CORPORATE ETHICS

Corporate Ethics

Corporate Ethics

Introduction

Ethics in the corporate world is a key concept that has gained importance, more so in the recent years, possibly due to the very publicized and prominent scandals of 2002 concerning Enron, Aurther Anderson, and snowballed effect to another scandal of WorldCom.

It created more awareness among the stakeholders which is making ethics harder and harder to ignore. The noise on Ethics in the corporate world has gained a key place not only due to the Bad guys, also due to Good guys, one such company who has been at the top of the list on the fortune 500 is GE. Other companies being Starbucks, Johnson and Johnson, Southwest

Corporate ethics is based on broad principles of integrity and fairness. It focuses on internal stakeholder issues such as product quality, customer satisfaction, employee wages and benefits and local communities and environmental responsibilities.

Some ethical decisions made by businesses do not improve profitability, often it adds to their costs. For example, good ethics is consideration for the environment or catering for the needs of employees. Marks and Spencer actually referred to 'ethical trading' in its Annual Review and Summary Financial Statement 1999. The company goes even further to provide audio tapes of its Annual Review for the visually impaired.

The corporate world cannot be easily divided into "good guys" and "evil companies". Companies are dysfunctional families' writ large. Mistakes are built into life, including the life of corporations. Self scrutiny and accountability are essential. The measure of a company's integrity is not how loudly it beats its own chest, or whether it blunders, but its respect for its stakeholders and its responsiveness to problems. For instance, "In Honduras, Sweatshops can look like Progress".

In reality, companies face grave difficulty in determining what actions are 'ethical' or 'unethical'. Managing employees in the workplace holds tremendous benefit for leaders and managers, both moral and practical. This is particularly true today when it is critical to understand and manage highly diverse values in the workplace. It isn't from lack of examples that managers aren't better at managing ethics in the workplace- they require more practical information about it. Many leaders and managers believe business ethics is religion because it seems to contain a lot of preaching. They also think it is irrelevant because too much business ethics training avoids the real-to-life complexities in organisations. It ought to be fairly easy to choose between right and wrong by relying on principles, but business activity often demands that we choose from alternatives that are neither wholly right nor wholly wrong. Many ethicists assert that there's always a right thing to do based on moral principle, and others believe the right thing to do depends on the situation- ultimately it's up to the individual. Many philosophers consider ethics to be the "science of conduct".

Egoism: under the normative doctrine, believes one ought to act in maximizing benefit for one's self.

Utilitarianism: is about good consequences, looks for maximum benefit. Ends justify the means. Corporations can sometimes end up looking at the ...