WHAT IS BUSINESS ETHICS?
In 2012, it was discovered that Yahoo's CEO Scott Thompson, falsified hi education data - which is indeed a personal failure in ethics. Some authors say that in this case ethics should be more important than a college degree (Enderlee, R. 2012).
Business ethics is a form of applied ethics that examines moral rules, theories, and principles in a business context. Generally speaking, business ethics is a normative discipline, whereby particular ethical standards are advocated and applied. It makes specific judgments about what is right or wrong as it teaches what ought to be done and not ought to be done (De George, 1999). Business is also known as ethical management.
Business ethics pushes the practitioner to pause and ask the questions: Is it true? Is it deceitful? Is it fair? Or is it unjust? Does it cause bodily or emotional harm to others and nature? Executives and managers are caught in a balancing act between the ideal and practical, such as the need to produce a reasonable profit for the shareholders and at the same time to maintain integrity by paying correct taxes to the government. (Valor, 2005; Rothman & Scott, 2004; Maximiano, 2003; De George, 1999; Carroll, 1999).
WHAT IS THE ANTHROPOLOGY AND SPIRITUALITY OF BUSINESS ETHICS?
The person who works for or manages business is not just an abstract being or mere intelligent being but a human person with dignity who is subject to socio-political, moral, and economic issues. The social nature of man shows there is interdependence between his personal betterment and the improvement of society.
The human person, a businessman, the supplier, or a consumer, is a microeconomic specie, as he is also a social being that "has been elevated to the supernatural order," emphatically pronounced by Pope John XXIII (Maximiano, 2003).
The fact is that we are not walking bellies alone; we are not only physical. There are other things in the human person besides the material, financial bottom line, scorecard, key result areas, and the belly.
A good business leader is convinced that business should be at the service of the human person, and not human person at service of business, that ethics is above technology and spirit above matter.
WHAT IS THE ROLE OF ETHICS IN THE MANAGEMENT?
John Carr, a U.S. Conference of Catholic Bishops consultant on social teachings, talks about Pope Francis. Carr said: The pope's message on the need for ethics in economic life is not conservative or liberal, but Catholic. It is not socialist or capitalist, but Christian...His heart is with the poor; His feet were planted in the villas miserias [the Argentine phrase for shantytowns or slums] of Latin America.
"The need for ethics in economic life" covers a myriad of both practical and moral problems that arise out of specific functional areas of management.
Ethical management in the workplace. Ethical management, is the foundation of CSR in the workplace, covers those ethical issues arising from the employer-employee relationship, such as the rights and obligations justly owned between them. These issues cover the prevention of discrimination in the workplace and elimination of child labor and biased practices on the bases of age, gender, race, religion, and physical attributes. It also include good working conditions and occupational safety.
Ethical management regarding intellectual property rights. Here we take into account the issues regarding copyright, patent, trademark infringement, business intelligence, employee trading, leaking information or industrial espionage.
Ethical management in sales, advertising, and marketing. Business ethics and social responsibility deal with the issues on price fixing, moral dimension of the antitrust law, bait and switch, viral marketing, and pyramid scandal, among others.
Ethical management in production. Companies are obligated by law and ethics to ensure that products and production processes do not cause harm. The stakeholders involved are the consumers, the general public, and the environment-where problems arise out of new technologies such as mobile phone radiation and genetically modified food. Well-known cases on this area include Ford Pinto, Nike, Bhopal disaster, and the use of asbestos.
Ethical management in finance, accounting, and auditing. The best cases are Enron and Worldcom, where the issues comprise of executive compensation, (criminal) manipulation of the financial markets, bribery, facilitation payments, fraud, and false reporting. Its practical CSR application is corporate governance, accountability, and value-based management.
HOW CAN BUSINESS ETHICS BECOME A PHILOSOPHY OF MANAGEMENT?
Indeed, business ethics can become a philosophy of management-if the practitioner chooses to do so. Whereas ethics is principally personal, CSR is social and corporate. Inasmuch as it is a practical guidepost in one's private and professional life, business ethics is personal. In most cases, however, the ethical behavior of a corporation depends to a large extent on the moral conviction of its CEO and managers, meaning to say that the company CSR in a certain degree depends on the personal ethics of the CEO. In most Philippine cases, people at the top support and push CSR within the organization (Rimando, 2012).
Of course, it is desirable that ethics should also become a corporate affair and the conviction of the rank-and-file employees as well.
WHAT IS THE BIGGEST CHALLENGE?
The biggest challenge is to actually implement and sustain ethical management. Actually, both ethical management and CSR are dedicated to mutual interests existing between business growth and social development. In practice, this means demonstrating how profit motive and corporate gain serve the interests of the various stakeholders: host communities, costumers, employees, competitors, the government, and the environment (Freeman, 1984). Revenues are not meant to fill up the pockets of those who run business; they are meant to be shared to all-in accordance with distributive justice. The big challenge is to actually share resources to all, particularly those in dire needs, and sustain the CSR program.
WHAT DOES IT MEAN TO BE ETHICALLY ACCOUNTABLE IN A GLOBALIZING SOCIETY?
The news of fraud, unethical and deceptive practices by some CEOs and business leaders travel fast around the world. "We have seen significant consequences that ethical failings can have in an organization and industry at large. However, we have also observed the profound positive impact that sound corporate ethics can have on the long-term success and sustainability of a company," says Stefan Linssen.
In the corporate level, there is an increasing recognition of fundamental international rights and corresponding duties, codified into what are referred to as codes of conduct. The usual codes of conduct cover four major business areas: basic human rights, employee practices and policies, consumer protection, and environmental stewardhip (Forbes, 2012).
These codes are usually grounded on solid moral doctrine found in the United Nations Universal Declaration of Human Rights (1948), the European Convention on Human Rights (1950), the United Nations Code of Conduct on Transnational Corporations (1972), the OECD Guidelines for Multinational Enterprises (1976), and the International Labor Office Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy (1977), among others.
WHAT DO AUTHORS/EXPERTS SAY ABOUT BUSINESS ETHICS AND CSR?
Sometimes, business ethics and CSR are either used interchangeable or confused altogether. Business ethics and CSR have evolved, with tons of volumes written about them-particularly in the new millennium. Even immediately after the Second World War, Herbert Simon in his book Administrative behavior (1945), noted that businesses have been affected by the growing interest. According to him, leaders are increasingly becoming involved with "responsibilities toward the community beyond the legal limits imposed on them" (Simon, 1945)-hence CSR is beyond regulatory and legal compliance.
Peter Drucker (1993), in his book The Practice of Management (first published in 1954), was among the first authors to explicitly address the "social responsibilities of business." Whereas Simon (1945) gave far more attention to the ethical dimensions of individual behavior in organization, Drucker concentrated more on CSR.
In his propounded concept of the stakeholder theory, Phillips (2003) directly links organizational ethics, a.k.a. business ethics, with CSR via the stakeholder theory. The center for stakeholder citizenship as a "continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the the local community and society at large."
Meanwhile, for Griffin, the moral reasoning in business ethics may be considered a foundation of doing CSR (2000). Business ethics is related to CSR at the very least as the moral basis of corporate citizenship, that is, business leaders are engaged in CSR practice because they believe they are ethically accountable to society in other words, business ethics is the basis of the practice of CSR.