Development of Business Ethics

Development of Business Ethics

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Introduction

Business ethics have been in existence for thousands of years in major disciplines such as religion and philosophy and have influenced the development and operations in the field on business organization. Putting that in mind, it is therefore important first, to define the meaning of business ethics, in order to understand how they affect business organization today in a global context. Business ethics have been defined from managerial point of view as, decisions involving what is acceptable or unacceptable when planning and implementing business activities in relation to the global business environment. Business ethics determine how the business organization operates in relation to the needs of internal and external stakeholders, social acceptance and the environmental benefits (Carroll & Buchholtz, 2014). Therefore, the aim of the paper is to examine the development of business ethics by identifying major social issues and, several changes that gave rise to the evolution of business ethics. The paper also attempts to examine how these changes have influenced the present business philosophies and reporting standards and, some of my values and principles related to the evolution of business ethics.

Framework for Understanding the Development of business Ethics

Business ethics can be approached from many dimensions. For instance, they can be approached from descriptive perspective, which refers to what businesses do and, normative perspective, which is what should occur in a business environment. In addition, business ethics have micro and macro/societal dimensions. Therefore, normative-micro dimensions include values and principles for business organization while, normative-macro dimensions include norms and principles applied by business organizations in order to ensure they conform to fair economic systems. On the other hand, descriptive-micro dimensions of business ethics include codes, standards of conduct and compliance systems for business organizations, while descriptive-macro dimensions refer to the public policy and legalization of business ethics. As such, different scholars have defined business ethics by identifying the responsibilities of business organizations, using the aforementioned concepts (Price, 2011).

Historical Evolution of Business Ethics

The overview of the historical evolution of business ethics requires description of major changes in societal, philosophical and cultural issues and how they influence business organizations. From a philosophical perspective, business ethics can be discussed by viewing the argument of Aristotle about the business activities. Aristotle’s contributions to business ethics can be traced in 1960 and he made normative judgments about greed and the unnatural use of individual’s capabilities, for the sake of acquiring wealth. He argued that the business organization needed to ensure that they practiced fair and just treatments in their transactions. As a result, fair and just treatments have been part of the social responsibilities of business organizations since civilization. John Locke classic view of property as a natural right also contributed greatly towards the evolution of business ethics. In addition, Adam Smith, who was often referred as the founder of capitalism, came up with the idea of ‘invisible hands’ and he discussed about self-interest. He explained that business organizations should conduct their activities in a way that benefits leads to the growth of the business, while at the time considering the interests of the societies affected by the operations of the business. For example, he argued that business industries should provide social amenities such as health facilities and clean water to the communities living nearby (Shaw, 2007). Nevertheless, he added that every individual should produce the common good in order to achieve values such as happiness, prosperity and prudence to mankind. Therefore, business organizations should apply these values for the interest of the stakeholders from the macro-normative perspective. Furthermore, John Rawls is another philosopher who came up with the Difference Principle, in his discussion of distributive justice. He explained that business organization should act in a way that provides basic rights to each individual in the society. He also added that there should be fair equality of opportunities in positions and offices, in order to have the greatest benefits for the least advantaged in the society (Halbert & Ingulli, 2011).

Today, for instance, the Difference Principle has been used to measure whether or not certain ethical principles have been justifiable. For example, the principle has been used to discuss why the secondary stakeholders fail to meet the meet their obligations for some special interest groups such as the children and the elderly. In the contemporary times, for example, the Difference Industry Initiative (DII) have established guiding principles on business ethics, which support the organization practice and principle for successful ethical compliance. In addition, the DII supports codes of conduct that encourage companies to perform extensive internal audits and create effective internal reporting plans, in order to ensure there is integrity among the companies’ top offices (Carroll & Buchholtz, 2014).

Conclusion

Ethical misconducts have become a global concern to many businesses today, especially on the department of financial management. However, I think the success of a business can be achieved by practicing transparency and equality. Those being my values, I think they relate to the business ethics especially when resolving corruption in the financial management and ensuring there is no gender discrimination in workplaces. The period of excessive greed by the non-performing CEOs has resulted to fraud in business organizations today. As a result, the interest in business ethics has increased rapidly, and there have been demands by the public for organizations to improve their ethical standards, for example, by conducting an internal audit on the transparency of the management.

References

Carroll, A. & Buchholtz, A. (2014). Business and Society: Ethics, Sustainability, and

Stakeholder Management. Stamford: Cengage Learning.

Halbert, T. & Ingulli, E. (2011). Law and Ethics in the Business Environment. Natorp Boulevard:

Cengage Learning.

Price, A. (2011). Human Resource Management. Hampshire. Cengage Learning.

Shaw, W. (2007). Business Ethics. Belmont: Cengage Learning.