According to Hooker (2003), while business managers are trained and
educated to understand all about the business operation, from marketing to
finance, from production to distribution, a little effort has been made to introduce
business ethics. Business ethics is described by Sternberg (Morgan & Smit,
1996) as the application of ethics reasoning into the business practice to
allow the formation of morality within the business wherein issues are resolved
and clarified. While most use business ethics and corporate social
responsibility interchangeably, they are distinct from each other. Business
Ethics is about the moral value or the morality of decisions. For instance,
social responsibility demands that businesses provide education for adult
employees; business ethics, on the other hand, ensures that illiterate
employees do not sign contracts with negative clauses.
In this contemporary business environment, doing well means doing good or one can become successful in business by following ethical principles. According to Hooker (2003), businesses adopt ethical actions and principles with the motivation that they will build better reputation for the company. However, Hooker (2003) also pointed that these motivations, intrinsic or extrinsic, should not be the focal point that demands businesses to do well by doing good. Hooker (2003) believed that doing good for the business is like doing good for oneself. Businesses managers do good in business because they want to do good for their personal decisions. In a sense, ethics focuses on making a better world through the utilization of profit and the success of the business.
Economist Milton
Friedman (1970) and Albert Carr (1968) tried to say that businesses are
designed to earn and maximize profits. The goal of the business is to make
money and not to create social policies, these should be left out with the
government. However, as I noted earlier, the business manager cannot deviate
from his or her personal life. For instance, when the business manager does an
action to generate profit even if it is against the moral obligation, the moral
obligation of the person is thrown away. This will have an impact on the
perception of other people toward the person. One cannot also argue that if
business managers are owners of the company, they don't have the obligation to
bear the consequences of actions. This is still against the principle that the
action of the person will always reflect the person. Even in the organizational
level, unethical actions may lead to damaged company reputation. At a personal
level, a damaged reputation due to an unethical action in business also damages
the person and the business. We cannot separate the business and the person;
they are interlinked with each other as shown by past organizations.
In business, it is
necessary to make the right decisions; ethics is about making the right
decisions. Business management and business ethics have the same goal: making
the right decisions. This means that there is an interconnectedness between the
two. In the context of business, it is necessary to note that business actions
are always for the future. With the current behavior of the market that demands
for CSR and ethics, any mistake will always yield to negative result. Business
ethics is aptly applied in business because the people within the organization
are people with moral obligations, and consumers of the business are people
with morality, even if it is at minimal.
References:
Carr, A. (1968). “Is Business Bluffing Ethical,” Harvard Business
Review (January-February, 1968)
2-8.
Friedman, M. (1970). “The Social Responsibility of Business Is to
Increase its Profits,” New York
Times Magazine (September 13, 1970).
Reprinted in Thomas Donaldson and Al Gini,
eds., Case Studies in Business Ethics, 4th ed., Prentice-Hall (19xx) 56-61
Hooker, J. (2003). Why Business Ethics? Carnegie Mellon
University.
Morgan, N. & Smit, E. (1996). Contemporary Issues in
Strategic Management. Pearson South Africa.
