Business ethics refer to ethical principles that those in business environment must adhere to. Practitioners in the corporate world should follow a certain set of professional standards in the daily conduct in business. This conceptual analysis will delve into business ethics by using three articles. These articles are Francke’s Bringing Ethics Back to Business through Effective Management, Wayne’s A Promise to Be Ethical in an Era of Immorality, and Harrison and Wicks’ New Ways of Measuring Company Performance. The paper will code for both existence and frequency of ethics concept in the three articles. Key words in the analysis are: ethics, school, values, corporate, and code of conduct.
Franckne (2012) argues that the key to entrenching ethics and values in a business is effective management. She cites extensively from Barclays rigging scandal to show that the top management must embody the values that an organization espouses. In an interesting twist of events, Bob Diamond, the CEO of Barclays, quit his position only to be replaced by the bank’s chairman who had resigned a day earlier. This type of succession diminishes public and stakeholders’ confidence in the company. It casts aspersions on the company’s commitment to principles of ethical professionalism. Banking is a financial institution underpinned on trust. If the top management does not adhere to set values, it is unlikely that junior staff will feel compelled to do the same. Franckne (2012) underscores the importance of effective management in entrenching business ethics.
It is difficult for business to uphold professional ethics in the face of high financial rewards and pressure from stakeholders. Pressure creates a confusing state that makes fidelity to corporate ethics untenable. When corporates lack the requisite tools to assess suitability of applicants for certain positions, it becomes hard to get the right person for the job. Additionally, lack of proper checks and balances at the top level leads to complacency. It thus becomes easy for managers to ignore professional standards with no fear of consequences. This lack of accountability has also rocked the media and pharmaceutical industry. The management has repeatedly failed to adhere to strong ethical standards. Junior staffs therefore lack an example to emulate. This has led to decline of trust for big business from the public (Franckne, 2012).
Wayne (2009) propounds on the role of education in entrenching business ethics. Business schools should formulate an oath that binds against greed and corruption. She cites Harvard Business School that has a MBA oath for its graduates. The oath is a promise by the students that they will “act responsibly, ethically, and refrain from advancing their own narrow ambitions” (Wayne, 2009). The pursuit of money should not override the practice of ethical principles. An effective curriculum should entrench values that view business, not just as money making enterprise, but also an integral part of the society. Businesses must go beyond the routine corporate social responsibility activities to engage the society more constructively and ethically.
Columbia Business School also runs a similar model. The school has a code that all students must pledge before graduating. The code is student-driven. Students engage in corporate social responsibilities as soon as they enroll in the school. The underlying philosophy is to make students view the MBA program as a tool to engage with the society and not as a pathway to riches. Unlike in the past where ethics course was taught merely as a subject in class, students now have an opportunity to practice it. This helps in inculcating values to the learners at an early stage. Many corporates engage in corporate social responsibility to enjoy legitimacy from communities within which they operate. Wayne (2009) argues that modern corporates must practice CSR activities as way of demonstrating their values to the community.
Harrison and Wicks (2013) argue that business should reexamine their measurement of performance. Ethical performance measurement should constitute an integral part of business performance appraisal. Financial metrics are incomplete and unreliable as they do not create new value to stakeholders (Harrison and Wicks, 2013). Corporates that perform well have a strong value system. Performance measurement should focus on stakeholders and the values that they seek from a corporate.
The first yardstick, according to Harrison and Wicks (2013) is to assess the utility that stakeholders associate with goods and services. A corporate should endeavor to provide value that supersedes the utility of a good or a service. Similarly, a corporate must ensure that all stakeholders get fair and just treatment as a component of business ethics. Another important aspect of business ethics is association with affiliates that stakeholders deem as upholding desired values. Harrison and Wicks (2013) aver that non-financial aspects of performance measurement encourage open communication and enhance coordination. Corporates should therefore ensure that they incorporate stakeholders’ perception of their business as an evaluation metric.
Franckne (2012) article is an indictment to top managers that fail to embody and entrench strong ethical values in their organizations. The article repeats the word “management” and “code of conduct” many times to emphasis that effective management is the panacea to lack of professional ethics in companies. When the leadership fails to adhere to the code of conduct, junior staffs are unable to differentiate right from wrong. The result is a decline in public trust for the organization. Franckne (2012) cites CMI, a corporate that upholds high professional standards. Members at CMI commit to uphold integrity and professionalism by signing up a code of conduct and ethics. She uses the example at CMI to underscore the necessity of excellence in management. Espousing and practicing acceptable values is not a mere CSR activity. Rather, individuals should take it upon themselves to embody and practice corporate values. Business ethics play an important role in ensuring that a corporate maintains integrity and legitimacy.
Wayne (2009) makes a valid argument that ethical values are better inculcated in schools. When students practice business ethics in school before employment, it becomes natural for them to embody the same values in a corporate set up. One may argue that different corporates embody different values and ethical principles. As truthful as it is, there are those universal values that run across most cultures and corporates. For instance, all corporates espouse and uphold integrity. When such a value is inculcated at school, it becomes part of an individual’s character. An oath ensures fidelity to a promise. The Hippocratic Oath for instance reminds doctors of a commitment and promise to put saving lives above other pursuits. If business students take a similar oath, it will remind them that they are legally and morally bound to observe a set of ethical standards. By repeating the words “school” and “ethical principles” many times, Wayne (2009) underscores the value of schools’ curriculum in inculcating ethical principles to students.
Harrison and Wicks (2013) propose an evaluation yardstick that desists from looking at financial metrics only. Instead, corporates should take into consideration the values that they add to stakeholders. It is difficult, nay impossible, to harmonize all stakeholders’ perception of value. However, stakeholders regard more fondly those corporates that practice fairness and justice. For corporates, justice and fairness should be an integral part of their code of conduct. Additionally, they should only associate with corporates that share similar or almost similar values. Dealing with unjust companies tarnishes stakeholders’ perception of a company. Corporates should therefore incorporate values as metrics for performance appraisal.
Business ethics apply to all aspects of a corporate. Profit-maximization should not override the practice of acceptable code of conduct. Different scholars have different views on corporate ethics. Franckne (2012) argues that embodiment of corporate values is a prerogative of all individuals but the management should provide the drive and impetus. If management is effective, support staff will get a better sense of what is right and wrong. Wayne (2009) feels that the key to inculcating ethical principles is changing schools’ curriculum. When learners practice ethical values at school, it becomes easy to for them to practice the same at work place. Schools should administer oaths so that graduates are morally and legally bound to practice desired values. Harrison and Wicks (2013) argue for incorporation of value metrics in the performance measurement of a corporate. This will lead to a departure from a system that values profits at the expense of professional ethics.
References
Francke, A. (2012). Bringing ethics back to business through effective management. Retrieved from http://www.huffingtonpost.com/ann-francke/barclays-scandal-business-ethics_b_1650531.html
Harrison, J., & Wicks, A. (2013). New ways of measuring company performance. Retrieved from https://ethicalperformance.com/feature/article/7693
Wayne, L. (2009). A promise to be ethical in an era of immorality. Retrieved from http://www.nytimes.com/2009/05/30/business/30oath.html?_r=0
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