Business Ethics

Business Ethics

Business ethics is the behavior that a business adheres to in its daily dealings with the world. The ethics of a particular business can be diverse. They apply not only to how the business interacts with the world at large, but also to their one-on-one dealings with a single customer.

Many businesses have gained a bad reputation just by being in business. To some people, businesses are interested in making money, and that is the bottom line. It could be called capitalism in its purest form. Making money is not wrong in itself. It is the manner in which some businesses conduct themselves that brings up the question of ethical behavior.

Good business ethics should be a part of every business. There are many factors to consider. When a company does business with another that is considered unethical, does this make the first company unethical by association? Some people would say yes, the first business has a responsibility and it is now a link in the chain of unethical businesses.

Many global businesses, including most of the major brands that the public use, can be seen not to think too highly of good business ethics. Many major brands have been fined millions for breaking ethical business laws. Money is the major deciding factor.

If a company does not adhere to business ethics and breaks the laws, they usually end up being fined. Many companies have broken anti-trust, ethical and environmental laws and received fines worth millions. The problem is that the amount of money these companies are making outweighs the fines applied. Billion dollar profits blind the companies to their lack of business ethics, and the dollar sign wins.

Words to remember                                                                        Match the synonyms

1. behavior  - поведение                                                    1.behavior     a) on the whole
2. adheres to – придерживаться, оставаться верным     2. be loyal to   b) different
3. daily dealings – ежедневное поведение                      3. diverse        с) adhere to
4. particular – определённый                                           4. at large        d) dealing
5. apply to – применять, относиться к                            5. gain             e) duty
6. diverse – разный                                                           6. conduct       f) believe
7. to interact with – взаимодействовать с                       7. consider      g) win
8. at large – в целом                                                       8.responsibility  h)  behave
9. to gain a reputation – получить репутацию                9. major            i) quantity
10. the bottom line – основа, суть, причина                    10.be worth      j) main
11. in its purest form – в его самом чистом виде            11. amount        k) cost
12. conduct themselves – вести себя                                
13. to consider – считать, рассматривать
14. a link in the chain – звено в цепи
15. responsibility - ответственность
16. to be fined – быть оштрафованным
17. for breaking a law – за нарушение закона
18. the major deciding factor – главный решающий фактор
19. an environmental law – закон об окружающей среде
20. to be worth millions – стоить миллионы
21. amount - количество
22. to outweigh- - превышать
23. profit - прибыль
24. to blind the companies to – делать слепым   25. lack of - недостаток

Answer the questions to the text.

1. What do you understand by business ethics?
2. Why do many businesses have gained a bad reputation?
3. Can making money be ethical?
4. Is it ethical to do business with a company that is considered unethical?
5. Do many global businesses think more of business ethics or making money?
6. Can you give examples of ethical behaviour of any companies?
7. What laws do many companies break?
8. Why do many companies keep breaking ethical laws in spite of being fined?

A business may be a multi-million seller, but does it use good business ethics and do people care? There are popular soft drinks and fast food restaurants that have been fined time and time again for unethical behavior. Business ethics should eliminate exploitation, from the sweat shop children who are making sneakers to the coffee serving staff who are being ripped off in wages. Business ethics can be applied to everything from the trees cut down to make the paper that a business sells to coffee from certain countries.

In the end, it may be up to the public to make sure that a company adheres to correct business ethics. If a company is making large amounts of money, they may not wish to pay too close attention to their ethical behavior. There are many companies that pride themselves in their correct business ethics, but in this competitive world, they are becoming very few and far between.

There is a wide range of problems in business ethics. Those problems, however, usually begin with five main concerns. In business school, students are usually taught a set of concepts that are considered core to corporate responsibility, though following these concepts creates ethical dilemmas. Such ethical dilemmas create the tension in the application of business ethics, due to inherent contradictions. Several types of problems arise from these contradictions stemming from the core corporate responsibilities to include problems with stakeholder equity, profit focus, quantitative emphasis.

Stakeholder equity is a problem in business ethics because managers and executives are often under pressure to place the majority of that equity with shareholders, usually at the expense of other stakeholders in the organization. For example, a corporation might be pressured to pay out millions in dividends to its shareholders in a given year, but to make that payment the corporation may need to downsize the workforce. Such a decision creates an ethical dilemma because one stakeholder is given preference over another without justification. Arguably, the workforce and shareholders contribute equally to the corporation, while both equally have a stake in the organization.

Business ethics is the principle of conduct by which a company operates. This includes how the company owners want to manage the business and how the owners expect the employees to conduct themselves. Actions that result in civil lawsuits, criminal liability, or that simply damage the reputation of a business can all be considered examples of bad business ethics.

Dishonesty is a common example of bad business ethics. For example, if a company makes false claims in its advertising, the company is being dishonest to its customers. Making false advertising claims and failing to replace damaged or defective products or to refund their purchase price are examples of bad business ethics that can give a company a poor reputation and that can lead to civil lawsuits.

A business can also face lawsuits or costly recalls if they intentionally manufacture poor or faulty products. While not all faulty products are created intentionally, a company that knowingly makes and markets products that could hurt a customer is practicing bad business ethics. As a result, several customers may file a class action lawsuit against the company. The company may have to recall the products sold and notify the public of the problem, which can also lead to a poor company image.

Bad business ethics also includes illegal actions. For example, falsification of information regarding financial status can lead to criminal prosecutions of business executives. Investors can lose great sums of money due to such practices. Businesses might also engage in criminal activity by participating in practices designed to prevent other businesses from competing with them. Illegal trade practices and violations of various state and federal regulations can result in civil as well as criminal penalties.

While civil lawsuits and illegal activity can damage the reputation of a business, bad business ethics can also include activities that involve no violation of the law. Poor customer service is not only a bad business practice but might be considered unethical as well. Participation in immoral or illegal acts by business executives or key employees can also harm the reputation of a business and might be considered examples of bad business ethics, especially if behavior occurs in the course of conducting business or the premises of a business.

Companies that consistently practice bad business ethics face several problems. Loss of business relationships and a poor reputation with the public can hurt sales. Lawsuits and settlements can be costly and can also result in lost profits. The final result of bad business ethics may be bankruptcy.