Business Ethics

When one is dealing with ethics, clear thinking is extremely important, because most ethical issues and problems are controversial, involving emotional questions of right and wrong behavior. A good first step is to have a clear definition of ethics.

What Is Ethics?

Ethics is a set of rules that define right and wrong conduct. These ethical rules tell us when our behavior is acceptable and when it is disapproved and considered to be wrong. Ethics deals with fundamental human relationships. Ethical rules are guides to moral behavior. For example, all societies have ethical rules forbidding lying, stealing, deceiving, and harming others, just as they also have ethical rules that approve of honesty, keeping promises, helping others, and respecting the rights of others. Such basic rules of behavior are thought to be essential for the preservation and continuation of organized life.

For many people, religious beliefs and organizations are a major source of ethical guidance and moral meaning. The family institution also imparts a sense of right and wrong to children as they grow up, as do schools and other similar influences such as television. The totality of these learning experiences creates in each person a concept of ethics, morality, and socially desirable behavior. Ethical rules are present in all societies, all organizations, and all individual persons, although they may vary greatly from one to another. Your ethics may not be the same as your neighbor's; or one particular religion's notion of morality may not be identical to another's; or what is considered ethical in one society may be forbidden in another society. In spite of this diversity, ethics is a universal human trait. All people everywhere need rules to govern their conduct, rules that tell them whether their actions are right or wrong, moral or immoral, approved or disapproved.

What is Business Ethics?

Business ethics is not a special set of ethical rules different from ethics in general and applicable only to business. Business ethics is the application of general ethical rules to business behavior. If a society's ethical rules say that dishonesty is unethical and immoral, then anyone in business who is dishonest with employees, customers, creditors, stockholders, or competitors is acting unethically and immorally. If protecting others from harm is considered to be ethical, then a business firm that recalls a defective and dangerous product is acting in an ethical way.

In the TG&Y episode, both the buyers who took the bribes and the bribers acted unethically because they deceived others, took unfair advantage of them, and then concealed their own selfish actions. They broke the rules of fair play. Likewise, the banks that allowed laundered money to [low through their accounts not only broke the law but protected criminals who harmed society and who brought tragedy into the lives of drug users and addicts. The supervisor who failed to give an employee advance notice of being fired was not breaking the law, but she felt unethical in not telling the whole truth. When business firms or people in business violate the rules that define right and wrong behavior, they are acting unethically, and they also may be acting illegally.

Why Is Business Ethics Important?

Why should business pay attention at all to ethics? What prevents a business firm from piling up as many profits as it can, in any way it can, regardless of ethical rules? In most cases, the general public expects business to exhibit high levels of ethical performance and social responsibility. Parker Brothers spent $ 10 million in recalling the toy that was involved in the death of two children because company executives knew that its customers and the general public would approve its attempts to protect children's lives, even though the likelihood of further accidents was remote.

A second factor encouraging business firms and their employees to act ethically is to prevent harm to society. One of the strongest-ethical principles is stated very simply: "Do no harm." A company that is careless in disposing of toxic chemical by-products that may cause disease and death is breaking this ethical injunction. Many ethical rules operate to protect society against various types of harm, and business is expected to observe these commonsense ethical principles.

A third reason for promoting ethical behavior is to protect business firms from abuse by unethical employees or unethical competitors. Bribery and kickback schemes penalize honest business firms: "One New York apparel vendor says he lost a $4 million account with one of the nation's largest retailers because he, unlike one competitor, didn't bribe the buyer with $ 20,000 cars and pricey stereo systems."

High ethical performance also protects the individuals who work in business. Employees resent invasions of privacy (such as unjustified polygraph tests) or being ordered to do something against their personal convictions (such as "midnight dumping" of toxic wastes) or working under hazardous conditions (such as entering unventilated coal mines). Businesses that treat their employees with dignity and integrity reap many rewards in the form of high morale and improved productivity.

W. С Fredefick, K. Davis, J. E. Post

Exercise 8. Read the explanations to the words and try to guess the translation.

sue (smb for smth) (v) - to make a legal claim, especially for an amount of money, because of some loss or damage that one has suffered

charge (with) (v) - to bring an especially criminal charge against; accuse

kickback - (slang) money paid, usually secretly or dishonestly, to someone in return for doing something

bribe (n) - something especially money, offered or given in bribing

illicit (adj) - (done) against a law or a rule

embezzle (v) - to steal (money that is placed in one's care)

forbid (v) - to refuse to allow; command against, especially officially or with the right to be obeyed

govern (v) - to control and direct the affairs

conceal (v) - to hide; keep from being seen or known

penalize (v) - to punish for breaking a law or rule

hazardous (adj) - (especially of an activity) which contains risks or danger

weed smb/smth out (phr v) - to get rid of (people or things of unacceptable quality) in order to improve smth.

Exercise 9. Complete the sentences using the active vocabulary.

1. She was to be included in the investigation for accepting ....

2. The new tax laws ... people who earn less than & 7,000 a year.

3. The manager ... $ 1,000 from the bank where he worked.

4. He was the robbery.

5. If you do not return our property we will....

6. The country was ... by a small elite of military officers.

7. They were convicted of racketeering and were ordered to repay $ 100 million in ... profits.

8. It was a ... occupation for him.

Exercise 10. Give synonyms to the following words and word combinations.

in cash

vendor

transaction

lay off

enforcement

lawbreakers

to govern their conduct

ethical performance

abuse

remote

pricey

ethical injunction

Exercise 11. Work in groups and discuss the problem of major ethical principles that can be violated by the employees and employers.

Exercise 12. Discuss these questions before reading the article.

1. What to your mind is the role of the large oil companies in price hikes?

2. What do you know about the bribery scandal connected with oil contracts in Kazakhstan?

3. Have you ever heard about Exxon's case? Speak about it.

Exercise 13. Read the article, do the exercises.