Factors Governing Business Ethics
Business ethics has deep and wide roots in society. Some of the pressure points of ethical behavior are given below:
- Value Forming Institutions: The value of an individual is shaped by various institutions, e.g. family, religion, school and the government. These institutions prescribe what is good or bad for an individual. Right behavior is rewarded while wrong behavior is punished. This continues throughout the life of an individual as he acquires certain values through his daily experience in the long run. The influence of these institutions are inter-related. The values fostered by one institutions are reinforced by the others. As an organisation is an agglomeration of individuals, its values are the collective values of its members. That is why, a conflict may arise between the values of the organisation and those of an individual.
- Organisational Goals: The objectives of an organisation influence the values of its members. A business is an economic institution and it must be profitable. The classical economic theory stressed profit maximisation goal. Many times, managers may be forced to compromise their personal ethical values in order to achieve organizational goals. But the goal may be tempered by many values. Leadership, integrity, knowledge and skills, survival are some of them. All these factors change the goals of an organisation and consequently expected behavior from its members.
- Work and Career: Work refers to the job and the tasks or responsibilities associated with it. Career, on the other hand, represents a series of jobs or positions. Each work has its own values and persons performing the work follow these values. For example, sales people may have different values than engineers. Thus, work and career create special values that give unity, cohesion and meaning to persons and groups.
- Superiors: Most people succumb to pressure from superiors in doing things that they may consider unethical otherwise. For example, a secretary may tell a visitor that the boss is out when he is actually in because her boss has told her to do so. Many a time an employee may sign false documents due to pressure from the boss.
- Peers and Colleagues: An individual in a work group tends to conform to the norms of the group. He does so either to get approval or friendship of his colleagues. He adopts the attitudes, beliefs and values of the group to which he is associated. Thus, the behavioral standards of the peers and colleagues exercise a significant influence on the value system of an individual. For example, a persona may justify some indiscretions on the basis that ‘everybody’ is doing it’.
- Professional Codes: These days three types of codes are available: First, big companies formulate their philosophy or creed to guide the behavior of their employees. The main objective of these documents is to build the company’s image by showing the company’s concern for ethical behavior in the society. Secondly, company policies contain a code to guide actions that have an ethical conduct, e.g., no discrimination in recruitment on ht basis of caste, creed, sex and religion. Thirdly, professional bodies have prescribed ethical codes to govern the conduct of their members.
