Business Ethics opportunities and conflicts Business ethics comprises principles and standards that guide individual and

work group behavior in the world of business. Stakeholders determine these conventions, and they may change over time. The most basic of these standards have been codified as laws and regulations. Business ethics goes beyond legal issues. Because individuals and groups within a company may not have embraced the same set of values, ethical conflict may occur. Questionable decisions and actions may result in disputes that must be resolved through some type of negotiation or even litigation. Codifying ethical standards into meaningful policies that spell out what is and is not acceptable gives businesspeople an opportunity to reduce the possibility of behavior that could create legal problems. Business decisions involve complex and detailed discussions in which correctness may not be clear-cut. It is important that a shared vision of acceptable behavior develop from an organizational perspective to create consistent and reliable relationships with all concerned stakeholders. Understanding the ethical decision-making process can help individuals and businesses design strategies to prevent misconduct. Three of the important components of ethical decision making are individual factors, organizational relationships, and opportunity. Significant individual factors that affect the ethical decision-making process include personal moral philosophy, stage of moral development, motivation, and other personal factors such as gender, age, and experience. Moral philosophies are the principles or rules that individuals apply in deciding what is right or wrong. Most moral philosophies can be classified as consequentialism, ethical formalism, or justice. Consequentiality philosophies consider a decision to be right or acceptable if it accomplishes a desired result such as pleasure, knowledge, career growth, the realization of self-interest, or utility. Consequentialism may be further classified as egoism and utilitarianism. Ethical formalism focuses on the rights of individuals and on the intentions associated with a particular behavior rather than on its consequences. Justice theory relates to evaluations of fairness, or the disposition to deal with perceived injustices of others. Kohlberg proposed that people progress through six stages in their cognitive moral development. McClelland identified three different social needs that may motivate an individual in an ethical decision-making situation: achievement, affiliation, and power. The culture of the organization, as well as superiors, peers, and subordinates, can have a significant impact on the ethical decision-making process. Organizational, or corporate, culture can be defined as a set of values, beliefs, goals, norms, and rituals shared by members or employees of an organization. Whereas a firms overall culture establishes ideals that guide a wide range of behaviors for members of the organization, its ethical climate focuses specifically on issues of right and wrong. Significant others include superiors, peers, and subordinates in the organization who influence the ethical decision-making process. Interaction between corporate culture and executive leadership helps determine the ethical value system of the firm, but obedience to authority can also explain why many people resolve workplace issues by following the

directives of a superior. The more a person is exposed to unethical activity by others in the organization, the more likely it is that he or she will behave unethically. Superiors and coworkers can create organizational pressure, which plays a key role in creating ethical issues. Opportunity is a set of conditions that limit barriers or provide rewards. If an individual takes advantage of an opportunity to act unethically and escapes punishment or gains a reward, that person may repeat such acts when circumstances favor them. Ethical Opportunities Businesses ethics are moral principles that should be considered in business decisionmaking. Ethical firms act socially responsible towards their stakeholders, such as their customers, employees and local communities. Businesses have to face a compliance cost if they choose to act ethically. If compliance costs are too high business might be forced to act in an unethical way. If businesses choose not to act ethically and ignore concerns of their stakeholders, this will present threats to the business:

Ruined image: Nobody will trust the business, or its products Cannot achieve long term profitability: Less people will buy the firm's products as time progreses and the business still chooses to ignore stakeholder interests

If businesses choose to act ethically, it will present the business with more opportunities so they can benefit from several ways:

Attract and retain good quality workers: If a business acts ethical it will have a good reputation and skilled workers want to work in businesses with a good and recognized image. Attract new customers and retain old customers. If a business chooses to act ethically they are more trustworthy, therefore customers will buy products and services made by the business. Generates good publicity and public relations: ethical firms have a good corporate image and will be more trusted by the public. Other firms will seek to have working or trading relationships with the ethical firm. A journal was once written by Jonathan Hall which is written below.

Jonathan Hall

Several years ago, I wrote a paper for the JBM entitled, 'Corporate Ethics & the New Commercial Paradigm'. I noted that while the concept of ethical behaviour in the commercial world was nothing new, it was fast becoming a hot topic and could usher in a new way of doing business. I hypothesised four reasons why I thought this was the case: the seemingly unstoppable rise of the multinational corporation; the ever more sophisti-cated spoilt-for-choice consumer; the power of pressure groups and the drive and ambition of some of today's most successful brands. We appear to have now reached the environmental and social tipping point, something that confers a huge responsibility upon marketers, and creates, at the same time, a huge opportunity. I 'd like to expand upon three reasons why. First, from a consumer perspective, ethical concerns are finally the mainstream. Research we have done at Added Value has identified four fast-growing consumer trends. Healthy Awakening is the behaviour of a new generation of mums and others who may not have previously had health issues on their radar, but who, with the plethora of health and obesity scares and the strong media focusfrom Jamie Oliver's 'School Dinners' to Gillian McKeith's 'You Are What You Eat'have woken up to the issues. They feel responsible for the health of their whole family and are now scrutinising labels, increasingly buying organic (the UK's Tesco experienced 30 per cent organic growth last year) and choosing superfoods to maximise mind and body potential. Importantly, this new curiosity has bred a greater awareness of the food chain and the interrelationship between what we eat and the state of our planet. They opt for the likes of Innocent, Rachel's Organic and The Food Doctor, which have environmental impact at the heart of their brand promise. Empathising, formerly polarised between the behaviour of militants or local community do-gooders, has become a broader church. Many consumers have moved beyond a sense of guilt to identification and solidarity with others less fortunate. These consumers feel empowered by taking positive action to help people in plight by giving to Oxfam, or buying Fairtrade, or shopping with their Save the Children credit card. Local community efforts are also part of this. Their small but constructive steps reinforce their sense of personal integrity. Ethical Badging is about buying ethical because it makes you feel chic, trendy and noble. The brands and products ethical badgers choose are typically of excellent quality; they are often more expensive, but these consumers believe they are worth it. Brands that appeal to them are the likes of Green and Black's, organic Fairtrade Maya Gold chocolate bars, and the Ethletic: a Converse-inspired shoe made with environmentally certified materials. They shop with their Red Amex card, promoted by Bono, which gives a percentage of each purchase to the Global Fund to fight AIDS. These consumers want to make a statement and be seen to be making it. EWOLthe Ethical Way of Life behaviour is perhaps the most complex, touching on many aspects of consumers' everyday lifestyles. It begins by an increased sensitivity to

the environmental impact of personal actions, and then transforms into behavioural changes. EWOLers begin by turning off the lights, recycling, minimising water usage and then take it further, integrating their carbon footprint into their mindset, seeking out alternative energies, etc. They like brands such as Worn Again, which makes footwear from recycled materials, and responsibletravel.com, which offers environmental tourism. They'll get their fruit and vegetables from Organic Connections and power from the likes of Ecotricity or Green Energy UKa green reusable energy supplier with a unique share scheme where consumers become partners in green investment. Secondly, the rest of the organisation can't be trusted with the ethical agenda. There are huge risks that they will leap on the bandwagon and land the organisation in dire straits. At worst, you could have a commercial catastrophe on your hands, as experienced by the likes of Nike and McDonalds, who saw a long-term collapse in their share price following rows over labour practices and unhealthy eating. Thirdly, this is a real opportunity for marketers to influence the organisation. An Executive Marketing Director has both a functional responsibility for understanding consumers and building brands, and a legal responsibility to maximise return to shareholders. Squaring these two responsibilities is a real challenge but the ethical debate, and what happened to Nike and McDonalds, means that shareholders are more open than ever before to the kind of ethical initiative the retailer Marks & Spencer has just taken in the UK. Businesses commonly face five challenges in setting and following an ethical agenda: 1. 'We've tested ethical ideas, and whilst consumers say they're interested, they just don't buy'. This is meat and drink to marketersof course, consumers won't buy a green washing powder if it doesn't clean clothes. But if it functions as well as its competitors, that additional reason to buy, sensibly communicated, can make all the difference to consumer choice. 2. 'Everyone is doing it nowadays. We don't want to just jump on the bandwagon '. The basic rules of marketing apply here. Do it first, or do it better. And leverage your current brand positioning, rather than changing fundamentally what your brand stands for. 3. 'How can I risk it, when the company is not 100 per cent clean '. First and foremost, don't overclaim. You may not want to claim anything at all, at least for now, but that doesn't mean you can ignore the ethical agenda. Be honest. Admit your weaknesses. Engage with your critics. Set targets and show progress. All things Marks & Spencer has set out to do; but as I suspect they know, the hard work starts now. 4. 'It's so hard to change a big company'. Truebut is that a reason to limit ourselves to the comfort zone of television sponsorship and trader promotions? If the likes of Pepsicowho have an ambition to have half their revenue coming from 'better for you' or 'good for you' products within five years can take on the challenge, why not you? 5. 'How do you engage with consumers without overpowering them, or risking distrust?' Again, don't overclaim, and apply good marketing principles. Be

succinct, single-minded, focused on the end-benefit andabove allsubtle. Our task, as it always is, is to lead consumers to the right conclusion, without ramming it down their throats. Ethical, then, is a huge topic for marketers, and will only grow in importance. And there are three reasons why we must embrace it: 1. Consumers are demanding an ethical agenda. 2. This issue is too important to be left to others in the organisation. 3. And this is an opportunity for marketing to reassert itself at the heart of an enterprise's decision making. Conflicts An ethical conflict occurs when you or a colleague makes a decision that could be seen as illegal or inappropriate to a third-party. Ethical conflicts result from the smallest lies to decisions that can affect employees within the company, investors or customers. Ethical conflicts occur before, during and after decisions are made. For example, if your boss asks you to shred an incriminating record, this is an ethical conflict even though you have not performed the task. In the broadest terms we characterize the motivation behind feeding the hog and Silent Saboteurs as various forms of ethical conflict. That is the term we use for condition where the values of the organization, the values of the employees and perceived criteria for success (as manifested in the formal and informal systems of organization) are misaligned. the the the the

That misalignment results in employees believing they must protect themselves from the organization and/or gives them reason to believe it is appropriate to strike back at the organization. The organizational state where values, behaviors and perceptions are aligned is called ethical congruence. When we talk about lying, cheating and stealing in an organization we are discussing the direct tangible symptoms of ethical conflict. When we talk about finding and fixing ethical conflict we are discussing ways to increase total ethical congruence. That means we reduce indirect tangible and intangible costs as well. Types There are many types of ethical conflicts in the workplace, however conflicts usually deal with the following categories: fraud, confidentiality, finance and honesty. Fraud occurs when a company knowingly presents information that is incorrect to employees or the public. For example, the energy company Enron fraudulently modified its income statement to appear as if the company was performing better than it actually was. A confidentiality ethical conflict occurs when information is viewed or accessed by a party that should not be privy to that information. Financial conflicts typically involve stealing,

either in small or large amounts. For example, taking office supplies from the company supply closet is unethical behavior. Ethical conflicts that develop from dishonesty usually occur because a company does not provide a complete picture of information to customers or employees. For example, it is unethical if a company recruiter tells you that you will make $100,000 per year with the company but does not tell you that it takes 10 years to reach that salary. Resolution Resolving ethical conflicts may be as simple as a discussion with the party engaging in unethical behavior, or, in extreme circumstances, legal intervention. If an employee is frequently playing computer games at work instead of focusing her attention on a project, a discussion about the problem would be necessary. If your company claims a financial loss on a fake product line for tax reasons, the Federal Trade Commission may open an investigation into the unethical behavior. Prevention Ethical conflicts can be prevented in the workplace by using a two-sided approach. First, your company must educate employees about what is considered an ethical conflict. Education can occur in training sessions or during meetings for other matters. Second, company leaders must set an example for lower-level employees. Decision makers who hold ethics in high regard are less likely to have employees that breach those ethics during the business day. And a journal is written below; Report Finds Ethical Conflicts in Journals By ANAHAD O'CONNOR Four medical and scientific journals recently published studies that failed to disclose the authors' financial conflicts of interest, according to a report by the Center for Science in the Public Interest. Many journals have tightened disclosure policies in recent years as ties between pharmaceutical companies and researchers have come under increasing scrutiny, and the journals cited in the report have conflict-of-interest disclosure policies. The study, which was released yesterday, looked at four journals from last December to February. It examined the 163 articles that had no disclosure statements for the major authors. In 13 of the articles, or roughly 8 percent, at least one of the authors did not reveal ties to companies that stood to profit from the research or other information that could have influenced the findings, the researchers found. The Center for Science in the Public Interest, an advocacy group in Washington, reviewed articles in The New England Journal of Medicine, The Journal of the American Medical Association, Environmental Health Perspectives, and Toxicology and Applied Pharmacology. In most of the 13 cases, the researchers determined that the authors violated disclosure policies by neglecting to provide the journals with appropriate information.

In at least one case cited in the report, the researchers found that a journal might have been at fault by not fully publishing information that an author provided. Case Study A 40-year-old man lost control of his vehicle and struck a guardrail in a single-car collision. He was not wearing a seat belt and was thrown through the windshield, sustaining a traumatic, closed-head injury. He was brought to the trauma center via helicopter and was admitted to the surgical intensive care unit. The night staff provided support to the patients wife during her first visit to see her husband, who was receiving mechanical ventilation and was unresponsive and surrounded by multiple invasive catheters and equipment. The trauma team briefly met with her soon after admission to explain her husbands grave prognosis. The next day, a senior student in an undergraduate critical care nursing course assisted the nurse preceptor in managing the patients complex care. The patients wife came into the unit for her second visit just as the nurse preceptor and the student were preparing the patient for the morning visit. As the patients wife approached the bedside, the alarms of the monitors for the cardiac and arterial catheters sounded, indicating a cardiac arrest, and CPR was initiated. The healthcare personnel handling the code situation pulled the privacy curtains around the bed in an attempt to screen the situation from view by the patients wife and the other patients and their visitors within the unit. At that moment, the student took the stunned wife into the hallway, and a nursing supervisor arrived to lead the woman into a private waiting room. The student later reported the events of the morning to her peers at a clinical conference, including the fact that the patients wife had arrived just as the code started. The student explained that the patient did not survive despite the teams efforts and that the patients wife did not have the opportunity to see him again before he died. The students statement caused the instructor to question the policy in almost all adult critical care units that family members access to loved ones during CPR should be restricted. The ethical dilemma that arose in this situation involved the conflict between the desire of the patients wife to be present during CPR and the desire of the trauma team to exclude her. A Case Study Let's examine one organization and use it as a model of how you find and fix the Silent Saboteurs. This was the customer service bureau of a large company. The organization's performance, as measured by the standard service indicators, was good but it was obvious that employees were highly stressed. A concerned management knew something was wrong even though all of the measurement systems indicated everything was as it should be. They called the author in to help them resolve what they had labeled a morale problem. Here employees were using both retaliatory and self-protective behaviors. They were getting even for what they believed were unfair pressures to meet unrealistically high performance requirements and they were protecting themselves from what they characterized as a hostile management environment.

Take sales quotas as an example. Many of the people in the customer service bureau had left the sales side of the organization to escape the pressure to meet ever increasing quotas. Once the company decided that there were sales opportunities in service calls, customer service employees were required to make sales attempts during every customer contact. These employees found several creative ways of meeting their sales quotas (protecting themselves from the organization) while punishing the organization for making them meet these sales quotas in the first place.