Monday, November 8, 2010

Ethics in Business

Ethics in the business world has become a media showcase in the last decade. With Enron, WorldCom, Tyco, Bernie Madoff, Martha Stewart, and Hilary and Bill Clinton having their business dealings questioned and investigated the country has been thrust into an ethics conundrum. What is right and/or wrong? What are the guidelines? Who decides what is right/wrong? The questions posed here are not the same for everyone. Ethics and morals of the individual are based on our experiences, childhood lessons, parents, school, and friends, among others.

In business the ethics, morals, goals, mission, and policies are made up by the owner(s), board of directors, or in the case of the government, Federal and State lawmakers. A company’s goal or mission states what the company plans to do in its life cycle. The ethics of the company are major contributors to the formation of the mission statement. No company states its mission to rip-off, cheat, and swindle its customers out of as much money as it can before getting caught. Although some companies have done this, the mission statement of a company, like Enron stated “Respect, Integrity, Communication and Excellence”, is opposite of the actions shown by the company (, n.d.). Enron’s Code of Ethics stated,

“As officers and Enron Corp, its subsidiaries, and its affiliated companies, we are responsible for conducting the business affairs of the companies in accordance with all applicable laws and in a moral and honest manner...We want to be proud of Enron and to know that it enjoys a reputation for fairness and honesty and that it is respected. Compliance with the law and ethical standards are conditions of employment and violations will result in disciplinary action, which may include addition to responding to the Act, we are adopting this Policy Statement to avoid even the appearance of improper conduct on the part of anyone employed by or associated with the Company...We have all worked hard over the years to establish our reputation for integrity and ethical conduct. We cannot afford to have it damaged” (, 2006).

Enron unfortunately has become a poster child for how a company can get off track from its mission and code of ethics. The victims of these companies continue to feel the effects of these companies and their unethical behavior.

Ethics and Social Responsibility
A company’s social responsibility is directly correlated to its code of ethics. Nike’s code of ethics requires its contractors and partners to abide by the same rules as Nike’s employees. One part that stands out as a socially responsible plan is “The contractor has written environmental, safety, and health policies and standards and implements a system to minimize negative impacts on the environment, reduce work-related injury and illness, and promote the general health of employees” (Pearce II & Robinson, 2011). This shows that Nike has a plan to reduce its environmental footprint and provide a safe workplace for its employees. This also requires Nike’s partners to adapt themselves to the same principles. With this plan Nike has forced its business ethics onto its partners and contractors. In some countries child labor and workers pay are not regulated by the governments of those countries. Nike has required that companies in its business community that wants to be a partner adhere to standards that Nike has deemed necessary to keep Nike’s image in the global marketplace high. Nike has addressed this in its code of ethics plan, “The contractor does not employ any person below the age of 18 to produce footwear. The contractor does not employ any person below the age of 16 to produce apparel, accessories, or equipment. If at the time Nike production begins, the contractor employs people of the legal working age who are at least 15, that employment may continue, but the contractor will not hire any person going forward who is younger than the Nike or legal age limit, whichever is higher” and “The contractor provides each employee at least the minimum wage, or the prevailing industry wage, whichever is higher; provides each employee a clear, written accounting for every pay period; and does not deduct from employee pay for disciplinary infractions” (Pearce II & Robinson, 2011). Companies with global power and consumer face value can use that leverage to impose its will on its partner companies. This poses the question, is that ethical? So the more money and power a company has can create ethical guidelines that other companies must follow or risk not being part of the success of the guiding company.

Ethical Perspective
Over the course of my educational experiences with the University of Phoenix my idea of ethics has been amended to view more than just the actions that affect me. I now assess how my actions will ethically affect others; teammates, subordinates, superiors, clients, and partners. I previously felt something that did not affect me in a positive way was unethical. Now I realize that view was selfish. I now view ethics as a basis for how an individual conducts him/herself in society for the benefit of all peoples. Treating people with respect and dignity is only part of ethics. Moreover being an ethical people does not make you a good person. Character and ethics go hand-in-hand.

1 comment:

Josephson Institute said...

I just discovered your blog and am finding a lot of interesting posts so far. Great work.

We (the non profit Josephson Institute of Ethics) just started our own business blog. I would be honored if you came by and gave any pointers for improvements. Here's one of the latest posts, a guide on establishing an ethical workplace culture -