Ethics has been the focus of philosophical debates throughout the centuries, as far back as Socrates and Aristotle (Svensson & Wood, 2003). Every day, people in their personal lives may use their moral code in one way while not using the same moral code in their business decisions due to several different factors (Nelson, 2017). Stakeholders, inside and outside of an organization, may be affected by the ethical decisions made in business (Payne & Pressley, 2013). In the absence of guidelines, ethical dilemmas can result in poor consequences for stakeholders (Nelson, 2017). In business, people must use their courage to stand up for what is right despite the forces that may act against them (TED, 2011). Proper leadership can navigate an organization into making ethical decisions (Nelson, 2017).
Stakeholders Role in Ethics
The ethical decision making process in business involves multiple components (Nelson, 2017). One of the components affecting ethical decisions, according to Nelson (2107), is organizational factors which includes stakeholders (significant others), corporate culture, and obedience to authority. In business, it is important that all stakeholders are acknowledged as decisions may involve them on some level (Payne & Pressley, 2013). Stakeholders are those people that affect or can be affected by any decision (Payne & Pressley, 2013). Examples of stakeholders include: customers, members of the organization, third party vendors, or even society in general (Payne & Pressley, 2013). Stakeholders can influence the corporate culture by setting the values that an organization represents (Nelson, 2017). In regards to obedience to authority, where employees blindly follow leader’s orders without regard for ethics, stakeholders must have the courage to stand up for their values (Nelson, 2017; TED, 2011).
Improving Business Ethics
Improvements in unethical organizational culture relies on aggressive enforcement of established policies and guidelines within the organization (Nelson, 2017). A code of ethics can be developed and will provide explicit guidelines on the moral code a business will follow (Payne & Pressley, 2013). Business ethics require an agreement within an organization on the behaviors that will be allowed, which should start with the leadership (Nelson, 2017). Leadership greatly influences the direction of morality within the corporate culture (Nelson, 2017). Leadership can work with stakeholders to determine ethical risks, work to develop “buy-in” and trust from stakeholders, and develop and execute an ethics program using organizational resources (Nelson, 2017). Qualities of ethical leaders include: wanting to do right, transparency, actively involved in ethics program, and take into consideration the stakeholders (Nelson, 2017). In addition to a code of ethics, accepting of responsibility and the utilization of critical thinking skills can lead to corrections of deviations from the guidelines (Nelson, 2017).
Tim Cook, the CEO of Apple, relates the foundation for his ethics in surrounding himself with people who support making ethical decisions (Duke University, 2013). As discussed, obedience to authority explains how employees or stakeholders will comply with any ethical or unethical decision within an organization (Nelson, 2017). The ability of leadership to set the tone for the values and ethics and gain trust will have a great impact on how others will conduct business (Nelson, 2017).
Nelson, A. (2017, September 24). Lecture 5. Podcast retrieved from https://us.bbcollab.com/collab/ui/session/playback
Payne, D., & Pressley, M. (2013). A transcendent code of ethics for marketing professionals.International Journal of Law and Management, 55(1), 55-73. doi:http://dx.doi.org.prx-keiser.lirn.net/10.1108/1754…
Svensson, G., & Wood, G. (2003). The dynamics of business ethics: A function of time and culture–cases and models. Management Decision, 41(4), 350. Retrieved from https://search-proquest-com.prx-keiser.lirn.net/docview/212065897?accountid=35796
Tedx Talks (2011, September 11). Creating ethical cultures in business: Brooke Deterline at TEDxPresidio [Video file]. Retrieved from https://www.youtube.com/watch?v=wzicXbnmllc
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