How to behave toward oneself and toward other individuals is a matter of making choices: whether to be friendly or unfriendly; whether to tell the truth or lie; whether to be generous or greedy; whether to study in order to pass an exam or to spend valuable study time watching television and cheat to pass it. These, and all other questions about how people act toward themselves and one another are dealt with in a field of study called ethics. Another name for ethics is morality.
Because both words suggest customary ways of behavior, they are somewhat misleading. It had to do with what should or should not be done. Divide practical wisdom into two parts: moral philosophy and political philosophy. They’re defined together as a “true reasoned state of capacity to act with regard to the things that are good or bad for man” (Drucker, 1996). One statement of the problem is business organizations, as well as members of society in general, are plagued by the fact that there are liars, cheats, and thieves among us.
Liars, cheats, and thieves are not new nor are they likely to disappear. People will do anything and go to whatever extent to get what they want. This is why there’s a lack of ethics. Definition of terms: The word ethics is derived from the Greek ethos, meaning “character,” the pattern of behavior or personality found in an individual or group; moral constitution, moral strength, self discipline and fortitude (Compton’s Interactive Encyclopedia). The other is from the Latin mores, meaning “custom” (Compton’s Interactive Encyclopedia).
Business Ethics refers to what is right or wrong, or good or bad, human behavior. The concept of business ethics is “being able to look at your face in the mirror”(Drucker, 1996). Ethics is a code of conduct and values that is accepted by society as being right and proper. Code of ethics is simply a compilation of the rules that are meant to govern the conduct of members of a particular organization or profession. Moral philosophy and political philosophy is true and reasoned state of capacity to act with regard to the things that are good or bad for man.
In the daily scramble to get ahead, earn a profit, and outwit competitors, some people don’t play by the rules. Sometimes the culprits are respected and ordinarily well-behaved persons even though they are accused of a crime or offense. Unfair and unscrupulous actions hinder the development of harmonious relationships between workers and co-workers, and between workers and supervisors. A person who cannot be trusted to do the right thing, fails to win the respect of others.
It should be recognized, however, that ethical dilemmas are faced by people at all levels within an organization. Various firms have experienced breaches of ethics. The respected business firms suffer damage to their reputation when questions concerning ethical behavior arise. This is one of the reason formal codes of ethics, developed by many business organizations, and trade associations are popular today. Code of ethics is simply a compilation of the rules that are meant to govern the conduct of members of a particular organization or profession.
A recent survey found that 94% of the fortune 500 service and industrial companies have a written code of ethics (American Marketing Association). Companies and trade associations expect their members to abide by such rules as a condition of their engaging in the profession. There are at least two noteworthy limitations to codes of ethics. First, the written rules are sometimes so vague and general they prove to be of little value. Second, codes of ethics are neither a complete nor a completely reliable guide to one’s moral obligations.
It is impossible for the drafters of such codes to anticipate all the moral dilemmas which may be encountered and impossible for them to draft rules to govern all behavior. Nothing wins support from external groups as much as adherence to strong codes of ethics. People in businesses and businesses are expected to conduct their activities in an ethical manner. Ethics is a code of conduct and values that is accepted by society as being right and proper. Employers and employees practice honesty, fairness, and adherence to the law.
However, there is always the possibility of divergence from what is considered to be ethical and what is actually practiced. No one commands more respect and admiration than the worker who adheres to ethical principles and exhibits professional behavior. Specialists in the field of Human Resource Development suggested that human relation is doing to others what they would have you do to them. In either case, rather it’s good or bad you or they should expect nothing less than coworkers or supervisors to behave in an ethical, professional manner.
The public image of business has been slipping since the 1960’s. According to a poll conducted in 1966, 55% of the American people had a “great deal of confidence” in American business executives (Matthews, Washington State University, 1995). In recent years, that percentage has dropped to about 20%. Surveys indicate that confidence in business leaders is low, especially with regard to honesty and ethical standards. Confidence in political leaders and institutions is even lower. One explanation is that personal and corporate ethical standards have fallen.
Cases of insider trading, product content deceptions, bribery, pollution, and other business misconduct were seen as confirmation of the public perception. Due to increased concern about ethical issues by the public, it is more likely that some decline in an image is due to increased concern about ethical issues by the public. The public expects more from businesses now than they did in the past. Ethical problems are inevitable at all levels of a business and this means that it’s simply good sense for companies to take seriously the task of institutionalizing ethics in their organizations.
Accordingly, an important segment of corporate America has begun relying on such tools as: statements of corporate values, codes of conduct, ethics workshops, hotlines, even corporate ethics offices and board level ethics committees. In short, they are setting up corporate ethics programs. Formal ethics programs are relatively new to the world of American business. Although a handful of companies have had them for twenty to thirty years, the majority of ethics programs are no more than a few years old and some have been around for only a few months. Nonetheless, their number is growing as their usefulness becomes evident.
Why Ethics? The view from the top. When one looks at corporations with a strong commitment to ethics, the first thing one notices is that the leaders of these organizations are the strongest advocates of corporate integrity. CEOs and Chairmen of such companies are clear and vocal, forcefully charging everyone in the company to look at not only how profitable their actions is, but how ethical. To the skeptics who think that ethics and business go together as well as oil and water, their message is a little short of heresy. Yet another issue cited is the effect of unethical conduct by the corporation on its employees.