Final Reflection Paper on Business Ethics: Ethical Dimensions in the Conduct of Business
The chosen article for the Business Ethics theme is “Ethical Dimensions in the Conduct of Business: Business Ethics, Corporate Social Responsibility and the Law. The "Ethics in Business" as a Sense of Business Ethics” by Velentzas and Broni. The main concept of this paper is that there are three purposes of using business ethics. The first purpose is the need to avoid illegal practices in any work-related activities. The second purpose of business ethics, according to Velentzas and Broni (2010), is the need to avoid actions that may result in civil law suits against the company. Finally, authors state that companies should use business ethics norms in order to avoid actions that are bad for their image.
To my mind, these three purposes of using business ethics fully characterize all existing practices of modern businesses. This seems to be true because modern companies are especially concerned about the practices that may cause the loss of revenues or worsen their reputation among stakeholders. I think that evidence that were presented in the article fully justify the approach of using business ethics preferred by most of the companies.
First of all, authors divide the field of business ethics in order to describe the companies’ behavior in different aspects of their businesses. Among those fields, the following should be mentioned: general business ethics, ethics of finance, ethics of human resource management, ethics of sales and marketing, ethics of production, ethics of intellectual property, knowledge and skills, ethics and technology, international business ethics, ethics of economic systems, and law. For example, authors prove that satisfying shareholders’ needs is necessary for every company because it provides company’s managers with the necessary amount of money for further development. Thus, every company needs to strive to earn enough money in order to reinvest them and continue business operations. On the other hand, solely focusing on the financial results may create huge problems with the company’s stakeholders (i.e. employees, customers, society, etc.), which can result in further deterioration of the business. This view is supported by the corporate social responsibility concept, which is based on using business ethics. Thus, I agree with the authors that most of the companies follow the ethical principles in their business actions in order to create a positive image among their stakeholders and business partners, which will help strengthen their business environment.
Further, I agree with the fact that using business ethics will not only create a positive image for the company, but also will help avoid illegal practices, which may result in fines or loss of licensure. In this case, ethical behavior is required for businesses or corporations, especially those that are multinational or have subsidiaries in different countries with different laws and moral views. Thus, a multinational company may face an issue related to the conflict between the cultural or legal standards in different countries. For example, in some countries, paying bribes is a normal practice, and businesses that do not accept this may close. However, the laws of many developed countries (such as the United States) forbid any types of bribes regardless of whether it is a domestic or international market. In this case, international corporations (such as Coca-Cola) should solve the ethical dilemma: pay bribes and continue developing the business in a certain country, or refuse to violate the ethical norms of its corporate culture and face huge problems while doing business in a certain location or country.
However, it is evident, that some ethical behaviors may not be described in the law, for example, the philanthropic support or donations to local communities. In this case, the company does not receive direct profit, but improves its image among its customers, employees, and other stakeholders. For instance, such activities are important for companies producing products that potentially may harm customers. Among those companies, the following may be highlighted: tobacco and alcohol companies, automobile manufactures, etc.
However, Velentzas and Broni (2010) state that moral behavior is too costly for companies. They base this statement on the fact that in order to behave ethically, companies should pay special attention to the environmental impact of their manufacturing and daily business processes, ensure product safety, provide truthful advertising and scrupulous marketing, and provide appropriate humane working conditions. To my mind, these costs will result in even more benefits for companies the behavior of which is ethical, unlike for those, which do not follow the moral principles. As for me, the first ones will earn more money, if, for instance, they create better working conditions for their employees. On the one hand, the company needs to pay more money to construct better workplaces or pay more financial rewards for its employees. On the other hand, it creates better conditions for its workforce, which will increase its efficiency and, thereby, improve the overall financial performance of the company.
Consequently, I mostly agree with Velentzas and Broni (2010) because they have fully described and proved the key reasons of behaving ethically for companies. Further, I admit that using the business ethics principles is a necessary element for good financial performance of every company, since it helps avoid any fees or other financial losses caused by unethical behavior and improve its overall image, which results in an increase in the loyalty of its customers, improved efficiency of its employees work and other business partnerships.
Chapter 8 deals with ethical issues in marketing processes. The main concept of this chapter is that the marketing function of every company is closely connected with the need of behaving ethically while doing business. To my mind, this is the most important concept of the lectures because the marketing function is the basis of doing business. I think this is true because in the field of marketing, the following issues should be considered: the condition and type of product that is produced, the acceptable and fair price, the ways of product promotion, and, finally, the market placement of the product. It is evident that while addressing these issues, every company faces various ethical barriers. Thus, I decided to pay attention to the ethical issues in marketing in order to become fully aware of all possible ways of doing ethical marketing.
Having studied this chapter, I am now able to apply an ethical framework to marketing issues due to the various practical issues described in the chapter. First of all, these issues were dedicated to marketing in pharmaceutical companies. For example, I have understood how essential truthful information is, given that those companies are responsible for the lives of their customers.
I have also realized that there are three key concerns for ethical analysis of marketing issues. The first concern is the rights-based ethical tradition. According to it, it is necessary to define the degree to which the participants of the ethical issue are considered as completely autonomous agents. The second concern is the utilitarian tradition. According to this concern, it is necessary to realize to what extent the transaction provides actual benefits compared to solely apparent ones. The final concern is about every other ethical tradition. According to it, the other values that relate to the transaction should be found.
I have also learned about the diverse standards and approaches to product safety. For example, the caveat emptor approach is focusing on letting the buyer be aware. According to this approach, a simple model of contractual exchange is used for marketing and relations between buyers and sellers. I discovered different ethical issues in advertising. Thus, in order to provide information for market exchanges and contribute the information necessary for autonomous individuals to make informed choices, the information in advertising should be true and accurate. However, some companies may manipulate the customers by using unfair or incomplete information in their advertising messages. Moreover, advertising that appeal to fear, anxiety, or other non-rational motivations is also ethically improper. The next approach refers to implying the warranty of merchantability. This should help to ensure that the product is reasonably suitable for its purpose of purchase. The next concept is related to negligence. According to it, a second avenue should be provided for consumers to hold producers responsible for their products. Thus, negligence is a central component of tort law, which explains many of the ethical and legal issues and specifies what constitutes negligence in their design, production, and sale. Further, the concept of strict liability makes producers provide equivalent compensation to consumers for any harm caused by their products.
Further, the chapter explained rationales related to ethical debates on product liability. Thus, the first rationale is based on holding businesses strictly liable for any harm their products cause. Using this rationale is a strong incentive to produce safer goods and develop better services. The second rationale is based on holding businesses accountable for the costs of injuries.
When applying this knowledge to my personal working experience, I was able to recognize the ethical issues and distinguish ethical target marketing from the unethical one. Moreover, this chapter has helped me evaluate both ethical and unethical means by which people are influenced through advertising and understand how ethical marketing can contribute toward a more sustainable business model of the company. Consequently, I have reinforced my opinion that behaving ethically while fulfilling the marketing function is vital to every company, and will bring more benefits, both in terms of image and finance, than losses.
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