For the episode from the American television series The Office, see Business Ethics (The Office).Business ethics (also corporate ethics) is a form of applied ethics or professional ethics that examines ethical principles and moral or ethical problems that arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and entire organizations.
Business ethics has both normative and descriptive dimensions. As a corporate practice and a career specialization, the field is primarily normative. Academics attempting to understand business behavior employ descriptive methods. The range and quantity of business ethical issues reflects the interaction of profit-maximizing behavior with non-economic concerns. Interest in business ethics accelerated dramatically during the 1980s and 1990s, both within major corporations and within academia. For example, today most major corporations promote their commitment to non-economic values under headings such as ethics codes and social responsibility charters. Adam Smith said, "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."[1] Governments use laws and regulations to point business behavior in what they perceive to be beneficial directions. Ethics implicitly regulates areas and details of behavior that lie beyond governmental control.[2] The emergence of large corporations with limited relationships and sensitivity to the communities in which they operate accelerated the development of formal ethics regimes.[3]usiness ethics reflects the philosophy of business, one of whose aims is to determine the fundamental purposes of a company. If a company's purpose is to maximize shareholder returns, then sacrificing profits to other concerns is a violation of its fiduciary responsibility. Corporate entities are legally considered as persons in USA and in most nations. The 'corporate persons' are legally entitled to the rights and liabilities due to citizens as persons.
Economist Milton Friedman writes that corporate executives' "responsibility... generally will be to make as much money as possible while conforming to their basic rules of the society, both those embodied in law and those embodied in ethical custom".[22] Friedman also said, "the only entities who can have responsibilities are individuals ... A business cannot have responsibilities. So the question is, do corporate executives, provided they stay within the law, have responsibilities in their business activities other than to make as much money for their stockholders as possible? And my answer to that is, no, they do not."[22][23][24] A multi-country 2011 survey found support for this view among the "informed public" ranging from 30-80%.[25] Duska views Friedman's argument as consequentialist rather than pragmatic, implying that unrestrained corporate freedom would benefit the most in long term.[26][27] Similarly author business consultant Peter Drucker observed, "There is neither a separate ethics of business nor is one needed", implying that standards of personal ethics cover all business situations.[28] However, Peter Drucker in another instance observed that the ultimate responsibility of company directors is not to harm—primum non nocere.[29] Another view of business is that it must exhibit corporate social responsibility (CSR): an umbrella term indicating that an ethical business must act as a responsible citizen of the communities in which it operates even at the cost of profits or other goals.[30][31][32][33][34] In the US and most other nations corporate entities are legally treated as persons in some respects. For example, they can hold title to property, sue and be sued and are subject to taxation, although their free speech rights are limited. This can be interpreted to imply that they have independent ethical responsibilities.[citation needed] Duska argues that stakeholders have the right to expect a business to be ethical; if business has no ethical obligations, other institutions could make the same claim which would be counterproductive to the corporation.[26]
Ethical issues include the rights and duties between a company and its employees, suppliers, customers and neighbors, its fiduciary responsibility to its shareholders. Issues concerning relations between different companies include hostile take-overs and industrial espionage. Related issues include corporate governance;corporate social entrepreneurship; political contributions; legal issues such as the ethical debate over introducing a crime of corporate manslaughter; and the marketing of corporations' ethics policies.[citati
On Tue, Jan 17, 2012 at 1:22 AM, mc100400489 Muhammad Abbas <mc100400489@vu.edu.pk> wrote:Topics covered:
Mr. Aslam is an entrepreneur and commenced his own small scale retail store business to earn his livelihood. With the passage of time his business started growing and he decided to update his business on modern technological processes. He decided to introduce inventory management system and scanned price tags in order to bring more accuracy and transparency in stock holding and accounts maintenance. Mr. Aslam intended to purchase that technological equipment from a world known electronics store. At the end of December, he visited the store, met a sales agent, told him the requirements and asked him to guide accordingly. Being at the end of the month, the sales agent was intrinsically compelled to meet his target sales. Hence; instead of guiding Mr. Aslam for a low cost Core2Duo machine (which can easily fulfill his requirements), sales agent persuaded him to purchase more expensive laptop and presented him its features in such an illusive manner that Aslam decided to purchase an expensive laptop. After some time, back at business place, Aslam regretted to purchase an expensive machine though it was no more beneficial to him than any other low cost computer and he decided not to go for shopping at that electronics store.
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Discussion Question:
By keeping above case in consideration you are required to discuss the ethical perspective of the selling technique adopted by sales agent and the customer while purchasing a machine.
Important Instructions:
1. Your discussion must be based on logical facts.
2. Your comments on the topic should not exceed 500 words.
3. The GDB will remain open for 2 working days/ 48 hours. (Change if more days are allowed)
4. Do not copy or exchange your answer with other students. Two identical / copied comments will be marked Zero (0) and may damage your grade in the course.
5. Obnoxious or ignoble answer should be strictly avoided.
6. Questions / queries related to the content of the GDB, which may be posted by the students on MDB or via e-mail, will not be replied till the due date of GDB is over.
Ø For Detailed Instructions please see the GDB Announcement
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