TOPIC: BUSINESS ETHICS

Topic: Business Ethics

Business Ethics

Introduction

When discussing the subject of business ethics, points of view range from those who believe that ethics in business is one of the most pressing issues if companies are to ensure creditability and trust to the cynic who is of the view that the term business ethics is an oxymoron, a contradiction in terms, and that the concepts of ethics and business are inherently incompatible. In the early twenty-first century, the general public, fueled by the general media, is quick to seize upon ethical wrongdoing by both small and large companies and is anxious to spotlight ethical violations. In doing so, demands are also increasing for greater levels of accountability in business. The reality, therefore, is that the term ethics —the expectation of appropriate behavior—and business —the current mercantile environment—cannot be separated as one experiences increasing expectation of higher standards of ethical behavior in organizations.

Factors Promoting Ethical Awareness

The factors promoting ethical awareness in both business organizations and business education programs are varied. Societal expectations and tolerance of what constitutes appropriate business conduct have also broadened. For example, companies such as Nike and Reebok have had to fend off criticisms of sweatshop practices in their off-shore contract manufacturing facilities by posting their factory labor audits on the Fair Labor Association (FLA) Web site. Both consumer and shareholder attitudes toward an organization and its ethical profile are increasingly impacting on purchasing decisions and investment strategy. Examples are the consumer boycotts, as historically experienced by Nestlé, and also the growing popularity of ethical investment funds. Undoubtedly, media attention has been instrumental in highlighting ethical misdemeanors. (Bowie, 2004)

Ethical violations, when made public, can have a damning effect on publicly listed companies, as supported by the efficient market hypothesis, which maintains that markets are very efficient in interpreting data and ...