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Case study in business ethics and values
Moral reasoning in business
Moral reasoning in business
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Analysis of Nortel Network Corporation
The ascent and fall of the combination Nortel Networks Corporation was a counter-illustration of Milton Friedman's viewpoint of social stability regarding organizations. Friedman stated the essentialness of expanding benefits without violating the law (Collins, 2011, p. 374). The moral ramifications inborn all hands on deck and administration show a few variables regarding figuring out what is the right activity and bearing an association is to take rather than what the business sector requests. As such, a business' moral disposition may change as it develops and takes care of shopper demand, yet like engineering, it may progress in ways that surpass the breaking points of the law; and all the more critically,
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7). From a more astute viewpoint, a worker (counting CEO) may be set in an authority position (p. 272) where practicing a certain measure of expert or coercive power (p. 272) makes a nature's turf, which prompts redundant patterns as seen at Enron and Fannie Mae. Indeed, as indicated by Collins (2011), advertising and deals have generally high rates of truth bowing and work related deception of items and administrations (p. 8). An alternate part of unscrupulous conduct history may be a consequence of a disappointment to survey representative and officer conduct with ethical culture assessment (p.176). These appraisal instruments, for example, Corporate Ethical Values studies measure administration's conduct inside the association (p. 176). An alternate is the Ethical Culture review, which additionally measures top administration's conduct, additionally workers (pp. 176-7). The Ethical Climate study is broader than the recent two as it measures moral mindfulness, techniques, assets, and administration (p. 177). In conclusion, the Self-Assessment and Improvement Process (SAIP) could distinguish, report, evaluate, and figure out if a business' corporate citizenship is as per organization principles, arrangements, and mission with the expansion of change recommendations (p.
The ethical code of an organization illustrates the importance of being honest, acting with integrity, and showing fairness in decision making (Bethel, 2015). Ultimately, “laws regulating business conduct are passed because some stakeholders believe they cannot be trusted to do what is right” (Ferrell, Fraedrich, & Ferrell, 2015, p. 95). In the last couple of years, culture has become the initiator for compliance, which means from the top down there has to be a commitment to act in a way that represents the company’s core values (Verschoor, 2015).
Many organizations have been destroyed or heavily damaged financially and took a hit in terms of reputation, for example, Enron. The word Ethics is derived from a Greek word called Ethos, meaning “The character or values particular to a specific person, people, culture or movement” (The American Heritage Dictionary, 2007, p. 295). Ethics has always played and will continue to play a huge role within the corporate world. Ethics is one of the important topics that are debated at lengths without reaching a conclusion, since there isn’t a right or wrong answer. It’s basically depends on how each individual perceives a particular situation. Over the past few years we have seen very poor unethical business practices by companies like Enron, which has affected many stakeholders. Poor unethical practices affect the society in many ways; employees lose their job, investors lose their money, and the country’s economy gets affected. This leads to people start losing confidence in the economy and the organizations that are being run by the so-called “educated” top executives that had one goal in their minds, personal gain. When Enron entered the scene in the mid-1980s, it was little more than a stodgy energy distribution system. Ten years later, it was a multi-billion dollar corporation, considered the poster child of the “new economy” for its willingness to use technology and the Internet in managing energy. Fifteen years later, the company is filing for bankruptcy on the heels of a massive financial collapse, likely the largest in corporate America’s history. As this paper is being written, the scope of Enron collapse is still being researched, poked and prodded. It will take years to determine what, exactly; the impact of the demise of this energy giant will be both on the industry and the
It's difficult not to be cynical about how “big business” treats the subject of ethics in today's world. In many corporations, where the only important value is the bottom line, most executives merely give lip service to living and operating their corporations ethically.
As we lose ourselves and our values, worth, and identity as people in the corporate culture, the objectives of monetary profit, status within a company, and machine-like work ethics replace our ethical judgement and our values as people. Perhaps there is nothing we can do about it; after all Skilling and Fastow did not realize what they were doing is immoral and illegal until they were sentenced or even released from their sentence. We are all too absorbed in this capitalistic corporate world we live in. Just like the ancient Chinese philosopher Fu Xuan said, “He who is close to the ink will be stained black,” (Fu, “Prince Shao Fu Xuan”), We have been too used to the immorality and unethical practices of corporate culture that we’re not only numb to the wrongdoings of others within this capitalist society, but we also replace our values as people and our ambitions to do good with objectives of the corporate world. Prebbles posed us the question that after centuries of capitalism’s existence in our society, will our ambitions to do good prevail against our monetary desires and the corporate norm of only profit-driven decisions?
Ethical behavior cannot be successfully shaped and maintained in isolation. Therefore, the internal controls characterized by individual attributes must be usually consistent with organizational structure, organizational culture and societal expectations. These four components are key elements for designing an environment supportive of theses ethical conducts (Cooper, 2012 pg. 164).
The Business Ethics and Leadership Alliance formed in 2008. The goal of BELA is to create a set of standards that group members adopt in order to prevent ethics violations. Consequently, alliance members are required to conform to BELA’s legal, transparency, conflict identification, and accountability standards. The goal is to increase the positive reputation of businesses by meeting ethical and social responsibilities. While some see the alliance as a positive step for organizations, others see another façade to pacify an angry public. BELA’s values and enforcement of compliance remains to be tested in a macro environment of mistrust.
From reading this case, we realize the company did not apply the managing ethics competency in building its goals and structure. Managing ethics competency involves the o...
According to Ferrell (2004), “Organizations create ethical or unethical corporate cultures based on leadership and the commitment to values that stress the importance of stakeholder relationships. Establishing and implementing a strategic approach to improving organizational ethics is based on establishing, communicating, and monitoring ethical values and legal requirements that characterize the firm's history, culture, and operating environment” (p. 129). Ethics programs ensure satisfactory relationships with all stakeholders by aligning with all of their demands and needs, and determine conduct with customers and relationships with regulators, shareholders, suppliers, and employees (Ferrell, 2004).
Gallagher, S. A. 2005. Strategic response to Friedman’s critique of business ethics. Journal of Business Strategy, 26(6), 55-60.
First of all, the individuals who are most responsible for a company’s ethics are found at the top of the company. In traditional company structures, more responsibility and power is allotted to people who are higher up the pyramid. The members with the most power are managers, executives,
The first discussion question posed was, “How does Dr. Friedman characterize discussions on the “social responsibilities of business”? Why (Jennings, 2009, p. 79)? Friedman (1970) characterized the discussions on social responsibilities as one hundred percent unadulterated socialism. Friedman (1970) characterized these discussions in that manner because he felt that a corporate executive should focus solely on making profits and not on social aspects. He mentioned how people who conduct and express themselves in this fashion are positively reinforcing and supporting the actions of individuals that have been weakening the foundational blocks of free society. Friedman (1970) posed a question which was the crux of his 1970 article “The Social Responsibility of Business is to Increase its Profits” where he investigated the true contextual meaning of what responsibilities mean to businesses. Friedman describes how businesses cann...
Being ethically sound is an important part of being an organization, through having policies in place on how things should be and the expectations of employee’s behavior benefits organizations. Suar, D., & Khuntia, R. (2010) expresses personal employee values and unethical practices at work behaviors all influence organizations. As a manager it is important to understand the influence that ethics has on the way on organization runs, and the problems an organization could face when dealing with unethical behavior.
It seems obvious that large corporations have a tendency to ignore the negative effects of their actions in favor of profit. This example, although sensationalized, still says to me that with power comes responsibility. It affirmed my belief that a corporation’s goal cannot be just to provide profit to shareholders, but there must also be an element of social responsibility.
Ethics is the responsibility of each individual person, but starts with the CEO and the Board of Directors, setting the right tone at the top and moves down through the organization, including setting the tone in the middle. A company’s culture and ethic standards start at the top, not from the bottom. Employees will almost always behave in the manner that they think management expects them, and it is foolish for management to pretend otherwise (Scudder). One of the CEO’s most important jobs is to create, foster, and communicate the culture of the organization. Wrongdoings or improper behavior rarely occurs in a void, leaders typically know when someone is compromising the company
Ethics are defined as moral principles that govern a person, or groups, behavior. This simple explanation of ethics becomes extremely complex when adding additional variable such as an organization and its financials. Are organizations that primarily focus on their monetary situation maintaining their moral principles? Finding a correlation between corporate ethics (also referred to as social responsibility) and a firm’s fiscal performance is not easy feat. There are various viewpoints to question of the affect of the general ethical theory of corporate social responsibility. Weighing the possibilities of either a positive impact or trade-off leaves every organization in a puzzled state as they undergo their day-to-day operations.