Name
Capella University
PHI FPX 2000
Prof. Name
November, 2024
Business Ethics and Corporate Responsibility
Organizational ethics and corporate governing refer to the process of doing business with the standards of morality, and integrity, as well as holding accountability. Ethical considerations help to minimize bias, proper disclosure of information, and respect for the customer, employee, and the community (Daza et al., 2022). Corporation that has responsibility is not limited to making profits into some social and environmental issues apart from the economic for proper and responsible development. Of the organizations encouraging ethical practices, many ensure that they have economic policies to hire workers fairly, ensure environmental conservation, and donate to charitable causes. Over the long run, this enhances the credibility of stakeholders, makes relationships better, and brand building is also more effective in the process (Kasradze et al., 2023). Another form of corporate governance advances corporate responsibility whereby organizations are urged to fairly evaluate all operations, actions, and decisions for success, sustainability, and general performance with a view of minimizing harm to the entire business environment and its sustainability.
Ethical Issues and Their Relationships
They come up any time people or organizations find themselves in circumstances that present them with what can be described as samples of their ethical stocks in trade. Such issues are commonly concerned with issues to do with conflict of interest, doubts about fairness, issues of legal compliance and ethical standards, between legal and moral quandaries (Paruzel et al., 2021). The following are some examples: Truthfulness and discretion, integrity, and civility. Usurp ethical questions are not sophisticated in a way that for example, profit may have to be traded off against the environment or that sometimes the value of being transparent may have to be traded off against the value of being secretive, but they are important because they make a person to think out a set of values to be followed and to make a person to do right regardless of whether the right thing is easy to do or not.
The problems are interrelated since one situation in one area can be influenced by the presence of the problems in another. These include cost savings by firms and other various ethical issues concerning employees, the environment, and customers. Solutions to these involve reflecting on their consequences to arrive at the right measures that will maintain an ethical stand (Podgorica et al., 2021). Organizational moral choice cannot be an individuality of decisions from some individuals or an organization; decisions by an organization should result in creating policies and actions that are ethical. That is when individuals and firms will find that ethical issues are connected and can find ways and means to solve the problems with ethical fairness and respect with social responsibility.
Stakeholders’ Primary Interests
There are various aspects of an organization and all these aspects have different interests but are primarily centered on such expectations and the organization dealing with them. Specific stakeholders are mainly interested in profitability factors and return on investment. From the results, it can also be inferred that employees have concerns for their employment security, wages and receivables, and organizational climate (de Jongh et al., 2022). The low-level customer interests would be the usability of products or services, cost, and ethical standards. Stakeholders want to know about the corporate social responsibility and the environmental management of the organization alongside its development impact on the community. Suppliers desire stable relationships and reasonable contractual terms, at the same time regulators demand that all requirements of the law and standards are met. For trust, the appreciation of these multiple interests is imperative to partnership, friendly relationships, and sustainable organizational performance. As the fact that establishing an objective of harmonizing business goals with stakeholders’ concerns would create an equally constructive foundation for proportional development with benefits in return, such an objective can be attained by companies.
Normative Ethical Theory
Normative ethical theory deals with the proclamation of rules or principles that people and organizations should follow as far as distinguishing between right and wrong is concerned. It enables evaluation of activity about its ethical merit and using this process opens up the path for systematic procedure regarding decisions (Khatri et al., 2023). There are three major branches of normative ethical theories: These categories include; consequentialism, deontology, and virtue ethics. Consequentialism focuses more on the consequence arising from an action which may be good or bad. Ethics is a way of defining the welfare of the majority in a society. Deontology is oriented on duties and rules claiming that some actions are moral no matter the outcome is bad. While applying virtue ethics, special attention is paid to the moral character of the actor and the individual and/or corporate moral character of ethical moral character, moral character, and ethical excellence.
Milton Friedman’s Stakeholder’s Theory
Milton Friedman’s stakeholder theory implies the key proposition that a corporation has the legal responsibility of the shareholder because the task of the business is to narrow down its mission to the generation of profits with the maximum allowable and acceptable level of the ethical perspective (Khatri et al., 2023). The theory goes with the notion that what generates efficiency is wealth generation for shareholders, while other parties benefit from employment provision, invention, and wealth generation in an inferior way. According to Friedman, what goes beyond this damages corporate resources and jeopardizes the very mandate of the firm. At the same time, he stayed faithful to the concept of the corporation being socially responsible following the law, and being honest when making money.
Traditional Theory of Normative Ethics
Normative ethics has always been traditionally categorized into three important forms. The three are consequentialism, deontology, and virtue ethics. In teleological approaches where the important one is utilitarianism, what is right or wrong depends on the consequences (Khatri et al., 2023). The end goal is to get to the optimal state of affairs for the pursuit of happiness or subjective well-being if you like. On the other hand, we have deontologists for example Immanuel Kant stresses the uniqueness and importance of duties and principles believing that some actions are right or wrong for their own sake. The virtue ethics has its origin in the Aristotelian ethic in which one is expected to build moral character and virtues such as courage, honesty, and compassion as the fundamental foundation of ethical decisions. That, plus the other theories, provides procedural frameworks for addressing moral issues and ethical decision-making with each emphasis directed towards different aspects of morality, that is, the end, the means, or the person.
Deficiencies of Milton Friedman’s Shareholder Theory
Milton Friedman’s assessment of the duties of managers to shareholders is very popular but partly mistaken for several reasons. Another serious criticism leveled at this theory is that too much of the theory leads a firm to pursue very short-run profit maximization causing the firm to abandon the long-run survival possibility of the firm or even the public good (Polman & Ruttan, 2022). It is therefore not very friendly to the other major stakeholders such as the employees, and customers, and by extension damages trust, and reputation. Besides there are significant problems in the world like environmental pollution, and social injustice to which businesses might be forced to respond beyond the profit motive. The theory further assumes that market rationality and legal systems would act to make ethical action predictable, where necessary, to do so, for where they did might not afford adequate protection against detrimental corporate actions.
PHI FPX 2000 Assessment 2 Conclusion
In conclusion, business ethics and corporate social responsibility (CSR) are the cornerstone of long-term success that helps to act responsibly with a sense of conscience towards society and the surrounding world (Podgorica et al., 2023). All three normative ethical theories in consequentialism, deontology, and virtue approaches give proper laid-down codes of working in scenarios of dilemma in moral choices. Another stakeholder theory was formulated Milton Friedman shapes corporate responsibility for the maximum accumulation of profit, but the lack of consideration of other stakeholders and social problems.
PHI FPX 2000 Assessment 2 References
Daza, M. T., & Ilozumba, U. J. (2022). A survey of AI ethics in business literature: Maps and trends between 2000 and 2021. Frontiers in Psychology, 13, 1042661. https://doi.org/10.3389/fpsyg.2022.1042661
de Jongh, D., Massey, E. K., VANGUARD consortium, & Bunnik, E. M. (2022). Organoids: a systematic review of ethical issues. Stem cell research & therapy, 13(1), 337. https://doi.org/10.1186/s13287-022-02950-9
Khatri, R., Endalamaw, A., Erku, D., Wolka, E., Nigatu, F., Zewdie, A., & Assefa, Y. (2023). Continuity and care coordination of primary health care: a scoping review. BMC Health Services Research, 23(1), 750. https://doi.org/10.1186/s12913-023-09718-8
Khatri, R. B., Wolka, E., Nigatu, F., Zewdie, A., Erku, D., Endalamaw, A., & Assefa, Y. (2023). People-centered primary health care: a scoping review. BMC Primary Care, 24(1), 236. https://doi.org/10.1186/s12875-023-02194-3
Kasradze, M., Streimikiene, D., & Lauzadyte-Tutliene, A. (2023). Measuring the impact of corporate social responsibility in the energy sector. Environmental Science and Pollution Research International, 30(51), 109973–110009. https://doi.org/10.1007/s11356-023-30131-5
Paruzel, A., Klug, H. J. P., & Maier, G. W. (2021). The Relationship Between Perceived Corporate Social Responsibility and Employee-Related Outcomes: A Meta-Analysis. Frontiers in Psychology, 12, 607108. https://doi.org/10.3389/fpsyg.2021.607108
Podgorica, N., Flatscher-Thöni, M., Deufert, D., Siebert, U., & Ganner, M. (2021). A systematic review of ethical and legal issues in elder care. Nursing Ethics, 28(6), 895–910. https://doi.org/10.1177/0969733020921488
Polman, E., & Ruttan, R. L. (2022). Making utilitarian choices but giving deontological advice. Journal of Experimental Psychology. General, 151(10), 2614–2621. https://doi.org/10.1037/xge0001194
