The study of business ethics and its implications
for different stakeholders have seen tremendous growth in the past few decades. There has also been a rise in the use and
development of codes of ethics and announcements for ethical practices by many firms; however companies are still criticized
for their unethical practices at different levels (Papers4you.com, 2006). Business ethics, according to the literature has
been entrenched with the philosophical details of Ethics (Trevino & Nelson, 1999). Ethics has been defined as ‘the
activity of examining the moral standards of a society, and asking how these standards apply to ones life and whether these
standards are reasonable’ (Velasquez, 1998; p. 11).
The literature on business ethics is divided on
its views about the motivation and reason for businesses to have an ethical dimension. Drawing upon Harrison (2001), there are two
major schools of thoughts, firstly those who suggest that firms are profit generating institutions and therefore business
ethics is yet another way to attract customers, secondly those who support corporate conscience and intrinsic motivation for
the adoption of business ethics.
Business ethics has been considered very subjective
in nature and according to Paul (2001) is considered a function of time and culture. It has been established that with the
passage of time business ethics have evolved and also that the cultural values and norms drive business ethics within national
and regional boundaries. One of the major studies regarding the national values has been conducted by Hofstede (1983). According
to this research, which was only based on four indicators i.e. individualism, power distance, uncertainty avoidance and masculinity,
there is a great deal of differences among values across different nations and consequently the business ethics. Globalization
combined with standardization has made businesses financially efficient but at the same time poses questions regarding the
standardized codes of business ethics across national boundaries.
Vinten (1991) has divided the business ethical issues
at different levels i.e. international business, domestic business and professional ethics. At the international level ethical
issues include free-masonry and socialism versus capitalism; at domestic level these include religious dimensions, social
marketing and ethical education; and lastly at the individual level these include bribery, corruption and data protection
(Papers4you.com, 2006).
There are many reasons and criticisms for the failure
of adoption of ethics in the business world. Firstly, the concept is considered to be overly theoretical and it also negates
the basic purpose of any business i.e. to create shareholder’s wealth. Secondly, it has lack of direction and unanimity
across different cultures and academic groups. Lastly, it has many inherent unresolved dichotomies that according to Sternberg
(1994) make it a case of rejected relativism.
References:
Harrison, J. (2001), Ethics for Australian Business,
Prentice-Hall, French’s Forest
Hofstede, G. (1983), The Cultural Relativity of
Organizational Practices and Theories, Journal of International Business Studies, Vol. 14, No. 2, pp.75-89
Papers For You (2006) "S/B/92. What distinguishes
ethical from unethical business activity and how significant are the principles of business ethics in modern business?", Available
from http://www.coursework4you.co.uk/sprtbus21.htm [17/06/2006]
Papers For You (2006) "S/B/49. 'Should businesses
strive to be ethical?' Critically Discuss", Available from http://www.coursework4you.co.uk/sprtbus21.htm [18/06/2006]
Paul, S. (2001), Cultural and Business Ethics, Cross
Cultural Management: An international Journal, Volume 8 No. 1, pp 22-35
Sternberg, E. (1994), Relativism rejected: the possibility
of transnational business ethics, in Hoffman, W.M., Kamm, J.B., Frederick, R.E., Petry, E.S. Jr (Eds), National Conference
on Business Ethics. Proceedings from the 9th Conference on Business Ethics Sponsored by the Centre for Business Ethics at
Bentley College, Quorum Books, New York, NY, pp.143-50
Trevino, L.K., Nelson, K.A. (1999), Managing Business
Ethics: Straight Talk about How to Do It Right, 2nd ed., J. Wiley & Sons, New
York, NY
Velasquez, M.G. (1998), Business Ethics: Concepts
and Cases, 4th ed., Prentice-Hall, Englewood Cliffs, NJ
Vinten, G. (1991), Business Ethics: Busybody or
Corporate Conscience?, Managerial Auditing Journal, Volume 5, Number 2, pp. 123-144
