Ethics of Business and Management

Coursework 1:
Ethics, Business and Management

What are ‘business ethics’?
What are the complexities that you have to address?

        ‘Business ethics’ is a phrase whose definition has long been evolving and is therefore a very prominent topic of discussion. This is due to the ever changing nature of both politics and our community. As new laws and legislations arise, and as our community evolves, what becomes right and wrong in terms of business ethics is also altered. (1)

        Essentially the word business is defined as ‘a person’s concern’ or ‘works to be done/ matters to be attended to’ and ethics are defined as ‘moral principles that governs a person’s behaviour or the conducting of an activity’.  [Oxford Dictionary]. There are no ‘set rules’ for ethics, therefore we must not confuse them with the law. Ethics are what is morally right, an unwritten law, which are manifested in an individual. Law on the other hand is something which is legally right and wrong, dealing with completely different issues to that of ethics.  Consequently, we can come to the conclusions that business ethics are ‘moral guidelines that govern a person’s behaviour in the environment of a business community’. We must note here, that it is not just commercial activity where business ethics influence decisions; it is other companies that don’t necessarily generate profit such as non-governmental organisations as well.

        Looking into this more specifically, business ethics includes the moralities and duties between a company and its employees, suppliers, customers and shareholders. In principle, it is a responsibility to consider certain controversies that will affect anyone whom their business comes into contact with. However, ethics can become a very subjective topic as what is ‘right’ and ‘wrong’ ethically can change depending on the month, year, the stock market, the seasons and many more variables. This is where defining and deciding what is ethical becomes very difficult, as the difference between something ethical and something unethical can simply be due to the time or place where that decision was made. We could look at the recent situation with UBS as an example.  There are speculations that Kweku Adoboli may have been caught out, unexpectantly, by the Swiss Bank who devalued the franc the week before Kweku lost the bank £1.4 billion. If this hadn’t happened, it is possible the losses could have been considerably less, and perhaps, considered as being less unethical.  However, Kweku had been losing money in the weeks prior to this so we must consider all factors of the story before we lay the ethical blame.

        Business ethics often deal with ethical principles and moral problems which arise in a business environment and are too controversial for society to agree on. An example of this which is, more and more, becoming an important topic is that of the pharmaceutical industry. The question often arises, whether patients with life threatening illnesses, such as cancer, which we can see in the first case study, should have to pay extortionate prices for treatment, and what happens in the cases where patients cannot afford it? However this can become very complex as companies such as GlaxoSmithKline are a business and therefore do need to make profit. However simultaneously it is a business which plays very closely to the emotions and lives of the public, an issue which will be discussed later on in the essay. This is an example where companies must heavily consider their customers and one where ethics plays a huge role in the decisions made by pharmaceutical companies. (2)  It is, after all, the customer who keeps the companies in business. Not only this but the customers the people who push the company to keep quality control as they are the basis of service provision, encouraging the business to improve.