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Business Ethical Issues

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    From large corporations to small businesses, individuals involved in all types of business often face ethical issues stemming from employee behavior. For example, whether an employee can spend work time checking personal email accounts, how a manager deals with claims of harassment and to what extent a manager can “groom” a certain employee for a promotion are all examples of ethical issues regarding employee behavior. There are legal consequences for some unethical employee behavior.

    For example, if a supervisor discriminated against an employee based on her gender, religion or ethnicity when making recommendations for a promotion, legal action could be sought. Small business owners can help to prevent ethical problems stemming from employee behavior by drafting a clear, attorney-reviewed set of standards that dictate behavior policies for employees at all levels. Employee Working Conditions In addition to employee behavior, there are a number of ethical issues business people must consider about employee working conditions.

    For example, employers must be aware of the safety of their work environment and if they have compensated employees for all the time they have worked. The must also consider if they have required an employee to work an unreasonably long period of time or if they have him doing an unusually difficult task. Just like there are legal consequences for some unethical issues regarding employee behavior, there are also legal consequences for unethical working conditions. For example, an employer who requires an employee to work without pay or who creates an unsafe working environment can face legal action.

    Supplier/Customer Relations In addition employees and business owners must consider the ethical issues involved with their relationships between suppliers and customers. Business owners in particular must consider whether it is ethical to do business with suppliers who have unethical practices. When dealing with customers or clients, business people must ensure that they use their information correctly, do not falsely advertise a product or service, and do not intentionally do sub-standard work.

    Small Business Ethics

    Although there are ethical issues like discrimination that apply to all areas of business, each business area has its own ethical concerns. For example, business people who act as consultants must ensure they are giving sound advice. In the area of small business, some major ethical issues result from hiring, firing and dealing with employees. For example, conflicts of interest may cause ethical issues in small businesses, especially if they are family run. When personal family issues interfere with business decisions, this is a conflict of interest and an ethical concern.

    Discrimination You’re the boss in a predominantly male environment. The presence of a new female employee stirs up conflict because your company has not had a chance to conduct sensitivity training. Some of your male employees make inappropriate remarks to your new employee. She complains to you; in response, you sanction those responsible for the conduct. You also wonder if it would be wise to move your new female employee to another position where she would be less likely to draw attention.

    Treating your female employee differently based on her gender or in response to a harassment complaint may be considered discriminatory and unethical conduct. Side Deals You’re a business manager with an employment contract. The contract requires you to work solely for your employer and use your talents to attract new clients to the business. If you begin attracting more clients than you believe your employer can reasonably handle, you may wonder if there would be an ethical issue with your diverting that excess business elsewhere and taking the commission.

    If you don’t, at minimum, disclose the idea to your employer, you will likely be in breach of both your contractual and ethical duties. Partners You’re a partner in a business and see a great deal of profitability on the horizon. You don’t believe that your partner deserves to profit from the business’ future success, because you don’t like his personality. You may wonder if you could simply take his name off the bank accounts, change the locks and continue without him. If you proceed with this course of action, you would likely be in violation of your ethical and legal obligation to act n good faith concerning your partner. The better course of action may be to simply buy out his interest in the business. Gross Negligence You’re on the board of directors for a publicly traded corporation. You and your fellow board members, in hopes of heading off early for the holidays, rush through the investigatory process involved in a much-anticipated merger. As a board member, you have a duty to exercise the utmost care respecting decisions that affect the corporation and its shareholders.

    Failing to properly investigate a matter that affects their interests could be viewed as gross negligence supporting a breach of your ethical and legal duty of care. Social Networking Ethics Comments regarding employers or coworkers posted on social networking websites are costing employees jobs across the country. The ethical and legal challenges surrounding the use of social media and its consequences in the workplace affects the business industry as a whole because employers across the nation are setting policies regarding employee use of these websites while working and even what these workers can say when off the clock.

    According to the Business Ethics website, as of 2010 software developer Cisco Systems Inc. even has a program, Cisco SocialMiner, designed to help employers monitor their employees’ social network site status updates, forum posts and blog posts in real time. The line between an employer’s right to monitor employees and an employee’s right to privacy can easily blur in this climate. Harassment in the Workplace Maintaining professional workplace relationships between employees is a continuing challenge for employers regardless of the industry.

    This challenge can become more difficult when the image companies choose to project has a significant sexual charge. This creates an ethical dilemma about what images companies use to sell products and the conduct expected of employees in the workplace. There’s never an excuse or a justifiable reason for harassment of any kind in any workplace, though a willingness to use sexually charged imagery in advertising may indicate a working climate where harmful behaviors can occur with costly lawsuits resulting from permissive climates, reports the Business Ethics website.

    Paying Employees Equally Even though federal and state laws require workers to receive equal pay for performing similar work regardless of gender, race, age, ethnicity, disability or religion, the problem still persists in many industries. According to the National Committee on Pay Equity, as of 2010 a $10,784 gap in annual salary still persists between men and women nationwide. The ethical dilemma arises when some companies choose to men higher wages than women while at the same time espousing messages of equality and fair play.

    Honesty and Integrity

    Setting a standard for business integrity creates the foundation of trust, and “trust is the grease of commerce,” according to Chairman and CEO of Clorox Don Knauss. Without determining standards for business honesty and company integrity, your staff and managers may apply these concepts based on different interpretations. Establishing a formal document that defines each term and uses practical examples from typical situations faced in your industry provides a working definition and also offers useful illustrations of the terms for staff still uncertain of the meaning.

    Fair Practices Defining fair or just business practices mandates creating a formal handbook for your firm that lists the precise regulations you require employees to meet in conducting business representing your company. Handbooks dealing with the concepts of fairness, justice and an approach to the common good of both the company and the consumer help workers apply key ethical concepts to the workplace. Mandatory staff training also helps explain the concepts and allows management an opportunity to reinforce the language used in the regulations.

    Defining Ethical Concepts Consumers typically define ethical business practices by incorporating personal moral issues when purchasing goods and services. A study conducted by “The Wall Street Journal” in 2008 of more than 200 volunteers found that companies making ethical choices by creating products using environmentally safe practices and non-polluting technology, attracting staff and employees under a progressive program that includes hiring a diverse workforce, manufacturing consumer-safe products, and following moral standards especting human rights, including banning forced and child laborers, were rewarded by consumers. Consumers paid premium prices for items produced by businesses adhering to high moral standards incorporating these business policies. Disclosure “Caveat emptor,” the Latin term for “buyer beware,” assumes the buyer accepts the risks of doing business, your business also has an ethical and moral business responsibility to disclose any hidden risks not normally associated with the purchase or investment.

    The types of disclosures vary with the business offerings, but companies providing products with a high risk for health damage or personal injury require corporate guidelines for your staff in marketing and selling the items. Ethical considerations also require firms selling previously owned or damaged items to develop a policy for disclosing potential flaws and imperfections. Real estate and vehicles are two examples of sales requiring clear corporate business concepts that incorporate both legal requirements and ethical concepts embraced by your firm.

    Pressure for businesses to act ethically Businesses and industries increasingly find themselves facing external pressure to improve their ethical track record. An interesting feature of the rise of consumer activism online has been increased scrutiny of business activities. Pressure groups are a good example of this. Pressure groups are external stakeholders they * Tend to focus on activities & ethical practice of multinationals or industries with ethical issues * Combine direct and indirect action can damage the target business or industry Direct consumer action s another way in which business ethics can be challenged. Consumers may take action against: * Businesses they consider to be unethical in some ways (e. g. animal furs) * Business acting irresponsibly * Businesses that use business practices they find unacceptable Higher revenues – demand from positive consumer support Improved brand and business awareness and recognition Better employee motivation and recruitment Higher costs-sourcing from Fairtrade suppliers rather than lowest price Higher overheads- training & communication of ethical policy

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