Application of Moral Ethics in the Business Industry FINAL
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Application of Moral Ethics in the Business Industry
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Application of Moral Ethics in the Business Industry
Meghan Ims
RES501 – FUNDAMENTALS OF RESEARCH AND WRITING
Colorado State University – Global Campus
Dr. Keith Pressey
July 16, 2020
Application of Moral Ethics in the Business Industry
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Application of Moral Ethics in the Business Industry
Moral ethics are a necessary standard that encourages mutual benefits within society. The
application of the everyday ethics in the business industry is not as cut and dry as one may think. There are complex relationships and consequences at play that prevent companies from having pure altruistic motivation. This paper analyzes the main tenets of business ethics and the need for
practical guidelines over theory. Ethics and Business
The set of moral ethics that the average consumer and employee holds do not always eas-
ily translate into the business world. Business ethics, especially when compared to moral ethics, is a relatively new sector of philosophy that started with “Corporate Social Responsibility” which was prevalent approach from the early 1900’s to 1970’s (Stark, 1993). Corporate Social Responsibility challenged business to do more than minimum as required by law or the market (Stark, 1993). This perspective confronts the innate self interest of a business’s profit and ability to stay competitive which appears to be a recurring argument. Finding the balance of setting ethi-
cal company practices while maintaining a bottom line is the conundrum that businesses’ face and business ethics grapple with. Moral Ethics The golden rule of treating others as you wish to be treated is a basic moral ethic that most of society has instilled in them. Simple moral tenets become more complicated when ap-
plied to business practices. Moral ethics puts emphasis on a person’s motivation of action being altruistic or doing what is right because it right and not one of self interest or for individual bene-
fit (Stark, 1993). The cultivation of altruism has benefits for society since it encourages a great majority of people to do what it right simple because it is right. A business in order to survive
Application of Moral Ethics in the Business Industry
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has a necessity to act with self interest otherwise they potentially operate beyond their means and
lose the ability to operate. A dominating perspective in business ethics was that a business’s motivation could “be either altruistic or self-interested, but not both” and that being altruistic in order to gain consumer
favor is still a self-interested act (Stark, 1993). Bailey critiques an adjoining theory that competi-
tion is innately immoral because it creates win-lose situations (2014). Both authors explore the limitations to applying everyday moral ethics to business practices. Stark is adamant that busi-
ness ethics are too theoretical and offer little practical guidance for managers in the corporate setting that face being an ethical person while growing profits (1993). It is easy for academics or philosophy research to preach to businesses on how to act and sacrifice profits when the reality has many more consequences. Take this situation into account, a company acts without any self interest which leads to it going out of business and all of its employees are now with out a job. Is that not harmful to the now unemployed people and therefore unmoral? Bailey would argue that moral ethics allows for harm if the outcome had a greater benefit (2014). In the above scenario, if the company’s altruistic actions created a greater benefit, like donations to charity or severance
packages to aid their former employees, then harm done in the process may not be unethical. This showcases the complexity of ethics in business and the need to push the higher level theo-
retical tenets into more real world practical guidelines. Social Responsibility The effects of ethics in business reverberate in all levels of its relationships, including with their consumers, employees, and competitors. Choy points to research that shows con-
sumers believe that there has been a decline in the ethical standards of businesses and that the businesses are motivated solely by self interest (2012). This has potential of negatively impacting
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Application of Moral Ethics in the Business Industry
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a company’s relationships with their consumers if they are viewed as unethical. Bailey analyzes the ethical consequences of competition amongst and within companies (2014). Competition that is fueled by “principled action”, like the betterment of employees or product, becomes ethi-
cal even though it may harm competing companies (Bailey, 2014). Principled action is on par with altruistic actions since both are motivated by unselfish reasons. It is the intent of the action or decision or policy that deems it ethical or not. In order to maintain ethical intention, it is to the
company’s benefit for its leaders to develop clear code of ethics in order to create an ethical rep-
utation (Choy, 2012). There are companies that innately represent social responsibility and ethi-
cal practices. Social enterprises differ from other businesses by maintaining a certain social objective that is the core of their mission statement, dictates how their resources are used, and is used to measure company performance (Chell, e.t. al, 2016). The social objectives of social enterprises give consumers and potential employees the belief these organizations will be ethical but that is not a guarantee that leadership is inherently moral. Chell, et al, found that these organizations did
not always begin with a social objective as their vision but at times developed through action or aspiration (2016). In addition, social enterprises seek additional resources, like stakeholders. and develop more bureaucracy as they grow operations which can diminish their ethical integrity (2016). A social objective is not an assurance for ethical practices without protocols to ensure consistent principled action. Even social enterprises are fundamentally businesses that need to maintain a certain bottom line. This means the same ethical dilemma and rules apply to them, al-
though social enterprise have a head start of building ethical integrity because their mission state-
ments could act as their code of ethics. Conclusion
Application of Moral Ethics in the Business Industry
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The theoretical nature of philosophy and ethics inhibits its application to the business in-
dustry due to the complex situations that companies face. There is a need for ethics theory to be translated into guidelines for organizations to be able to implement. To build ethical integrity companies should develop a code of ethics that ensures that intention of polices and decisions are
made with altruistic, not just self interest, motivations. By building and maintaining ethical in-
tegrity companies can create positive outcomes with competitor, consumers, and employees.
Application of Moral Ethics in the Business Industry
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References
Bailey, A. D. (2014). Reconciling Traditional Morality and the Morality of Competition. Busi-
ness & Society Review (00453609)
, 119
(2), 207–219. https://doi.org/10.1111/basr.12030
Chell, E., Spence, L. J., Perrini F., & Harris J. D. (2016). Social Entrepreneurship and Business Ethics: Does Social Equal Ethical? Journal of Business Ethics
, 133
(4), 619.
Choy, D. (2012). How Consumers Perceive The Ethical Conduct of Businesses And Their Man-
agers. International Management Review
, 8
(1), 44–48
Stark A. (1993). What's the matter with business ethics?. Harvard business review
, 71
(3), 38–48.
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