Business Ethics
Business
ethics (also corporate ethics) is a form of applied ethics or professional
ethics that examines ethical principles and moral or ethical problems that
arise in a business environment. It applies to all aspects of business conduct
and is relevant to the conduct of individuals and entire organizations. Ethics
are the rules or standards that govern our decisions on a daily basis. Many
equate “ethics” with conscience or a simplistic sense of “right” and “wrong.”
Others would say that ethics is an internal code that governs an individual’s
conduct, ingrained into each person by family, faith, tradition, community,
laws, and personal mores.
Unethical Behavior - Enron Scandal
Ethics
can be defined as a set of moral principles or values. For a society to function
in an orderly manner, ethical behavior is a necessary.
In
the Enron scandal, Trustworthiness is the major ethical principle that has been
violated. There was a lack of truthfulness by the management about the health
of the company. The senior executives believed Enron had to be the best at
everything it did and that they had to protect their reputations and their
compensation as the most successful executives in the US. To achieve the
financial goals, they put the companies and employees at risk by engaging in
malicious practices.
They
mislead shareholders by engaging in financial tweaking in order to inflate the
performance of Enron. Kenneth Lay knew that the value of the shares is going to
erode, he started selling Enron shares, and at the same time, he encouraged
employees and investors to buy the stock.
In
addition, there was conflict of interest between the two roles played by Arthur
Andersen, as auditor but also as consultant to Enron. Many executives at Enron
were indicted for a variety of charges and some were later sentenced to prison.
Enron's auditor, Arthur Andersen, was found guilty in a United States District
Court of illegally destroying documents relevant to the SEC investigation which
voided its license to audit public companies, effectively closing the business.
Good Ethic -Starbucks
Good ethics make good business sense. Your company stands to profit from a reputation for acting with honesty and integrity.
Starbucks
is considered one of the world’s most ethical companies (Smith, 2012).
Starbucks makes conscious efforts to be a responsible company and conduct
business in an ethical manner. It prides itself in the ethical way it does
business, through community, sourcing, environment, diversity and wellness.
Business analysts agree that Starbucks is a widely respected company because of
its commitment to social responsibility. Starbucks has earned this reputation
through its actions in all phases of its business and live out this commitment
through both its mission statement and values.
Starbucks demonstrates its values in a number of ways. For example, Starbucks is the only major food and beverage chain to provide health benefits for both full-time and part-time employees. Many employers in the fast food industry do not provide health benefits to part-time employees. Also, each store’s employees are allowed to select which local charities they wish to promote through volunteer hours, products, and cash contributions. For example, in April of 2012, Starbucks contributed 230,000 hours of community service.
Starbucks demonstrates its values in a number of ways. For example, Starbucks is the only major food and beverage chain to provide health benefits for both full-time and part-time employees. Many employers in the fast food industry do not provide health benefits to part-time employees. Also, each store’s employees are allowed to select which local charities they wish to promote through volunteer hours, products, and cash contributions. For example, in April of 2012, Starbucks contributed 230,000 hours of community service.
