneficial it may be psychologically and ethically. Forgiveness is not merely a therapeutic matter, as though the situation is just about you. Rather, when requisite conditions are met, forgiveness is what an ethical person would resort to because it expresses fundamental moral ideas. These include ideas of truth-telling; responsibility and respect; and reconciliation and peace. Forgiveness and second chances are a monumental step towards getting back to being human beings if the inhabitants of this world practiced ethics. For years, we have witnessed a decline in civility amongst individuals, for causes that when examined, are surprisingly petty, but have made an impact; it drives behaviors forth that lack of empathy and self-consumption have taken the spotlight. This does not assert that we are on an irreversible path; it simply means we need to bring words like dignity, honor, respect, and ethics back into the limelight. Suggested in this essay is critically looking at all actions of omission and commission, all regulations and rules, and all procedures and processes to ensure they are ethical before they are implemented.
A business incorporates a collection of different proprietorships. Ethics involve issues of wrong, right, justice, and fairness. Therefore, business ethics focus on ethical issues that surface in the commercial world. This essay has revealed that good ethical practices by businesses are extremely significant to the realization o f organizational success. An organization that embraces ethical ways of conducting business affairs is likely to obtain employees’ commitment, satisfaction, and loyalty (which was the case with the employee’s father as mentioned in the ethical dilemma). This, in turn, leads to heightened performance and quality of works. Such businesses will also exhibit good organizational values in their stakeholders’ eyes. Added to this, adopting good ethical behaviour increases competence, profits, business sales, loyalty, customer retention, et cetera.
Because the significance of business ethics cannot be downgraded in contemporary business, it is highly recommended that businesses should embrace ethical practices and use ethical lenses before arriving at decisions. Any kind of employee theft hurts a business and presents a difficult management situation to the business leaders. The manner in which an organization handles theft should depend on the organization’s policies and the severity of the infraction. Business ethics are fundamental not primarily in business, but in all facets of life reason being, it is a paramount constituent of foundation upon which a civilized society is established. A business that lacks ethical principles will surely fail sooner or later. It is critical to practice good ethical behavior and incorporate the ethical lenses as mentioned earlier before arriving at decisions. By doing so, business operations will not be negatively affected by stakeholders.
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