Business Ethics And Characteristics Of Highly Ethical Organisation Business

Table of Content


1.1 Meaning of Business Ethical motives

Business moralss are the moral values, norms or moral criterions which determine and govern the concern patterns and determinations. It is an applied moralss which trades with the factors of concern environment, corporate issues in the organisation and carry oning concern in an honorable manner carry throughing the outlooks of stakeholders. ( Velasquez, 2001 )

1.2 Features of extremely ethical administration

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They have definite vision and aims.

They focus chiefly on the involvements and carry throughing the demands of their stakeholders and interact with them invariably.

They provide quality of goods and services seasonably through their every behavior.

Every person of the organisation is responsible for his/her professional responsibilities and work duties.

( McNamara, n.d )

Johnson and Johnson is an illustration of the extremely ethical organisation.

1.3 Teleological and Deontological Theories

The teleological theory provinces that if the results of an action are desirable so the action is acceptable and morally right whereas if the results are non desirable so the action is unacceptable and incorrect. It is besides called as the consequentialist theory because the determination of whether a peculiar activity is morally right or incorrect is based on the terminal or the purpose of that activity.

On the contrary, the deontological theory suggests that the actions are acceptable if the rules or the guidelines under which those actions are conducted are morally right. It is besides called as the non-consequentialist theory or attack. Deontologists suggest that the opinion sing an action is done non on the footing of effects of the action but on the footing of desirableness of the implicit in rules. Furthermore, they said that we have duty to execute certain Acts of the Apostless following the set of morally acceptable rules irrespective of its results. ( Crane and Matten, 2007 )

Critical Analysis of positions of David Rosser and Dr Barry Morgan

Analysis of the positions of David Rosser

“ Business repute has been on a downward tendency for excessively long and is a concern to a turning figure of concern leadersaˆ¦ a clip of increasing transparence and rapid airing of information, ethical concern criterions will progressively be critical to deriving and retaining a license to run from clients and employees. ” -David Rosser

2.1.1Ethical Environment for any concern endeavor

An organisation can run successfully if it complies with the ethical norms and values of the society and maps by carry throughing the ethical criterions of concern. It should react and esteem the involvement of its stakeholders such as stockholders, general clients, employees, providers, concern associates, attorneies, creditors, fiscal establishments, authorities and societal groups etc. Repute of the organisation besides depends on the degree of the trust that the stakeholders have on the organisation. It should guarantee that whether the executives and employees at the different degrees of direction are carry throughing their responsibilities ethically or non. ( Brooks and Dunn, 2009 )

The organisation is accountable for every activity that it conducts. If it fails to fulfill the outlooks of stakeholders so it will negatively impact the organisation itself. If the necessary actions and sound determinations are non made at the right clip so it may fall in from the industry. Examples of such companies are Enron, WorldCom and Arthur Anderson. ( Anon, n.d )

Enron, the 7th largest company in the USA, was found guilty for hiding its existent net incomes and accused for non uncovering its debts and off undertakings in its histories. It was bankrupted due to the unethical concern patterns in the twelvemonth 2001. ( Anon, 2002 ) .

2.1.2 Analysing concern moralss with an integrated attack

An incorporate attack involves taking concern determinations sing assorted facets of the concern like the economic, legal and moral factors. This attack can be best explained by analyzing the response given by Johnson and Johnson to Tylenol crisis.

Tylenol is one of the well celebrated merchandises of Johnson and Johnson. In the twelvemonth 1982, it faced terrible challenge as the study stated that several people died in Chicago after devouring extra-strength Tylenol. The company took immediate action and rapidly cleared the bottles of capsules from the shops in Chicago and recalled those which were identified as infected. It responded to the public concern efficaciously and suspended the advertizement of the Tylenol temporarily. After the first decease in this instance was identified the company made a callback of the 31 million bottles of the regular every bit good as excess strength Tylenol that were unsold from the full state. In order to salvage the trade name name of Tylenol concern schemes were redesigned. However, the major concern was on the public assistance of the consumers. After two months, it launched the improved signifier of the capsules in a to the full protected i.e. “ Tampered immune ” signifier in the month of November, 1982. Soon the company was able to derive the assurance of the clients. The public realized that the company was a victim of a senseless offense. It was successful in accomplishing this purpose because it had enjoyed the good will from the populace for more than a decennary. It has been able to set up strong bond of trust in the society as it has followed its creed and was able to take right determinations at the right clip. ( Boatright, 2009 )

From the above analysis the statement given by David Rosser can be justified and we can state that it ‘s of import for any concern endeavor to follow the ethical concern criterions to acquire blessing from its stakeholders so merely it can last in the industry.

2.2 Differences between the positions of David Rosser and Dr Barry Morgan

‘Dr Morgan believes an curse for those with the MBA, which lays out a codification of rules like the Hippocratic Oath does for physicians, would assist with responsible leading in concern. ‘ ( Anon, 2011 )

MBA alumnuss are the hereafter concern leaders. They should be cognizant of every concern and ethical issues. Dr Morgan emphasized that they should take a formal Oath which comprises of the set of the ethical concern criterions. It will oblige them to be sincere towards their responsibilities and aid in constitution of the effectual leading.

After analyzing the concern tendency, it ‘s evident that many companies collapsed as they failed to adhere to the ethical criterions. Besides, the recent banking crisis severely affected the universe economic system. The banking civilization of administering big sum of fillips to the bankers even when they are gaining immense wage and the MPs ‘ dirt of misapplying their allowances and disbursals have created choler among the general populace. Therefore, Dr Morgan said that a alteration is must in the concern universe. These incidences showed that immediate actions are needed to be taken and every concern organisation must be cognizant about carry oning their activities ethically.

“ The MBA curse is something deserving sing because in the terminal conventional ordinance can non bring around moral sightlessness or regulation out greed. ” -Dr Barry Morgan

The fluctuations in perceptual experience, personal values and beliefs have of import impacts in the professional determinations of the concern forces. Therefore, curse is necessary as it acts as a set of criterions or rules on the footing of which any concern forces conducts his/her maps and takes professional determinations.

To accomplish fiscal success an endeavor may non follow the ethical criterions and it is where the importance of effectual leading is required which could take the organisations following the codifications and criterions of the Oath.

The position of Dr Barry Morgan is deontological. He emphasized that MBA graduates should take Oath so that the concern determinations are made ethically and concern activities are conducted consequently.

David Rosser, a manager of CBI Wales, stated that at this age of technological promotion the concern place and the fiscal position of an organisation are evident to the populace. It should move ethically in carry oning its concern operations to fulfill the outlooks of the stakeholders.

“ The concern activity which generates those net incomes must be ethical, and where based on taking of high hazard, the effects of failure must fall on the stockholders and those employees – non on the public bag. “ – David Rosser

He argued that an organisation has to move ethically in a manner of net income coevals. If an endeavor fails due to the hazard factors so the effects must be borne by itself non by the general populace. Due to the banking crisis populace suffered immense loss in their investing for illustration many companies like Enron, Worldcom, Lehman Brothers, General Motors, Washington Mutual and Refco Inc. bankrupted. However, he stated that the payment of fillips to the bankers is non an immoral act because the Bankss must honor their employees and whenever the Bankss think of doing payment to anyone so they foremost consider their employees and executives. The chief ground behind this is that by utilizing their expertness the Bankss have been able to work and they have been get bying with the fiscal crisis.

The chief concern of David Rosser is that the concern activities which help to turn the concern organisation demand to be ethical to derive the support and blessing of the stakeholders so that the organisation can run successfully. He did non give much importance to whether the concern executives are having high degree of fillips or non. The statement of David Rosser holds the position of teleological construct.

But after analyzing the positions of Dr Barry Morgan we can state that the wages the bankers are acquiring must be reduced as the sum can be invested in the little concern sectors and the concern leaders must follow the set of criterions of concern moralss which will be mentioned in the Oath.


Hippocratic Oath taken by the MBA alumnuss


Business Activities and determinations


Carry throughing the outlooks of the stakeholders and deriving success in the concern

Non-consequentialist Ethical motives

Consequentialist Ethical motives

Figure: Consequentialist and Non-consequentialist Theories

Beginning: Crane and Matten, 2007


In the present concern scenario, it ‘s critical for any concern endeavor to follow the ethical criterions and it should be able to carry through the outlooks of its stakeholders to last and run the concern successfully. It makes the society cognizant about the development in the concern environment and addresses the inquiries of what are incorrect and right concern activities and determinations. It acts as a foundation to analyze the causes and deductions of the concern malpractices and to cut down its negative impacts on the general people.

The positions of David Rosser and Dr Barry Morgan are analysed in this study and contrast is besides made. Dr Barry Morgan believed that in this competitory concern age, the success of any concern endeavor could non be judged merely on the footing its fiscal addition. The most noticeable and critical factor is the extent to which the endeavor adhere to the ethical concern criterions. In the conference of Profession Wales Group, Dr Barry Morgan said that the bonus civilization of the Bankss to the bankers is immoral and all the MBA alumnuss should take the Hippocratic Oath as taken by doctors so that they fulfil their responsibilities following with the codifications of concern moralss. His positions are based on the deontological theory. On the other manus the positions of David Rosser are teleological. He said that payment of fillips is non immoral and gave importance to the ethical concern activities that helps in bring forthing net incomes for the concern organisation.

4. Recommendations

Dr Barry Morgan addressed that fiscal crisis, the fillip civilization and disbursals dirt of the MPs ‘ showed a diminution in the moral values of the concern professionals. The Hippocratic Oath that is taken by the MBA alumnuss will assist in the constitution of effectual leading in the concern universe. This will enable those come ining the concern universe to move ethically in their concern traffics. In fact, it will work as reminder and actuate them to be consistent with their responsibilities ethically clip and once more.

In 2009 the pupils of Harvard Business School took the Curse that they will function for the improvement of the society. If the concern schools comply with the Dr Morgan ‘s recommendations so this will assist to bridge the spread in between the classs that the pupils learn and the existent concern patterns. It ‘s of import to larn the rules on the footing of which existent concern universe operates. Therefore, every concern schools should hold such proviso so that those get downing their calling can hold grasp on the values and rules of the concern. Further, it creates foundation to take the ethical concern determinations. In this extremely competitory market where ethical concern norms have been neglected following such proviso is productive and critical.

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Business Ethics And Characteristics Of Highly Ethical Organisation Business. (2017, Jul 24). Retrieved from

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