Business ethics refer to the principles that individuals are expected to follow when dealing with clients in a business environment. Business ethics is a new area of interest to many researchers and a number of them are interested in understanding the corporate social responsibilities of firms in the globalized market. Generally, two theories exist as regards business ethics, one of them being the amorality theory whereby it is argued that business organizations are dishonest and they should never be subjected to ethical values, which means that an enterprise should simply use its resources effectively to maximize profits, as long as the laws of the land are followed.
In this regard, business organizations should never engage in fraud or any other acts that will deprive the client of his or her right to access quality goods and services. The second theory contradicts the first in the sense that it urges business corporations to consider ethics when interacting with members of the public whereby the moral principles should observed. In this paper, the ethical behaviors of business organizations in Finland will be analyzed since they have an influence on the living conditions of the locals. To explain this, theories of morality will be employed since each organization approaches ethics with a certain perspective that is closely related to the famous theories of business ethics.
Description of the Issue
In Finland, ethical codes are mainly related to culture and this has been the problem for many researchers because people rarely differentiate between the two. In fact, the status of ethical standards in the country is very low because people are not concerned. Some researchers in the country underscore the fact that countries, such as Sweden, United Kingdom, and the US are far much ahead since the behavior of business organizations is always monitored closely in these countries.
The main problem is that Finns prefer discussing the problems in business in terms of values as opposed to ethics. Additionally, many people in the country are never concerned with moralistic values and no one has ever wanted to offer a solution on how the global issues could be resolved. However, the issue of ethics is expected to elicit a heated debate in the near future given the rate at which exploration is taking place.
Studies show that a strong correlation between culture and corporate success exist meaning that an organization with an advanced organizational norms and standards is likely to prosper as opposed to the one that simply rely on the laws. Similarly, business corporations that do not adopt cultural management are likely to lose a competitive advantage in the market, which explains the reason companies engage in corporate social activities. In this case, multi-cultural approach provides synergies for business organizations hence strengthening the corporate image. Ethics in the Finnish business environment is a new cultural norm meaning that it plays a critical role for industrial players.
However, he underscores the fact that ethics pose a great challenge to organizations, even though it presents a competitive advantage to those willing to apply it. Scholars employ the terms cultural distance and psychic distance to explain a scenario where culture is related to business and the way it presents difficult situations to the global corporation. If an issue related to power distance emerges whereby the management rely consults other stakeholders arise, cultural distance is said to exist. Additionally if the companies departments rely communicate, a cultural distance might be used to explain the situation. In the global business, this problem is present since regional offices rarely communicate among each other.
Companies are in a position to apply cultural homogeneity in case they are situated in one society with similar cultural features, but this might be a challenge in case it has branches across the borders. Globalization presents a great challenge to organizations meaning that they have to drop cultural approach and employ ethical principles when dealing with global partners. Corporate organizations are forced to introduce new rules in new markets meaning that they have to institute new corporate cultures, which is not possible practically meaning organizations are only left with one option of employing ethical codes since they are applied universally. The main problem is how the Finnish firms are going to cope with the new challenges that globalization present. Studies show that the Finnish government has always responded to global pressures by simply formulating laws to control the operations of businesses, as well as inducing a superior sense of integrity into business activities.
First Global Organization: Nokia Corporation
Nokia is one of the multinational companies operating in Finland and other parts of the world, with specialization in communication and information technology. The organization is headquartered in Espoo and its main products are communication equipments and services, including provision of internet. Additionally, the organization offers games, music, messaging, and media services to the members of the public without any charge. Currently, the firm is believed to employ at least eighty-seven people globally with operations in over one-twenty countries. The company is a public limited company with its shares listed in the country’s stock exchange, as well as the New York stock exchange implying that its profitability is high. Nokia has been able to remain competitive in the global market because of its ability to adopt technology and adoption of ethical codes of various countries.
Apart from subscribing to the moral standards of various countries and professional bodies, it has its own set of ethical codes that are based on social justice and all employees are expected to follow. Social justice means each person should be in a position to realize his or her potential without restriction from the authority. In this case, each person should receive what rightfully belongs to him or her. The organization should be given room to do business without disturbance while it also promises to conduct its activities without interfering with the welfare of others. Finland is one of the countries in the world that respect individual freedoms and rights whereby the government should never interfere with the realization of individual goals. Similarly, the company is concerned with human development and it has never participated in influencing public policies in countries it operates.
In the corporate world, the organization engages in activities aimed at promoting education, healthcare, social security, and the rights of workers. In its payment structure, it ensures that inequality is eliminated through fair distribution of income, which provides an opportunity for each member to achieve his or her interests. If sustainability is to be achieved in development, the environment has to be preserved. Whenever conflicts emerge, it should be the role of the management to resolve them peacefully and no party should be discriminated when handling issues. Based on this belief, the organization ensures that employees are given their rights and the conditions of working have to be better whereby safety is paramount. An employee is not subjected to inhuman conditions that degrade his or her status.
According to the Utilitarian ethics, the organization should aim at implementing policies that will ensure happiness while at the same time reducing suffering. Any decision undertaken in the organization should aim at maximizing utility whereby suffering has to be reduced at all costs. Nokia is one of the companies that have been accused of polluting the environment due to improper disposal of waste products. Disposal of waste products is critical as far as sustainable development is concerned. This means that humanity can only achieve the best if future developmental plans are put into consideration when designing the current strategies. In this case, the organization does not play any role in promoting the interests of the community and its insistence of ethics is skewed because it only applies them in home country and goes against the internationally recognized standards in other countries.
In case the organization wants to boost its competitive advantage and ensure that it remains ahead in the telecommunication industry, it has to consider promoting environmental policies since this would ensure happiness as suggested by Mill. Additionally, the working conditions of all employees should be improved and the cases of discrimination in terms of promotion should be eliminated since this will ensure happiness. Employees working in poor conditions are never efficient and productive because they are concerned with their safety.
Second Global Organization: Nestle Oil
Nestle is a leading Finish Oil Refining company that engages in marketing of oil products. The organization is considered successful due to its diversification strategy, but the strong ethical codes that guide the employees play a role in ensuring that the organization achieves its desired objectives. The company’s ethical codes are supportive of the Kantian ethics, which is one of the deontological ethical theories. Based on the Kantian ethics, people should exercise good will in society whereby the views of each stakeholder are respected and all organizational members should be given equal opportunities to participate in development. In this case, an action should be supported if it obeys the principle of maxim, which means a duty to the moral law. Furthermore, an act should be applicable universally implying that it has to be supported by each person in the organization.
The organization distinguishes between perfect and imperfect duties as regards organizational culture and identity whereby it notes that perfect duties, including telling the truth, are easily made flexible and can be applied in various places across time. Similarly, the best culture and group identities should be applicable across time and places
The study of ethics is critical because of four major reasons, one being the reality that it influences the decisions and practices of organizations. Through ethics, companies, as well as individuals, are likely to generate the best actions that play a role in leading a good life, which is free of suffering. Additionally, ethical codes build a sustainable society that would meet the needs of the future generation. Businesses should be subjected to ethics since they have the potential of harming the individual and the environment.
Production should be done in the best way possible whereby sustainability is given priority. Without ethics, multinational corporations are likely to engage in exploitation of the locals, perpetrate inequality, as well as formulate ineffective policies that aim at dominating the power. In this regard, the actions of companies should be evaluated carefully to ensure that they are consistent with the social justice policy. Competition in the market is rife and if ethical principles are not observed, chances are high that consumers will end up suffering since organizations will simply be concerned with profit making and nothing else.