Bus Ethics Outline and Thesis

RUNNING HEADER: Business Ethics 1

Business Ethics

Bribery and Corporate Social Responsibility

Jessica M. Otero

Rasmussen College

Author’s Note

This research is being submitted on December 8, 2013 for Business Ethics course before Dr. Chris at Rasmussen College.

A bribe is a financial or other inducement or reward that is sought, offered, promised or provided with the intention of gaining any commercial, contractual, or personal advantage. We have set out below some examples to assist you so you are better equipped to understand what a bribe may consist of.

Examples of Bribery

Offering a bribe

You offer a potential client tickets to a major sporting event, but only if they agree to do business with us. This would be an offence as you are making the offer to gain a commercial and contractual advantage. We may also be found to have committed an offence because the offer has been made to obtain business for us. It may also be an offence for the potential client to accept your offer.

Receiving a bribe

A supplier gives your nephew a job, but makes it clear that in return they expect you to use your influence in our organization to ensure we continue to do business with them. It is an offence for a supplier to make such an offer. It would be an offence for you to accept the offer as you would be doing so to gain a personal advantage.

Bribing a foreign official

You arrange for the business to pay an additional payment to a foreign official to speed up an administrative process, such as clearing our goods through customs. The offence of bribing a foreign public official has been committed as soon as the offer is made. This is because it is made to gain a business advantage for us. We may also be found to have committed an offence.

Individuals who bribe or receive bribes can receive a prison sentence of up to ten years as well as an unlimited fine. If International Group Limited and its associated companies are found to have taken part in bribery or fails to put in place adequate procedures designed to prevent bribery, we could face an unlimited fine, be excluded from tendering for public contracts and face damage to our reputation. We therefore take our legal responsibilities very seriously.

Business ethics are the moral compass used to guide the direction of all business activities. They are a by-product of the society’s culture and beliefs which form a big part of the law. Business ethics are based on one major tenet; integrity. Integrity ensures that at all times the morally correct action is taken to promote fairness and justice (Donaldson, 1999). Bribery means that one pays to get preferential treatment as opposed to what the predetermined treatment they should be awarded. In business, bribery is most of the times in the form of exchange of monetary incentives in order to have some conditions overlooked or have some laws bent in the perpetrators favour (Paine, 2005).

Thesis statement: Increase in bribery cases in the business world has led to increase in substandard goods and services in the market.

Increase bribery allows for commercial enterprises to function illegally either in terms of the conditions of their company or in terms of the product they sell to the people. This explains the major change in consumerism. Contemporary consumerism is the based on informed consumers, it is characterised by the economic, social and cultural order of issues and how they affect the PR of a company and its product (Crew, 2010). Bribery ensures the following:

1. It reduces the trust that the public, who form the market for products, in law and business practices. This leads to extreme acts in consumerism like suing companies.

2. Decreases competition and reduces invention and innovation by the employees leaving very many opportunities untapped.

3. Giving unfair advantage to some businesses and some people creates unfavourable commercial environment that is not based on technical qualification. The quality of products decreases ad so does the market for the product.

At an individual level bribery limits the potential of a person; this is because human beings are competitive beings that perform better when stakes are heightened. When one knows that they can easily bribe themselves out of or into a situation, then they make no effort (Paine, 2005). At a corporate and societal level it has led to lack of trust and responsibility to the community. This means business is no longer based on mutual goals and objectives, but it is based on personal benefit.

The moral virtue theory is based on the premise that we all have a moral obligation to the society. This is because we live in a social world where interdependence is a result of our interactions (Bellah, 1973). Businesses have an obligation to offer consumers the best products rather than allow for substandard products to be supplied to the market. Bribery makes it seem like all the underlying problems have been solved.

Corporate and social responsibility should not be based on the philanthropy by corporate firms, it should be a duty. Social and corporate responsibility is based on the premise that we are all aware of the effects our actions have on the environment and on other people and what we are willing to do to ensure there is no negative effects.

Duty and responsibility are not separable. According to duty theory, we all have a duty to be the best we can and make the surrounding to be the same. In this case, the law should guide businesses and no one should get any favours that they do not deserve because they have the power to “buy it” (Hunt, 2005). Business ethics are based on the fact that a business will not knowingly sell substandard goods to the public in order to increase their profits.

Corporate and social responsibility has become something that most firms use to hide their malpractices which is on the rise. A company will get sponsor ‘Going Green’ projects to take the public attention away from the poor working conditions and labour exploitation that the company is involved in (Donaldson, 1999). However, currently, we are in an era where consumerism is based on proper knowledge of a market and the products; consumers can no longer be manipulated (McWilliams, 2000).

Consumerism is the based on informing consumers about a product, it is characterized by the economic, social and cultural order of issues and how they affect the PR of a company and its product (McWilliams, 2000). Business ethics is based on making the morally sound judgement that is fair and just at all times, however in an effort of being cost effective most firms end up adapting unethical practices and covering them up using corporate responsibility. The following are some of the examples:

4. Nike Shoe Company- in an effort to decrease production and labour cost, the company outsourced labour in Thai, later the plant was relocated there, however while the company was campaigning against deforestation and sponsoring projects on the same. Its labourers went on strike due to low salaries, poor working conditions and sexual harassment (Frisch, 2008).

5. De Beers- is a diamond selling cartel based in America, before it was exposed for being involved in the blood diamonds saga was willing to buy and sell diamonds acquired from slavery and war. Yet the company is in the forefront of campaigning against global warming practices by businesses.

6. Currently the McDonald Inc. issue- the company is busy campaigning against poor employee treatment while the its menu is made up of foods that are likely to cause its consumers lifestyle diseases like obesity and high blood pressure (Love, 2000).

At an individual level, deceitful corporate responsibility has made consumers to be more cautious and become more informed about the products they purchase, this is more of a protective mechanism. At a corporate and societal level, it has led to lack of trust and responsibility to the community. This means business is no longer based on mutual goals and objectives, but it is based on personal benefit just like bribery.

Corporate responsibility in the contemporary society is based on trying to convert a negative PR to a positive PR, not on the basis of giving back to the same society that the business depends on. However due to the ease of getting information and change in the dimension of the consumerism makes their efforts to be fruitless.

Recommendation: Instead of companies getting involved in immoral practices while covering up with corporate and social responsibility actions. They should simply practice business ethics at all times, because in an effort of being cost effective, in the long run they lose much more and the damage is irreplaceable. A good example is the Nike Shoe Company, it has never returned to its previous glory after the scandal it was involved in.

Even though bribery is unethical and exposes the consumer to harm through the production and sale of illegally manufactured goods, there is a down side to it. As earlier stated, ethics are a product of culture and beliefs, this means change in culture and belief leads to change in business ethics, so most of the times business ethics is all about doing what is currently considered being right (Hunt, 2005). This is a challenge to companies especially when they are structured in a non-flexible way.

Corporate and social responsibility has become something that most firms use to hide their malpractices; this is on the rise. A company will get sponsor ‘Going Green’ projects to take the public attention away from the poor working conditions and labour exploitation that the company is involved in (Donaldson, 1999). However currently, we are in an era where consumerism is based on proper knowledge of a market and the products; consumers can no longer be manipulated (McWilliams, 2000).

With an eye on the environment and social issues, many businesses are no longer solely focused on turning a profit. A top priority for many organizations today is corporate social responsibility, which focuses on how businesses deal with their environmental, social and economic impacts.

Practicing social responsibility also pays off financially for many companies. A study from the University of Iowa found that businesses that make greater investments in corporate social responsibility initiatives see less risk in their stock prices during economic downturns. In essence, it pays off to do the basic right thing. If more businesses would balance social responsibility while running their company honorably, services would improve, profits would increase and quality products would be purchased.

References

Bellah, N. R. Durkheim, E. (1973). Emile Durkheim on Morality and Society, Oxford University Press, New York

Crew, A. (2010). Bribes and Bribery in Business, Orthodox Print Press, New York

Donaldson, T. Dunfee, W. T. (1999). Ties That Bind: A Social Contracts Approach to Business Ethics, Colombia Publishers

Hunt, A. J. Laszlo, S. (2005). Bribery: Who Pays, who refuses, what are the payoffs? Random House Publishers

Paine, L. S. Bruner, M. C. (2005). Bribery in Business: A Legal Perspective, Cambridge University Press, London

Frisch, A. (2008). The Story of Nike, University of Oklahoma, Oklahoma

Love, F. J. (2008). McDonald’s: Behind the Arches, Oxford University Press, New York

McWilliams, A. Siegel, D. (2000). Corporate social responsibility: A theory of the firm perspective". Academy of Management Review