Essay On Ethics

Ethics by definition is a set of rules or standards that govern the conduct of a person or members of a group. Ethics involves learning what is right or wrong, and doing the right thing. The controversy: doing the right thing based on a moral principle or doing the right thing based on the situation. Doing the right thing does not always mean the same thing to different people, ultimately; it is up to the individual.

Business ethics is knowing what is right or wrong in the workplace and doing what is right. Doing what is right, is not just the obvious "be good," "don't lie," etc., in times of stress, these values are overlooked. With all the scandals showing up in the press, business ethics has come under scrutiny. Did these companies have a business code of ethics? If they did, were they ignored out of greed or out of confusion? Without a strong code of ethics, managers/leaders have no strong moral compass to guide them in times of crisis and confusion.

Business ethics can be broken down into to broad areas:

1. Managerial mischief, example Enron, includes "illegal, unethical, or questionable practices of individual managers or organizations, as well as the causes of such behaviors and remedies to eradicate them." Here in lies the problem, more often than not, business ethics is more a matter of dealing with dilemmas that have no clear indication or what is right or wrong.

2. Moral mazes of management consist of the day-to-day problems that managers have to deal with from conflicts of interest to misuse of company resources.

From the time of Aristotle, ethics has been the domain of philosophers, academics and social critics. There is has not been a practical resource designed specifically for leaders and managers. Most information on business ethics contains sensationalistic stories of business "gone bad" but not the daily concerns faced by managers and leaders. Or the information deals with simplistic ethical questions such as "Should Harry steal from the company?" Real-world cases are often more complex than that.

With the birth of the social responsibility movement in the 1960's, expectations of businesses were raised. Businesses expected to use their financial and social influence to address social problems such as poverty, environmental protection, equal rights and public health. People asserted that because businesses were making a profit from using our country's resources, these businesses owed it to our country to work to improve society. Business ethics has become a management discipline like public relations and human resources. Organizations realized they needed more guidance to ensure that their dealings supported the common good and did not harm others.

Most business schools provide some form of training in business ethics. Proponents of corporate social responsibility argue that the typical management education produces leaders who have a limited capacity to think broadly about the impact of their decisions on stockholders, employees, suppliers and the wider community. Competitive pressures on managers and ranking pressures on business schools have combined to encourage business educators and corporate leaders to pay even more attention to profit margins and maximization.

Ethics is an integral part of management and leadership. An oft-cited case, Johnson & Johnson's Tylenol tampering, is a perfect example of business ethics cone right. "The Credo", Johnson & Johnson's code of ethics, was developed early in Johnson & Johnson's history. These values became the way Johnson & Johnson would always operate and became a part of everyday decision making. During the Tylenol crisis, instead of downplaying or hiding the incident, Johnson & Johnson openly admitted the problem and promised replacement bottles for every bottled returned by a customer. This and a recall of all Tylenol products cost the company $100 million and a 17% drop in stock value.

Because of "The Credo," Johnson & Johnson willingness to tell the public the truth, no matter what the outcome, the crisis may have cost them money at that time, but after a public Johnson & Johnson stock share value was regained. Within six months, they had recaptured 95% of its market share.

"Unfortunately, the courses that might teach students to be mindful of consequences and consider the perspectives of multiple stakeholders are hardly considered mainstream in management education today. Courses on ethics, corporate responsibility, business/public policy, stakeholder relationships, and other "soft" subjects are typically given short shrift in favor of applied analytical tools and techniques, conceptual models and measures of profitability." To avoid a repeat of the corporate scandals that have plagued us for the last five years, it is important to study how business schools are teaching tomorrow's leaders. Focus must be on the integrity of the individual, the company and society. Managers and leaders need to have alternatives to a profit-based style of management.

The blame cannot be placed wholly on the faculty of the businesses schools. Some students disregard the importance of classes on corporate social responsibility. Often, once enrolled in a business program, students seem to lose the idealism they may have brought to the course. Even if they manage to graduate with their idealism in place, many students enter the business world thinking they cannot change the corporate attitude.

Businesses themselves need to lead a charge for a rebirth of ethical business practices. There are companies out there, Johnson & Johnson, for example, that run their company by a code of ethics. Other businesses need to increase incentives for doing the right thing and increase penalties for wrong doing, across the board. Internally, they need to make an ongoing commitment to strengthening, communicating, enforcing and rewarding corporate and personal values.

A Star Employee's Indiscretions

Mark had been one of the finalists to replace the retiring CEO of a financial institution with 1,000 offices in 12 states and more than 4,500 employees. He was a strong willed and determined young man who had worked his way up in the financial and lending areas of the bank. The position had been given to Carl, a CEO from a small, local financial institution.

Carl believed that Mark's biggest problem was his total lack of tact and control of his temper with fellow employees at all levels. In addition, there were three, possibly four ladies that had sexual relations with Mark. The affairs were carried out during work hours, at bank functions and while