Introduction
Businesses in the past did not face harsh consequences for their bad reputation since unethical issues could not be shared as far or as much as needed. Nowadays, social media enables many people from different regions and places to acquire information about the ethical culture of a particular company. This can help in recruiting the top talents in the marketplace or chasing them away. Ethics also influence how employees view the company they are working for and, thus, their motivation and productivity. This paper looks at the concept of ethical culture and its effect on an organization, the benefits of business ethics and social responsibility, and an example of a case regarding ethics.
Ethical Culture and Effect on Organizations
Ethical culture refers to a collection of assumptions, experiences, and employees and managers about how the firm prevents them from acting deceitfully and empowers them to act morally. In an organization, it teaches every employee whether acting in the right way matters or not (Suh, Shim & Button, 2018). It ensures that individuals understand that they are expected to do the right thing. It includes formal ethics program elements, punishment systems, rewards, and organizational myths.
An organization with a great ethical culture projects a good image to the public. A good reputation is important in business as it ensures that one’s audience or market feels safe trading with a firm (Suh et al., 2018). In the social media era, people are in now; it is easy for people to quit purchasing products from a certain company because the company may be mistreating its employees or engaging in other unethical issues. For instance, companies that are discriminative against female employees or people of minority groups have been canceled from Twitter and other social media platforms.
Currently, many Americans are discouraged from consuming products from Asian companies that allegedly use forced labor. In this era, it is easier to transmit information from one place to another regardless of distance because of the internet. People in Australia can learn about an American company whose products they have been consuming. An ethical culture can also work in favor of a business (Suh et al., 2018). For instance, the top talent in the job market always desires to work in environments that are conducive to their growth
Such surroundings ensure growth because it is easy for ideas from employees to be turned into reality since managers do not discriminate against them. As individuals interact on social media, especially those looking for places to work, they study the organizations and share any information they find about the firms’ culture. Similarly, how an organization can be canceled on social media can also gain a good reputation as people share information about its great ethical culture.
Primary Benefits of Business Ethics
Employees who are not registered to any workers’ union view stronger ethical cultures within their firms than those in the unions. It is reported that young employees are more likely to view weak ethical cultures within their firms than older employees (Suh et al., 2018). A manager also tends to value a stronger ethical culture than an employee in a non-management position. It is the manager’s responsibility to incorporate and manage a strong ethical culture within a business. Workplace and business ethics are important to a business and offer benefits, including asset protection, productivity, teamwork, public image, and decision-making.
A strong ethical culture is important in a business as it guarantees the security of one’s assets. An employee who adheres to workplace ethics would be to protect and respect a business’s assets. For instance, they would avoid making individual long-distance calls utilizing business lines, showing respect to the particular organization (Sroka & Szántó, 2018). This is only possible when the employees are treated with dignity and respect, as this makes them feel proud to be part of the organization. Employees in such an environment perform with strong ethics and integrity, which ensures high productivity.
Ethical conduct in a work environment empowers a culture to reach decisions dictated by ethics. It enhances transparency and accountability as well when undertaking all business judgments. During tough times, strong ethical cultures within organizations guide them in managing conflicts by moving in the right direction. Ethical conduct enables managers to introduce certain changes successfully in an organization which can be difficult. Within a business, it sensitizes an employer and their employees on how to behave consistently, even during turbulent times.
Relationship between Ethics and Social Responsibility
The concept of social responsibility is based on a system of ethics whereby actions and decisions must be validated ethically before proceeding. If a decision or action harms the environment or society, then it is considered socially irresponsible (Sroka & Szántó, 2018). There are four levels of social responsibility: economic, ethical, legal, and philanthropic. Without earning profits, a company would fail to pay its employees. Being in a state where a firm earns profits is the lone way for it to survive for a long time and positively impact society (Sroka & Szántó, 2018). Moreover, this means that it is an organization’s responsibility to produce products and services that consumers need at an affordable price.
Legal responsibility shows how a company conducts its business in the marketplace. Competition with other brands, employment laws, employees’ health and safety, and tax regulations include legal responsibilities a company is expected to accomplish. Apart from adhering to laws, an organization is expected to be philanthropic (Sroka & Szántó, 2018). This helps in counterbalancing some of the negatives organizations are blamed for, for example, pollution. Additionally, people in the surroundings offer labor and raw materials, and thus, it is fair for organizations to give back to society.
Role of Ethics in Business
Some business people and scholars claim that ethics should not play a role in business. The main reason behind their position is that they feel like the products and services a company produces and their quality should matter more to the consumer than the business’ ethical culture. However, this doesn’t seem right, and that is why many businesses fail. A brand should maintain a good image as people want to associate with those they can trust. If investors and stakeholders cannot trust a firm, then it isn’t easy to conduct business with them.
Bribery Act in the United Kingdom
The United Kingdom has the Bribery Act 2010, which covers criminal law associated with bribery. Countries all over the world aim to provide an equal playfield for all companies in the marketplace. Allowing a few of them to hurt others by participating in bribery activities to gain an edge over others is not right. The United Kingdom, through the Act, ensures that all players in the marketplace are equal and compete in fairness. Therefore, the Act does not put any company at a competitive disadvantage. There is a case that involves bribery whereby someone named Raul was harassed to get approval for permits within a reasonable amount of time or lose his job (Ferrell, Fraedrich & Ferrell, 2019). Raul then bribed another individual named Pedro to get the permits to be approved (Ferrell et al., 2019). Some people study this case and claim Raul is innocent because even the idea of offering money for bribery was Pedro’s idea. However, because he accepted to be part of the criminal Act, he is also liable to punishment according to the law, and thus, he was not right.
The Volkswagen Scandal
A study conducted by CARB aimed to identify the emissions discrepancies between the United States and European models. Car makers need to ensure that they monitor and reduce the amount of air pollution caused by the vehicles they produce (Jung & Sharon, 2019). Volkswagen Company did not adhere to this and thus tried to cheat on the tests done on the vehicles by using defeat devices to pass the United States tests. Additionally, the company also failed to adhere to legal responsibility as it tried to bribe its way out of a case. This company did not have a strong ethical culture which is clear from a report that claims that it has been emitting huge amounts of NO x (Jung & Sharon, 2019). The company valued the profits it earned from the sale of its cars and ignored the conditions of the environment. Companies that have been involved in such a scandal can recover by participating in causes that aim to support environmental conservation. This will allow the public and authorities to view the firm from a positive perspective.
Conclusion
The paper has explained what ethical culture means and how it affects organizations. Many companies that fail to act ethically ruin their image and can also get in trouble with law enforcement for various acts such as excessive pollution. As much as businesses should target to earn profits, they should aim to remember that they have a social responsibility. This means that their actions can impact society and, thus, need to ensure that they positively impact people around them.
References
Ferrell, O.C., Fraedrich, J., & Ferrell, L. (2019). Business ethics: Ethical decision making and cases (12th ed.). Cengage Learning.
Jung, J. C., & Sharon, E. (2019). The Volkswagen emissions scandal and its aftermath. Global Business and Organizational Excellence, 38(4), 6–15. Web.
Sroka, W., & Szántó, R. (2018). Corporate social responsibility and business ethics in controversial sectors: Analysis of research results. Journal of Entrepreneurship, Management and Innovation, 14(3), 111-126. Web.
Suh, J. B., Shim, H. S., & Button, M. (2018). Exploring the impact of organizational investment on occupational fraud: Mediating effects of ethical culture and monitoring control. International Journal of Law, Crime and Justice, 53, 46-55. Web.