Businesses have power through their ability to spend vast amounts of
money. They have the ability to enhance or change situations that the common
individual does not. As organisations affect many people, they have obligations
to their employees, consumers, community and the world. They have a
responsibility to conduct business in a way that is not harmful and which
positively benefits as many people as possible and themselves. Although this
sounds simple, it is easier said than done! as there will always be a conflict
of interest between various groups of people. Any decisions made by businesses
need to be made with an informed awareness of the specific situation and then
act according to some sort of system of principals which is Business Ethics.
What is Business Ethics?
Business ethics is exactly the same as normal ethics, and that is
knowing what is right or wrong, and learning what is right and what is wrong in
a business environment. Then doing the right thing, but the right thing is not
as straightforward as explained in many business ethics books. Most ethical
dilemmas in the workplace are not simply a matter of Should she steal from him?
or Should he lie to his boss? Businesses cannot function without ethics, why?
Society dictates a set of rules and conformities and seeing as all businesses
strive after common goals it means that these goals can only be achieved on the
basis of standards, values and morals in society. It can be assumed that
business life has to be called 'moral' as well. As in society, standards and
values are spontaneously formed once people come together and start 'behaving',
likewise, business life becomes exactly the same and that's when morals come
into effect, and when businesses decide on implicit or explicit ways to achieve
certain goals and then are agreed on. Businesses in general are working on the
basis of an ethics that settles different interests. The standards and values
within companies can be characterised as mutual respect. In this respect it is
in everyone's interest, and is considering people as an end in themselves, not
as a means, reciprocity and fairness. This ethics is passed down and filtered
to a group of stakeholders who have an interest in the company. These
parties usually are: personnel, customers, suppliers, subcontractors,
shareholders, society and those who speak on behalf of the environment and
future generations Many ethicists say there's always a right thing to do based
on moral principle, and others believe the right thing to do depends on the
situation, ultimately it's up to the individual on what they do and on what
they believe to be the right thing is. Sometimes the right thing is not
necessarily the best thing to do. Many philosophers consider ethics to be the
science of conduct. Twin Cities consultants Doug Wallace and John Pekel (of the
Twin Cities-based Fulcrum Group) explain that ethics includes the fundamental
ground rules by which we live our lives. Many professionals in ethics say that
new ethical beliefs are state of the art legal matters, and that what becomes
an ethical issue of today is then later made into a law. Values that say how we
should behave are said to be moral values, values such as respect, honesty,
fairness, responsibility, etc. Statements about how these values should be
implemented are sometimes called moral or ethical principles. The concept of business
ethics has been seen to mean various things to different people, but usually
it's knowing what is right or wrong in the workplace and doing what's right in
regard to effects of products, services and relationships with stakeholders.
Wallace and Pekel say that attention to business ethics is critical during
times of fundamental change, times much like those faced now by businesses,
both non-profit and for-profit. In times of fundamental change, values that
were previously taken for granted are now strongly questioned. Many of these
values are no longer followed.
Therefore,
there are no clear morals to guide today's leaders through difficult problems
about what is right or wrong, just vague perceptions of what should and has
already been done. A focal point on ethics in the workplace shows and alerts
leaders and staff on how they should act. An attention to
ethics in the workplaces helps ensure that when leaders and managers are
struggling in times of crises and confusion, they retain a strong moral focus.
However, attention to business ethics provides numerous other benefits, as
well. Note that many people believe that business ethics, with its
continuing focus on doing the right thing, only asserts the obvious be good,
don't lie,, and so these people don't take business ethics seriously. For many
people, these principles can go right out the door during times of stress.
Business ethics can be a strong preventative medicine.
10 Benefits of Business Ethics
These
benefits were attained from http//: www.businessethics.com/index/benefits.htm
Many people are used to reading or hearing of the moral benefits of attention
to business ethics. However, there are other types of benefits, as well. The
following list describes various types of benefits from managing ethics in the
workplace.
Attention
to business ethics has substantially improved society. A matter of decades ago,
children in our country worked 16-hour days. Workers' limbs were torn off and
disabled workers were condemned to poverty and often to starvation. Trusts
controlled some markets to the extent that prices were fixed and small
businesses choked out. Price fixing crippled normal market forces. Employees
were terminated based on personalities. Influence was applied through
intimidation and harassment. Then society reacted and demanded that businesses
place high value on fairness and equal rights. Anti-trust laws were instituted.
Government agencies were established. Unions were organised. Laws and
regulations were established.
Ethics
programs help maintain a moral course in turbulent times. As noted earlier in
this document, Wallace and Pekel explain that attention to business ethics is
critical during times of fundamental change -- times much like those faced now
by businesses, both non-profit and for-profit. During times of change, there is
often no clear moral compass to guide leaders through complex conflicts about
what is right or wrong. Continuing attention to ethics in the workplace
sensitises leaders and staff to how they want to act.
Ethics
programs cultivate strong teamwork and productivity. Ethics programs align
employee behaviours with those top priority ethical values preferred by leaders
of the organisation. Usually, an organisation finds surprising disparity
between its preferred values and the values actually reflected by behaviours in
the workplace. Ongoing attention and dialogue regarding values in the workplace
builds openness, integrity and community -- critical ingredients of strong
teams in the workplace. Employees feel strong alignment between their values
and those of the organisation. They react with strong motivation and
performance.
Ethics
programs support employee growth and meaning. Attention to ethics in the
workplace helps employees face reality, both good and bad, in the organisation
and themselves. Employees feel full confidence they can admit and deal with
whatever comes their way. Bennett, in his article Unethical Behaviour, Stress
Appear Linked (Wall Street Journal, April 11, 1991, p. B1), explained that a
consulting company tested a range of executives and managers. Their most
striking finding: the more emotionally healthy executives, as measured on a
battery of tests, the more likely they were to score high on ethics tests.
Ethics
programs are an insurance policy -- they help ensure that policies are legal.
There are an increasing number of lawsuits in regard to personnel matters and
to effects of an organisation's services or products on stakeholders. As
mentioned earlier in this document, ethical principles are often
state-of-the-art legal matters. These principles are often applied to current,
major ethical issues to become legislation. Attention to ethics ensures highly
ethical policies and procedures in the workplace. It's far better to incur the
cost of mechanisms to ensure ethical practices now than to incur costs of
litigation later. A major intent of well-designed personnel policies is to
ensure ethical treatment of employees, e.g., in matters of hiring, evaluating,
disciplining, firing, etc. Drake and Drake (California Management Review, V16,
pp. 107-123) note that an employer can be subject to suit for breach of
contract for failure to comply with any promise it made, so the gap between
stated corporate culture and actual practice has significant legal, as well as
ethical implications.
Ethics
programs help avoid criminal acts of omission and can lower fines. Ethics
programs tend to detect ethical issues and violations early on so they can be
reported or addressed. In some cases, when an organisation is aware of an
actual or potential violation and does not report it to the appropriate
authorities, this can be considered a criminal act, e.g., in business dealings
with certain government agencies, such as the defence Department. The recent
Federal Sentencing Guidelines specify major penalties for various types of
major ethics violations. However, the guidelines potentially lower fines if an
organisation has clearly made an effort to operate ethically.
Ethics
programs help manage values associated with quality management, strategic
planning and diversity management -- this benefit needs far more attention.
Ethics programs identify preferred values and ensuring organisational
behaviours are aligned with those values. This effort includes recording the
values, developing policies and procedures to align behaviours with preferred
values, and then training all personnel about the policies and procedures. This
overall effort is very useful for several other programs in the workplace that
require behaviours to be aligned with values, including quality management,
strategic planning and diversity management. Total Quality Management includes
high priority on certain operating values, e.g., trust among stakeholders,
performance, reliability, measurement, and feedback. Eastman and Polaroid use
ethics tools in their quality programs to ensure integrity in their
relationships with stakeholders. Ethics management techniques are highly useful
for managing strategic values, e.g., expand marketshare, reduce costs, etc.
McDonnell Douglas integrates their ethics programs into their strategic
planning process. Ethics management programs are also useful in managing
diversity. Diversity is much more than the colour of people's skin -- it's
acknowledging different values and perspectives. Diversity programs require
recognising and applying diverse values and perspectives -- these activities
are the basis of a sound ethics management program.
Ethics
programs promote a strong public image. Attention to ethics is also strong
public relations -- admittedly, managing ethics should not be done primarily
for reasons of public relations. But, frankly, the fact that an organisation
regularly gives attention to its ethics can portray a strong positive to the
public. People see those organisations as valuing people more than profit, as
striving to operate with the utmost of integrity and honour. Aligning behaviour
with values is critical to effective marketing and public relations programs.
Consider how Johnson and Johnson handled the Tylenol crisis versus how Exxon
handled the oil spill in Alaska. Bob Dunn, President and CEO of San
Francisco-based Business for Social Responsibility puts it best: Ethical
values, consistently applied, are the cornerstones in building a commercially
successful and socially responsible business.
Overall
benefits of ethics programs: Donaldson and Davis, in Business Ethics? Yes, But
what can it Do for the Bottom Line? (Management Decision, V28, N6, 1990)
explain that managing ethical values in the workplace legitimizes managerial
actions, strengthens the coherence and balance of the organisation's culture,
improves trust in relationships between individuals and groups, supports
greater consistency in standards and qualities of products, and cultivates
greater sensitivity to the impact of the enterprise's values and messages.
Last
and most formal attention to ethics in the workplace is the right thing to do.
Case
Study on Nestle
All
information for this was ascertained at the nestle web site
http//www.nestle.com.
Nestle's view on Business Ethics
Nestle's view on business ethics is one of great importance. As
you can see from their web site www.nestle.com this is one of their major focal
points. Nestle, like many other businesses have created what they believe to be
a comprehensive ethical policy or codes of ethics, in plain they are lists of
what they believe is ethical behaviour and how they should behave. However, the
existence of a code of ethics may not guarantee that the company will conduct
itself ethically. Ethics codes are often drawn up in response
to scandals and to protect the name of the company, and then this only state
its legal responsibilities and the conduct it expects from its employees,
rather than listing any ethical principals and aspirations that it holds. The
emphasis has often been on the company setting standards for the employees to
meet, so it will not be caught breaking the law, rather than realising that the
company itself needs to be guided in its business conduct. Nestle have
got an ethics policy from legislation to child labour, they have covered every
single topic they believe comes under the word of ethics. Nestle believe that
every single area of their business needs to have an ethics policy in which
they should be able to follow, as they are a global company and their arms
stretch to many different area's. Nestlé Global
Commitment and Responsibilities Since Henri Nestlé develoed the first
milk food for infants in 1867, the Nestlé company has gained vast
experience through its scientific research into the nutritional needs and food
preferences of consumers of all ages. No other food company invests so
much in fundamental and applied research. The company has been a leading food
manufacturer and major purchaser of agricultural raw materials for over 130
years. Food and agriculture are an integral part of the social, cultural,
economic and political context of every community. Since Nestlé
activities in Switzerland, its country of origin, account for less than 2% of
its global turnover, Nestlé learned very early to respect the social,
political and cultural traditions of all countries in which the products are
produced and sold. They also learned to be a highly decentralized people and
products oriented company rather than a systems centred organisation. Today,
Nestlé is the world's largest and most diversified food company, with
nearly 500 factories around the globe, producing healthy, enjoyable food
products for every stage of life. Quality is the cornerstone of the success of
the Nestlé Company. Everyday, millions of people all over the world show
their trust in the company by choosing Nestlé products. This trust comes
from a quality image that has been built up for over a century. Nestlé
carries out its global social responsibility, firstly, by taking a long term
approach to strategic decision making which recognizes the interests of our
consumers, shareholders, business partners, and the world-wide economies in
which we operate. Secondly, our responsibilities and values are reflected by
the commitment of management and employees at all levels, to our Corporate
Business Principles, which define standards of behavior for all companies in
the Nestlé Group, and are intended to complement applicable legislation
and international recommendations. P. Brabeck-Letmathe Chief Executive Officer
Nestlé S.A. Nestlé Corporate Business Principles From
www.nestle.com Nestlé is committed to the following business principles
in all countries. Taking into account local legislation, cultural and religious
practice: Nestlé's business objective and that of management and
employees at all levels, is to manufacture and market the company's products in
such a way as to create value that can be sustained over the long term for
consumers, shareholders, employees, business partners and the large number of
national economies in which Nestlé operates. Nestlé does not
favour short-term profit and at the expense of successful long term business
development, but recognizes the need to generate profit each year in order to
maintain the support of the financial markets, and to finance investments.
Nestlé believes that, as a general rule, legislation is the most
effective safeguard of ethical conduct, although in certain areas, additional
guidance to management and employees in the form of voluntary business
principles is beneficial in order to ensure that the highest standards are met
throughout the organisation. Nestlé is conscious of the fact that the
success of a corporation is a reflection of the professionalism, conduct and ethical
values of its management and employees, therefore recruitment of the right
people, and ongoing training and development are crucial. Nestlé
recognizes that consumers have a legitimate interest in the company behind the
Nestlé brands, and the way in which the Nestlé Company operates.
The Impact of Business Ethics on Nestle
As
you can see nestles whole foundation is based around ethics. As Nestle is a
global company they have to take in many factors when considering their ethical
policy, and the fact that they are a global organization, makes that process
one step harder. Being a global company Nestle is affected by different laws
around the globe. Nestles reputation is paramount to them so by having a strict
code of ethics is to their advantage as consumer awareness is growing with each
and every day. More and more people are becoming concerned and disturbed by
moral issues surrounding companies, if a company does a certain action that
consumers dislike, it can have drastic effects to revenues. Nestle have had first
hand experience of the power of consumers, as not so long ago was involved in
allegations that it was supplying unsafe addictive baby milk supplements to
mothers in the 3rd world. This brought on an outrageous response from consumers
all around the world, as this was seen to be immoral and totally unacceptable
by such a large well-known and respected organisation as Nestle. As these
allegations spread, it was devastating to Nestle as many retail outlets began
to boycott Nestle by removing all Nestle products from the shelves. This
boycott was done for several reasons by different outlets, the reason for this
was because of consumers. If other companies were seen to be siding with
Nestle, then that could conflict with their own ethical policies and consumers
could be deterred by that fact. With the introduction and implementation of a
strict and concise ethical policy, Nestle has seemed to redeem themselves by
ensuring a good upstream communication. Nestle have also reached back into the
good books by promoting their codes of ethics by various media's and making
them readily available to the public. A list of Nestle ethics can be found on
their web site, this list has covered everything from environmental issues to
child labour, by doing this they have appealed to the moral issues facing
everyday people and the emotions of its consumers. As Nestles ethics are so
detailed and cover almost every aspect of moral dilemmas in various societies,
Nestle now have the responsibility to live up to their word, and make sure that
this policy does exactly what it says. The impact that this will have on them
will be great, as it will be a fairly costly process to monitor all of these
conditions globally. This would also have a positive effect in the respects of
its consumers, as in this age the consumer market is more competitive than it
ever was, and Nestle need to be seen as a consumer friendly organisation,
sympathetic, moral and ethical. Consumers would see this as Nestle doing
something beneficial and good for people.
Implications of Business Ethics on Stakeholders
The
implications on stakeholders of Nestle is plain and simple, whatever Nestle do,
so do they. What is meant by this is as follows; any actions that are taken
upon Nestle than the stakeholders are doing these actions also, it can also be
called, guilt by association. Any stakeholders also must abide by the ethics
policies set out by Nestle, as guilt by association also functions the opposite
way. Any actions deemed unethical or any unethical behavior by either party can
result in harm for the other, a classic lose-lose situation, therefore upstream
communication is essential for these ethics policies to be adhered to. The
impact on all stakeholders can be a great strain, as Nestle have a very
thorough and comprehensive ethics policy, to conform to this could take a great
deal of time,
Conclusion
What
is Business Ethics? Plain and simple, ethics is the choice
between right and wrong.
The concept has come to mean various things to various people, but
generally it's coming to know what it right or wrong in the workplace and doing
what's right -- this is in regard to effects of products/services and in
relationships with stakeholders. Wallace and Pekel explain that attention to
business ethics is critical during times of fundamental change -- times much
like those faced now by businesses, both nonprofit or for-profit. In times of
fundamental change, values that were previously taken for granted are now
strongly questioned. Many of these values are no longer followed. Consequently,
there is no clear moral compass to guide leaders through complex dilemmas about
what is right or wrong. Attention to ethics in the workplace sensitizes leaders
and staff to how they should act. Perhaps most important, attention to ethics
in the workplaces helps ensure that when leaders and managers are struggling in
times of crises and confusion, they retain a strong moral compass. However,
attention to business ethics provides numerous other benefits, as well.
Список литературы
Genfan,
H. (1987, November). Formalizing Business Ethics. Training and
Development Journal, pp. 35-37.
Thompson, T. (1991,). Managing Business Ethics.
David Cotton, David Falvey, Simon Kent. Market Leader. 2004.