Article Analysis
In this concept I will be analyzing an article by Josh Spiro titled as How to Write Code of Ethics for Business it was published in 2011. The article talks about how to write a code of ethics but firstly it starts by defining a code of ethics as a pool of principles and various practices that are believed by a business to be good and struggles to conform and live by them. Before writing a code of ethics, priorities have to be set first so as to know what the firm will expect, where to cross the line or not. Then the next step is to get the necessary input that is required from the people who will be affected by the code like employees. The next step is ensuring that the code of ethics is not too vague and then expects pitfalls to be experienced along the way. Know where to turn for help and put someone in charge of running the code.
The article I will be looking into here; Does Morality Matter in Managing Businesses? is written by Victor W. Hwang. It was published on October 23rd 2012. The article starts by looking into the debates of contemporary capitalism on the view of morality and business, whether it matters or not. It debates on whether firms should be morally accountable just like people or should the firm be relieved of moral obligations and be let to operate within legal means. He proposes another way of looking at morality and says that firms should not be thought as a collection of entities but rather be seen as a collection of persons. The author goes further to interview his two friends about the place of morality as far as management is concerned. They talk of the reigniting of the morality in business with relation to the financial crash that happened in 2008, the culture of firms, crossing of cultures among other issues. The article comes out clean with the relationship there is between morality and business.
Stakeholders
The article to be analyzed here is written by Bitesize BBC Teachers. It talks of how businesses have various internal and external stakeholders. It defines stakeholders as anybody who has interests in a given business. They can be groups, individuals or organizations that are somehow affected by the actions of the business. They are; the owners interested in knowing about the profits of the firm; the managers who run the business but they also want to know about their pay; the workers, customers, suppliers, lenders and the community in which the business operates in. internal stakeholders are those that are found within the business while the external ones are the entities outside the business.
Utilitarian approach
This article was written by European Business Ethics Network Ireland during the EBEN Research Conference in 2011 June 8th. It is entitled Does Integrity Matter? The article starts by stating that utilitarianism is a very well-known and widely applied theory in ethics. They define utilitarianism in an organizational context as that decision that produces the greater good for a larger number of people. Net benefits that are got from the choice are often known as good. Total consideration should be given to all shareholders despite the nature of the decision. Various bit about utilitarianism like act utilitarianism, rule utilitarianism among others are looked into and various examples issued to drive the point home.
Whistleblowers
The article to be analyzed here is written by Barbara El of Demand Media. It is titled as Examples of Whistleblowing in Businesses. She starts by defining a whistleblower as an individual who gives information to regulatory agencies or law enforcement agencies on a firm or business that is acting illegally or in unethical practices. So as to protect whistleblowers, the Congress enacted the Whistleblower Protection Act in 1989 so as to protect the rights of such individuals. The rest of the article deals with examples of acts that can cause a person to be a whistleblower like retaliations, safety or health violations among others.
Analysis of the Concepts
The code of ethics does not usually operate in a void; it works together with other policies and statements that govern a company. When writing a code of ethics, we should look into the company’s history and industry, goals like those of CSR and it should be a solid document that should act as a guide for all employees.
How to write the code of ethics
Set priorities: this is deciding the values that the firm has that have to be outlined in the code and then determine what boundaries are to be enforced and those that not to cross. They then should clarify as to what their codes are about so as even new employee can be able to conform to them. Training incoming employees is also a positive step. The other step entails getting input for the code of ethics like from the employees or any person who is affiliated with the firm. When searching for input, small stuff should not be discussed at length. Then, it should be known that there are pitfalls that come with policies, one should know how to deal with them and where to turn for help and finally putting one in charge of overseeing the ethics are ran as required.
Various questions arise in regard to morality especially in this modern capitalist world on whether or not it does matter to have morality in business. One such question that arises is whether the purpose of corporations should be directed to doing good while another one asks if corporations should put their focus on maximization of returns for shareholders within the law. In analysis, the first question looks at firms like people who should act morally and be judged by set standards while the second question gives the view that there should be separation of the firm from morality and play by the laws.
Morality should not be judged through the second question and companies should not be thought of as entities but they should be seen as a group of individuals bound by moral obligations. Morality plays a great role in business as seen in the financial crash of 2008 where many firms with no morals crashed and many were disgraced as the public started viewing morality and firms with a new outlook.
Stakeholders
A stakeholder is anyone shows or has interest to a certain business. There are both internal and external stakeholders in a business. The stakeholders have varied interest and aims in regard to the firm and at times this clash. Internal stakeholders are entities that are found within the firm or business like the owners or workers while external stakeholders are those entities that are outside the business like the community in which the firm operates in.
Various activities affect the stakeholders in different ways according to their interests, aims and priorities in the firm. The various interests of different stakeholders are shown below:
- Owners: the owners of a business are only interested on how their venture is fairing and how much profits they can make from the business at any one time.
- Managers on the other hand are concerned with the running of the business and their salaries, allowances among others. Some managers may own part of the company.
- Workers are interested in earning high wages, job security and good working conditions with reasonable schedules and work hours.
- Customers are interested in quality products that are produced by the firm and also the prices should be reasonable. They are only interested in the utility gained.
- Suppliers want the firm to continue accruing their supplies.
- Lenders want to be paid on time and with the full amount
- The community wants the people in it to be employed by the business and also the firm to act responsibly in regard to the environment that they are operating in.
Various stakeholders show different traits but they all important to the success of the firm.
Utilitarian approach
This is the approach used where decisions are sought that are beneficial to a large group of people rather than suiting a few individuals. The net benefits that are gained by the people affected by a decision are known as a good. All stakeholders have the right to know of the decision regardless of how it affects them.
Act utilitarianism is a school of thought that looks at an action that is selected to take on a certain problem on the lines whether it is going to produce more good over the bad results. Rule utilitarianism on the other hand looks at the utility that is maximized by a certain option. If the option conforms to the maximization rule.
For rule utilitarianism, rules are what determine right or wrong while the act utilitarian a rule is just a rule. The two forms can be applied for various situations with ready justifications.
Whistleblowers
This is a person or agency that gives information on the illegal or unethical things a certain firm may do to law enforcement agencies or regulatory bodies. They are protected by the Congress so as to ensure fair dealing in different firms.
There are various reasons why there are whistleblowers and some are:
- Retaliation; this is whereby an employee faces sacking, laying off, demotion or any other action that may threaten an employee’s future may lead to the employee becoming a whistleblower to a given agency.
- Violation of health and safety codes; if the working conditions are not safe and healthy, an employer may file a complaint with the necessary agency. The whistle blower complaint is in an attempt to get better working conditions.
The whistleblowers tend to make the life in a firm better for all if they are doing it for the right reason.
In conclusion, I have seen that morality is a crucial thing to be incorporated in business activities. I have also seen that in order to draft a code of ethics, several steps have to be followed so as to get a perfect code of ethics and the desired results. I have learnt of stakeholders and their various needs and wants in a firm. The types and application of utilitarian approaches have also been explained well through the article. Finally, I have learnt about whistleblowers in business.
References
BBC Teachers, Stakeholders, BBC 2014 from http://www.bbc.co.uk/schools/gcsebitesize/business/environment/stakeholders1.shtml
EBEN Research Conference 2011, Does Integrity Matter? ebeni 2011 Jun 8th from
http://ebeni.wordpress.com/decisions/theories/consequences/utiliarianism/
El, Barbara, Examples of Whistleblowing in Business, Chron 2014from
http://smallbusiness.chron.com/examples-whistleblowing-business-2651.html
Hwang W., Victor, Does Morality Matter in Business?, Forbes 2012 23rd Oct. from http://www.forbes.com/sites/victorhwang/2012/10/23/does-morality-matter-in-managing-businesses/
Spiro, Josh, How to Write a Code of Ethics for Business, Inc. 2011, from http://www.inc.com/guides/how-to-write-a-code-of-ethics.html
