Economics suggests that business and production do not go hand in hand with environmental and societal ethics, due to the two being mutually exclusive events. Why it is so, can form a subject matter of a thesis so will not be a debate matter for this particular article. This article though, discusses the various ethical issues in the business that affect all business workplaces, whether they are local or international. Let us have a look at the ethical issues in business, that are listed below in random order of importance. In business ethics, there is hardly a proper line which can be held on to like the Bible, for ethics often sacrifices profits and the idea is to find the optimal balance between the two, so that the business conscience is clear and the profits are reasonable.
What is Business Ethics?
Business ethics is a behavior that all businesses stick to. Also known as corporate ethics or professional ethics, it incorporates moral guidelines as also the problems a business entity frequently faces. The term ‘business ethics’ became popular in the U.S. in the early 1970s.
The Society for Business Ethics, a global institute that deals with business ethics and application of moral principles was formed in 1980. Businesses started specifying their ethical principles from the late 1980s, perhaps to stay away from scandals in businesses.
In a Free, Unregulated Self-Ethics Model
If business ethics and values are left to the self of business houses and entrepreneurs, society may have many dead weight losses to bear. A few producers can collectively skimp on supply to increase market prices, a few strong buyers may collectively reduce demand till prices fall and a single entity can capture the entire supply chain and refuse its services to the free market and reserve them for the best price. To top it, the labor market can unite and ask for unreasonable increases in wages and the public transport unions can stand up for price hikes. Who decides whether all this is reasonable and hence ethical, or unreasonable and thus unethical? Who says that an earner who earns lower than the minimum wages is entitled to a wage increase even by somewhat unethical measures that require some employer arm-twisting? Who decides that a person who already earns millions in profits is not entitled to reducing worker wages to earn higher margins because it is unethical? See what I mean, ethics changes depending on which side you view them from. What may be absolutely right for you may be a gross injustice for me. So if the market is left to its own individual mechanics, the most important ethical issue of all will be that all those in strong positions will always be the ones manipulating the weaker ones. This is where business ethics comes in as a self-regulatory mechanism on the stronger players in the economy. Let us now move on to certain routine ethical issues that almost every business has to face.
Industry Wide Ethical Issues
The problem with ethical issues is that they are not only routine and frequent, but they are also more widespread, i.e. throughout the whole industry rather than being confined to a particular business.
Bribing powerful officials in order to get bids and tenders accepted and bribing competitor employees to get informational leaks is a serious ethical issue in business. In fact, it is a crime that is legally punishable in most countries today.
Labor related issues like gender discrimination at workplace, employee harassment, minority community participation, working conditions, and child labor are also some general ethical issues.
Business practices like sourcing of materials, quality of inputs in production, compromising on certain aspects like product quality, safety, etc. and deception in packaging, quantity, or size also fall in the purview of business ethics.
Some industries consciously omit the details of the side effects of the usage of their products from the product packaging while some indulge in controversial practices like animal testing and these too are some of the ethical issues in businesses.
Forcing labor to work at below minimum wages, sweatshop work conditions, violation of worker rights, and not complying with health, safety, and environmental standards are some common current ethical issues.
Company Specific Ethical Issues
Showing honesty, integrity, and openness in consumer relationships, addressing warranty and guarantee claims in an open and transparent manner and involving the company in some kind of social welfare causes is an ethical business practice that many are yet to follow.
Whether to accept moral responsibility of on-site mishaps, spills, leaks, and disasters and whether to make product recalls if certain harmful information about them comes to light, are ethical issues that all businesses must be prepared for.
Unethical business practices like dumping good at loss making prices just to earn market shares or to oust a new competitor from business, colluding with competitors to fix higher prices, using high pressure selling tactics, using deceptive advertising, etc. are also some things that need to be looked at.
Some stronger ethical issues are related to practices that are not easily detected, like releasing products that have built-in obsolescence (to generate further demand for future products) and indulging in accounting manipulations to generate secret reserves or to show higher or lower profits as per convenience.
There are many more ethical issues in business and some of them are so common that they even crop up on a daily basis. Making ethical choices is sometimes the hardest thing, especially when the one losing out is you or your business, yet, for the greater good and for the sake of differentiating humanity from animal kind, one has to look at business as well as personal ethics and evaluate them from time to time. For example, if all businesses just looked at current profits and production and ignored the call of the environment, the person losing out on all this is man and his society. Looking at all the ethical issues in business and finding the optimal solutions for them, by taking well-thought out and rational decisions based on all possible parameters will help everyone, the society, the consumer, the environment, and more importantly, even the business.