This paper emphasises how business ethics works and what role of importance it plays in todays businesses. All in all, the paper highlights all the important aspects that the term Business Ethics entails. As this matter is of high importance in the modern corporate world, this paper contains very valuable information.
Reflective Paper
Peter Roessel
Post University
2018
The subject of business ethics is the application of ethical principles to the field of economic activity. Central values are humanity, solidarity and responsibility. The justification of ethical standards derives from the consequences of economic action on other people and the environment. Standards for this are social justice and sustainability. It is not the task of business ethics to work out instructions. Rather, its function is to guide current debates through reflection, methodologies and critical analysis.
First of all, it is important to highlight that ethics can be divided into different subcategories. As a scientific discipline, ethics is divided into descriptive and normative ethics. While descriptive ethics describes how people actually behave, normative ethics seeks to answer the question of how to act. Normative ethics, as the most important field of practical philosophy, can be subdivided into material and formal ethics. Material ethics assume that concrete norms and values derive from religious beliefs or lend themselves to social practice in which people should direct their actions. Formal ethics, on the other hand, foregoes the specification of concrete material norms in favor of the derivation of formal-procedural principles of dialogue, which only show how ethical reflection processes are to be carried out. In this case, it is assumed that ethics can attain intersubjective validity only if it is not based on norms influenced by traditions and religion, but individuals can determine the moral good by means of procedural norms in dialogues or discourses. Business Ethics provides guidance as to the normative principles by which decision makers should direct their actions in order to constructively deal with situation-related different norms and values. At the same time, corporate ethics raise awareness of the need to create structural and organizational cultural conditions for ethical reflection in companies.
Based on this basic understanding, a fierce discussion of corporate ethics has developed in the Anglo-American as well as within Western orientated European countries over the last 20 years. There are a variety of different approaches that answer the relationship between ethics and economics differently. There is agreement, however, that dealing with corporate ethics seems imperative, because entrepreneurial activity always has an ethical dimension besides the economic one. In the end, every decision is shaped by values and norms that are individually shaped as "moral prejudices" of the decision-makers. These provide starting points for targeted ethical reflection. In the decision-making process, they influence the information search, processing and evaluation that precede the concrete decision. Accordingly, a "moral-free space" does not really exist for entrepreneurial decisions.
The suggestion that there is a need for companies to assume ethical responsibility often comes up against the criticism in practice that morally flawless behavior is merely incurring financial costs and has negative economic consequences. Many economists point to ethical reflection even in the field of philosophy and stress the profit principle as a guiding idea of entrepreneurial action. According to neoclassical understanding, the maxim of maximizing profits ultimately even relieves the companies of ethical responsibility. After understanding a modern business ethics, profit as the goal of entrepreneurial activity is still a necessary prerequisite for securing the company's continued existence.
However, the societies imagination of a company follows the model of the honorable businessman. In addition to legality and legitimacy, compliance with legal provisions and an appropriate consideration of moral norms, are demanded. Subcontractors with low wages, usury, balance sheet manipulation, mass dismissals as well as relocations abroad lead to protests and to loss of image. Even successful growth developments with high profits are criticized as being overstating the social partners, unless they are given special consideration. Particularly in the criticism are investment companies, the companies acquire, in the short term to boost results and to achieve above-average profits through the distribution of assets, but also investment companies whose relationship to the real economy barely exist. As early as 1918, Heinrich Pesch stated: "And does the wealth which accumulates in the hands of individuals satisfy desire? The more people they acquire, the more they become greedy, more ruthless, more and more unscrupulous. " Many companies try to counteract this by incorporating corporate social responsibility (CSR) or corporate citizenship programs into their organization. Such an attitude is actively promoted by, amongst others, the United Nations through the Global Compact program.
All in all, organizations learn from experience, from transferring knowledge from other organizations, from acquired knowledge and from self-referential, new knowledge. A learning organization is one that is capable of generating, collecting, and communicating knowledge, and that can change its behavior based on insights gained. Furthermore, organizational learning entails the ability of an organization to discover and correct errors, and to change the organizational value and knowledge base in such a way that new problem-solving and action competences arise. It is assumed that organizations represent organisms such as living things that are basically capable of learning. It includes the ability of an organization to discover and correct errors, and to change the organizational value and knowledge base to create new problem-solving and action competences. Organizational learning requires - unlike learning individuals - storage systems such as work instructions, leadership principles, databases, but also determines cultural characteristics that exist independently of individual employees and whose contents are constantly updated.
All things considered, ethics is something that plays a very vital role in businesses nowadays. As Immanuel Kant already said, "Act on the one maxim that you can at the same time want to become a universal law." (Kant, 1785). Kant's compulsory ethics or ethical ethics opposes the teleological or epistemological ethics to which utilitarianism is to be reckoned with, in which the goal of action is the greatest happiness of the greatest number and not, as in the categorical imperative, the question of what would be, if everyone did. At the end of the day, everyone has to decide for himself what decisions to take and whether these decisions are to be considered as ethical or as unethical. Additionally, one has to know, when taking an unethical action or decision, if he can live with this decision. Being profitable certainly is the main function of the majority of businesses. People always have and will continue to look for ways of how to use and exploit the system in order to get the best possible outcome for oneself. Therefore, being completely ethical correct is something that is not achieved by almost any operation in reality. The final question that thus arises is whether it is unethical not being ethical when the whole system is not. Comparable is the situation in professional sports. If doping would be legalized and everyone would do it, technically it would be able to be considered as ethical. To conclude, one has to figure out for himself to what extend he thinks it is acceptable to take unethical decisions and to live with them.
Sources
“Greenwood, M., & Freeman, R. (2018). Deepening Ethical Analysis in Business Ethics. Journal Of Business Ethics, 147(1), 1-4”.
“Grosser, K., Moon, J., & Nelson, J. A. (2017). Guest Editors’ Introduction: Gender, Business Ethics, and Corporate Social Responsibility: Assessing and Refocusing a Conversation. Business Ethics Quarterly, 27(4), 541-567. doi:10.1017/beq.2017.42”.
“Ciulla, J. B., Knights, D., Mabey, C., & Tomkins, L. (2018). Philosophical Contributions to Leadership Ethics. Business Ethics Quarterly, 28(1), 1-14. doi:10.1017/beq.2017.48”.
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- Peter Rössel (Author), 2018, Reflective Paper about Business Ethics, Munich, GRIN Verlag, https://www.grin.com/document/430712
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