Introduction
This literature review will first of all explain what business ethics is and how important it
is to have in order for any business to be successful. Secondly, this paper will look at different
organizations and how they handle their issues when dealing with the many ethical problems or
issues in the organization. Also, this paper will discuss how business ethics and religion are
considered one and the same. The employee rights can also be placed as part of or in the same
category as religion. From there, this paper will talk about the history of business ethics. The
early American business ethics will be discussed along with any social issues pertaining to
business ethics. This will bring the discussion to the purpose of business ethics. Why is business
ethics needed and to whom does it refer? What is the importance of business ethics? Examples
of ethical programs and ethical decisions that affected them will be discussed in this paper. The
conclusion will summarize the importance of business ethics and the importance of having it ran
successfully in any organization.
So, how can business ethics be defined? It all depends on what business ethics mean to
you. Your interpretation of business ethics is as logical as anybody’s. The key to understanding
the definition of business ethics is the first step in this process. We all have a different
interpretation of business ethics and define it according to our own viewpoint or outlook. There
are as many ways that business ethics can be defined as there are people. Each person has a
different viewpoint on business ethics. This can present a challenge for many businesses. The
managers and directors of organizations need to recognize that the public do have its own
viewpoint of business ethics and they can’t get to far off course or the public will cause
problems.
The Importance of Business Ethics
Business ethics is needed each and everyday. It is needed while on the job and off the
job. There are choices in life that need to be made everyday that pertains to business ethics. But
sometimes we make the wrong choice. We sometimes chose to scheme our way out of situations
that we feel no one will notice that we have misused or abused the privileges that we once
possessed. The main place that this happens is on the job. Sometimes the actions that are taken
will damage our reputation and bring shame upon the person and those surrounding.
There is the pressure to succeed in raising children, influencing peers, and most of
succeed in business or job status. Because of these pressures sometimes mistakes are made and
wrong choices are taken. People are found doing bad things due to the fact that the ethics is
sometimes shady and it’s hard to distinguish between right and wrong. Research has been
conducted and it was found that people move from good to bad depending on the situation that is
placed before them. A simulated jail experiment done by Philip Zimbardo showed that people,
when put into powerful positions, can behave out of their character and become aggressive and
abusive (De Cremer, D. & de Bettignies, H.-C., 2013) The role of being a prisoner guard
brought about certain behaviors that made the people cross the barrier of good and evil. It is said
that there is no difference to business. People are brought to the place that they feel that being
unethical is the only way out. At the time, the thought of being ethical and honest is not part of
the equation. Ethics in business is needed so that people like this can be held accountable for
their actions. If ethics is not put into place then lives can be ruined due to fraud, deceptions, and
corruptions.
In doing research, it shows that people associate business with greed and competition (De
Cremer, D. & de Bettignies, H.-C., 2013). There is some degree of acceptance in businesses that
act greedy and competitive. If you are an honest person then some business is not for you. There
is a saying that “if you can’t stand the heat of the business kitchen than stay out of it” (De
Cremer, D. & de Bettignies, H.-C., 2013). Being in business is not an easy task now a day.
People break the rules all the time and they are violated and misconstrued. But no matter the
circumstance or situation there are some rules that cannot be broken.
Pushing the limits of a situation is alright as long as the law has not been broken. It’s
alright to want bigger and better things. It’s alright to want to succeed beyond the expectations
that have been put upon you but the ethics of life keeps you from going too far. The laws of the
land will only allow you to go so far when it comes to pushing the limits in business. The
importance of business ethics come into play when situations come up in business that require
decisions concerning the limits in your business. These days the limits are checked to see how
far a business can go before crossing the line of being illegal. De Cremer et. al (2013) even says
that we don’t always check which actions are legally accepted. De Cremer et. al (2013) states
that we only focus on that which is not acceptable. Ethically this is wrong but if the law doesn’t
recognize that it is wrong then it must be acceptable. Pushing the limits can be shown as
breaking the law but because of the laws of the land it gets a little cloudy when it comes to being
right and being wrong. It always starts off small but corruption can end in only ethical failure.
Ethics is mostly about finding the grey zones so that it’s hard to take responsibility. I
don’t agree with this but let’s keep moving. When using the “pushing the limit” approach, it
creates the gray areas in our lives. The grey areas give more opportunity to be deceitful and
dishonest. These grey zones can be tricky but they actually become the default setting for when
business needs a little push or pick me up. As long as people can rationalize their ways they will
never find anything wrong with their behavior. It would never go this far if business ethics was
taken more seriously than it has been taken. When we can justify for doing something that is
partially right that only means that we are completely wrong. Being partially right just doesn’t
make it right. Pushing the limits on areas in business will affect it in the long run. Ethics may
seem unimportant but it is the most important attribute to have when dealing with business
issues. Honesty and integrity is the attributes that set ethics apart from others.
Issues in Business Ethics
When looking at issues in business ethics, the law gives the rules and regulations of
what a business can or cannot do. The government involvement in this process differs from
country to country. In some countries the government and big organizations are linked together
differently than in other countries. Like in Germany it is the law that workers have a
representative on any corporate board but that is not the case in the United States. The nations
have different ways that they handle their unemployment rates and the benefits that are given to
their workers. Whether health care is provided by the government or paid for by employers or
handled by each individual will make a difference in what is considered ethical for a business
to provide or not provide in the way of health benefits. Business practices differing background
causes some to be ethical in one country and not in the next.
Bribery is one of the issues in business ethics. Theoretically, bribery is considered to be
unjust, but yet it is practiced in many countries not excluding the US. In many countries bribery
has been exposed and told of the disapproval of their actions but yet it the problem still exist.
It is believed that there is not one country that bribery of some type is considered ethical and
defended. The United States passed the Foreign Corrupt Practices Act that forbid the
United States businesses and organizations in paying bribes to high-level government officials of
any country in the world (Fredrick, R., Editor). After this, other countries, which were under
public pressure followed this example. The backgrounds of countries may differ, but those
differences do not make bribery right.
The issue of bribery raises questions for managers in different countries. These questions
form a large part of the academic literature of international business ethics. Even though the
differences in ethical customs show problems for multinationals doing business in different
cultures, the simply claim of ethical relativism, “which says that because there are diverse moral
customs in different cultures, therefore there are no generally valid moral norms” (Fredrick,
Editor). They follow the principle of “When in Rome, do as the Romans do”. This means, if in
some countries they practice paying bribes then that is what will be done. The reason or excuse
that is given is not good enough to justify that they are giving or taking bribes. They use the
excuse that it is not there doing but it is the way of that particular country or society. Although,
in their own country, they would not bribe but in countries where it is practiced they will follow
the local custom. Companies that are located in the United States aren’t suppose pay bribes due
to the Foreign Corrupt Practice Act (FCPA), yet some organizations do not follow the rules and
regulations of the FCPA. There is no way to get around bribery because it is what it is. To those
who know about such acts that are taking place, you are just as guilty as the one who is giving
and taking the bribe. Under the law, being aware of bribery that is taking place is the same as
you being part of the transaction (Herz & Lawson, 2004). Bribery is a sin according to the bible
and it’s a sin according to the laws of the land.
International Business Ethics
International business ethics is the part of business ethics that deals with international
issues. It surrounds moral judgements made about issues, as well as the various theoretical
considerations connected with explaining and justifying these judgments. Other than this, the
term international business ethics has no one exact definition. It is used in many different ways
to refer to many topics. For some, it refers to the ethical dimension of any business relation
involving two or more countries. To others, it refers to transcend national viewpoints and
international business from an ethical viewpoint that is internationally neutral (Fredrick, R.,
Editor). In most countries, the taxes that are collected pay for those who are not able to take care
of themselves. Another name for this is welfare. Welfare is not available in some countries
because there is no international government that can handle the issues of fairly distributing the
monies.
It seems like that your conduct while at work has taken on a whole new meaning when it
comes to business ethics. Now a day, the simplest thing can get you in a lot of trouble on your
job. Maybe, you could even be fired or told “we don’t need your services any longer”. Why is it
that if there are problems or issues with a company that it is headline news that very day or either
the next? I would say it has something to do with the way that business is set up now and the
very core of it all deals with ethics.
It would seem that businesses have become more international and because of this they
are less accountable. By this I mean they are spreaded all over the world and are not held
responsible to no single area (Megone, C.C., & Robinson, S., 2003). Some years ago, there was
no such thing or existents of international business. Business was done with the local
communities and they kept the different companies informed of how well they were doing or if
there were any problems with the decisions that the company made.
Business Ethics and Religion
Let’s start this section off talking about the Malden Mills story. This company is a prime
example of business ethics and religion. It shows how important religion can be in shaping or
influences the attitude of people in business. It also shows that it isn’t a common act for
Americans to bring their church beliefs or faith traditions into the business decision making
(Frederick, 2008). Aaron Feuerstein showed business owners how to survive through a storm in
spite of the opposition. The business, Malden Mills, had burned down once before. It was
approximately 100 years from the date that the business burn to the ground once before. Now
once again the owners of Malden Mills were looking at the devastating fact that the building had
burned down for the second time. Malden Mills manufactured upholstery fabrics, and Polartec
and Polarfleece fabrics, which supplied jobs for more than 1,400 people (Anonymous, 1997).
They were looking at 75 percent of the total workers of Malden Mills being without a job
(Anonymous, 1997). Feuerstein announced that all the staff and employees would remain on the
payroll of Malden Mills while the construction was going to rebuild the business. That meant
that no matter how long it took, those who were without a job would continue to get paid even
though there is no job for them to perform. Because of this ethical act of kindness, Feuerstein
was the center of attention. He received interviews on television, cover stories in magazines, and
was invited to the State of the Union address by the President of the United States. Feuerstein
said that he had no chose in the matter. He knew what was right and what was wrong. He was
all about doing what was right. He said,
"Everything I did after the fire was in keeping with the ethical standards I've tried to
maintain my entire life, so it’s surprising we've gotten so much attention. Whether I
deserve it or not, I guess I became a symbol of what the average worker would like
corporate America to be in a time when the American dream has been pretty badly
injured." (Anonymous, 1997).
The Feuersteins had the right attitude and the right mind set for the task that was placed before
them. It does not matter how much is lost, it only matter how much can be gained. They lost
much but they gained in the heavenly. There is a parable found in Luke 10:25-37. It says, “And
behold, a certain lawyer stood up and tested Him, saying, “Teacher, what shall I do to inherit
eternal life?” He said to him, “What is written in the law? What is your reading of it?” So he
answered and said, “‘You shall love the LORD your God with all your heart, with all your soul,
with all your strength, and with all your mind,’ and ‘your neighbor as yourself.’” And He said to
him, “You have answered rightly; do this and you will live.” But he, wanting to justify himself,
said to Jesus, “And who is my neighbor?” Then Jesus answered and said: “A certain man went
down from Jerusalem to Jericho, and fell among thieves, who stripped him of his clothing,
wounded him, and departed, leaving him half dead. Now by chance a certain priest came down
that road. And when he saw him, he passed by on the other side. Likewise a Levite, when he
arrived at the place, came and looked, and passed by on the other side. But a certain Samaritan,
as he journeyed, came where he was. And when he saw him, he had compassion. So he went
to him and bandaged his wounds, pouring on oil and wine; and he set him on his own animal,
brought him to an inn, and took care of him. On the next day, when he departed, he took out two
denarii, gave them to the innkeeper, and said to him, ‘Take care of him; and whatever more you
spend, when I come again, I will repay you.’ So which of these three do you think was neighbor
to him who fell among the thieves?” And he said, “He who showed mercy on him.” Then Jesus
said to him, “Go and do likewise.” (NKJV) The Feuersteins were like the Samaritan to the
workers of Malden Mills. They probably were already on hard times and then this accident came
to put them back even farther in debt or despair. Just as the made was beaten, robbed, and left for
dead, the employees of the factory were beaten down will bills and mortgages. Along came the
fire to rob them of their money and possessions. They felt like they were dying on the inside. It
was better to be nub and not feel than having to go through this painful ordeal. But the
Feuersteins stepped in and took care of them. They put bandages on their wounds and took them
to a place where they will be looked after until they could return.
The new building that was built was magnificent. It had a glow about it that lite up the
whole neighborhood. Feuerstein stated that, "The building will be lit up all night. It’s warm,
inviting glow will be very unlike the glow from the fire. This will be the glowing warmth of a
'living building,' reflecting the company's philosophy," (Anonymous, 1997). This one single act
of kindness in business conduct gives testimony to the importance of religion to business ethics.
Even though the law likes to separate the state from religion, ethical conduct is a very important
factor in business. Just from the act of Aaron Feuerstein alone shows that religion plays an
important part in the business world. Frederick (2008) believes that religious values are
examples that people need to shape their conduct. Business ethics really cannot afford to ignore
the part that religion play in the business industry.
Just about every major religious tradition that is found in the Bible says that individual’s
business life shows an important measure of their faith and if they chose to, could use their
business as a stepping stone to show forth the Word of God. The interpretation of the Word of
God will show moral guidance in how it can be used in the business world. For instance,
Matthew 5:17 states, “Do not think that I have come to abolish the law or the prophets; I have come
not to abolish but to fulfill,” (NKJV). This establishes the thought that maybe people need to stop
depending on the law so much and start looking to the Word of God (Martin Calkins, 2000). By
this, Christians would start reading that Bible more. Another instance is the parables that are
found in the Bible. The parables of talents (Mt. 25:14-30), the dishonest manager (Lk. 16:1-13),
and my favorite the rich man and Lazarus (Lk. 16:19-31), all teach proper ways in how to handle
material possessions, wages and human enterprise (Martin Calkins, 2000).
In looking at the word of God, a religious ethic that is based on purely love and serving
others, is applied to business. It is true that the Bible doesn’t have many economic theories but
the actions that take place is a guidance for others showing how the Word of God can be applies
to this worldly business system. Labor, in the Bible, is more of a form of worship and a way to
take part in the building up of the Kingdom of God. 1 Corinthians 15:58 states, “Therefore, my
beloved brethren, be steadfast, immovable, always abounding in the work of the Lord, knowing
that your labor is not in vain in the Lord.” (NKJV)
History of Business Ethics
There isn’t much that can be found on the history of business ethics. The history of
business ethics goes all the way back to the origin of business. It has been adopted world-wide,
and its meaning is different all over the world. Business ethics is simply the everyday moral to
business. The term business ethics was started back in the early 1970’s, which is not very long
ago. By comparison, business ethics is a very young field.
Early American Business Ethics
It wasn’t until the mid-1970s that American business ethics became an academic topic.
American business ethics includes a great deal of commentary on social issues because of its
roots in social ethics. Business ethical codes often place significance on the activities of a
corporation and the activities of individual employees as representatives of their corporation.
These activities fall into several lines of theory, and many organizations subscribe to more than
one. Theoretical areas of responsibility may include environmental protection, honest marketing,
leadership emphasis, quality offerings and financial culpability. As a nation founded and
continuously developed by people from all over the world, an emphasis on the importance of
diversity is one defining aspect of American business ethics. Ethical benchmarks are another
common part of the American business environment. American ethical systems often function
within a specially described framework, such as an official corporate code. These official codes
provide benchmarks that help management and the public evaluate ethical standing and progress.
Some types of ethics are specific to the industry. Different types of industry-specific ethical sets
include medical ethics, management ethics and legal ethics. Ethics could also be split into
personal business ethics, sometimes called workplace ethics, and large-scale moral efforts, called
corporate ethics. Both workplace and corporate ethics combine to create a business's moral
climate.
Purpose of Business Ethics
If we want our children to have and show forth the ethical traits of character we love and
cherish, we have got to start teaching our children and grandchildren these traits. They need to
be told of the reasons why they are needed in their lives. If they aren’t taught these ethical traits
than they will not be able to identify them when they are older. Here a few ethical traits that
some well-known authors, actors, actresses and singers have passed down to their children and
love ones. These same ethical traits can also help others in the business world.
G.K. Chesterton states, “Ethics is a code of values which guide our choices and actions
and determine the purpose and course of our lives.” (Floyd, L. A., Xu, F., Atkins, R., &
Caldwell, C., 2013). This signifies that what we find of worth in life should also guide us to our
purpose in life. This purpose in life will most likely follow the code of ethics that can be applied
to our lives concerning what it is we do to make a living. Booker T. Washington says, “There's a
hole in the moral ozone and it's getting bigger.” The morals of people today are not like they use
to be. What once was wrong is now considered right and vice versa. There is something wrong
with a society that approves of things that are considered an abomination to God. Another
ethical trait that Floyd et. al (2013) wrote came from an unknown artist which claims that,
“Character is what you are in the dark.” Meaning, what you do and how you act behind closed
doors really determine your ethical character. This shows what your personal nature is all about.
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