Business ethics is considered the standard of morality, meaning either doing wrong or right in the business environment. Ethics refers to the code of conduct at the workplace or any business, and it is an essential factor to consider as it dictates the company’s success. Misconduct at the workplace and in the industry has been recorded for centuries now. Many people and leaders have been accused of unethical practices and found guilty of the same. Therefore, every company needs to ensure that ethics are upheld and practiced. Employees and employers should practice a good code of conduct for their reputation and that of the company.
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Responsibility of Top Leadership
It is always a fundamental responsibility of any leader to ensure that they spearhead ethics in a company. Leaders should be role models to ensure that the company’s proper code of conduct is upheld. Leaders should have the company’s interests at heart and ensure that their deeds are aligned with goodwill towards the stakeholders and the company. Leaders should be the people to ensure that the profits made by the company are made through due diligence and the profits are put into good use. Companies serve the interests of the workers, all the stakeholders involved, and the communities around them (Terris, 2013). Implementing ethical conduct ensures that the company’s operations’ profits are handled in the best way possible. Fraud and corruption are vices that lead to significant imbalances between the profits and the welfare of the stakeholders. Companies where the leaders have disregarded this balance have gone into chaos and wholly ruined their reputations.
The temptation of corruption is a massive problem in many multinational companies. The leaders of these companies are in charge of a tremendous amount of money. Handling these massive amounts can be challenging, and thus the responsibility of striking this balance is tested. One incidence that has been discussed in the text is the case of Tyco Corporation. In this case, the Chief Executive Officer, Dennis Kozlowski, and other leaders took advantage of their position and mishandled company funds. The leaders were entrusted with the company’s profits but could not maintain their code of conduct. They used the company funds for their personal needs and drained its profits. These leaders violated their integrity and allowed themselves to act unethically. They put their interest before the company and its stakeholders and misused its funds (Terris, 2013). Theft of this magnitude is a disgrace to the corporate world and shows the lack of responsibility on their side. Despite this example, other leaders have done an excellent job of working ethically to ensure that the companies they work for prosper.
History of Business Ethics
Business ethics has been a topic of discussion since the late 1800s, and many leaders have fallen short of the required code of ethics. The temptation of corruption and fraud is a burden that society has lived with for a long time. Handling a lot of money is a tempting factor, but leaders should know better to uphold business ethics. In American business history, there have been many corruption and fraud cases in numerous corporations. Ethics in the workplace has been a discussion for so many years. Many companies adopted the ethics department that ensured that employees were taught and trained to uphold work ethics and integrity. In as much as integrity would be an innate trait that all human beings should possess, corruption is also a common trait among human beings (Terris, 2013). When the corruption trait outweighs the integrity trait, business ethics is jeopardized. Terris discusses several instances of business ethics breaches in history and the impact the cases had on the companies.
Due to these rampant corruption and fraud cases, the government has instituted more strict policies against fraud and corruption. Harsh sentencing and asset recovery are some of the measures that the government has taken to ensure that the leaders do not misappropriate funds. Companies have also instituted ethics and anti-corruption departments to ensure that the workers are trained to uphold the ethical code of conduct at the workplace. However, despite these measures over the years to try and curb unethical practices in the corporate world, there still exist cases of corruption and fraud. In these modern times, nothing much has changed compared to the late 1800s. On the contrary, the chances of corruption have increased, and methods of theft of funds have become complicated. There are new ways through which leaders of companies are used to steal funds and engage in fraud.
One recent example of a breach of business ethics has been well documented in Mylan Incorporated’s EpiPen pricing scandal. Mylan Inc. took advantage of the market monopoly they had during that time and hiked the price of a much-needed drug. Many people’s lives depended on the drug, and thus Mylan Inc. hiked the prices to over $300 per drug, which was quite outrageous. The act of increasing the price of a much-desired drug to unreasonable rates is unethical. Taking advantage of the business world has remained the same in terms of business ethics or maybe even become worse since new techniques of tapping into funds have been developed. Many companies violate ethics and take part in unethical practices due to the need to make more profit. The world has changed, and people need money each day, and for this reason, many leaders today take advantage of their position to enrich themselves. The greed and unethical practices have led the government to develop stricter sentences. Companies have also opted to invest in ethical practices and ethical training to avoid such incidences.
Evolution of Social Responsibility
Howard Bowen had many predictions about business developments that he puts across to the public. He believes that private companies will be judged according to their contribution to the welfare of the employees in the future. Howard’s assertion is correct when he says, “private business will be judged solely in terms of its demonstrable contribution to the general welfare” (Terris, 2013, p. 41). Employees in the new world do not just look for well-paying jobs, but they look for companies with their welfare and interests at heart. For businesses to survive in today’s market, they need to ensure that they offer incentives to benefit the employees. However, Bowen gets it wrong when he claims that companies will strive to avoid profit maximization in the future. Bowen asserts, “The day when profit maximization was the sole criterion of business success is rapidly fading” (Terris, 2013, p. 41). Businesses are still profit-driven, and more so in the current market, every company strives to make profits. Therefore, this assumption is not correct or valid.
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Conclusively, business ethics is an essential factor in the success of any company. Leaders should ensure that ethics are instilled in the company and every employee follows the correct code of conduct. Leaders have been the greatest victims of unethical practices at the workplace since they fall into the temptation of handling vast volumes of money. With the ability to practice the proper code of conduct, these leaders would avoid these temptations and know what is right to do. The welfare of employees is also another ethical practice that employers should observe. It is essential to ensure that employees are treated with respect and dignity.
Terris, D. (2013). Ethics at work: Creating virtue at an American corporation (pp. 1-48). Brandeis University Press.