Ethical Issues

Ethics is the study of morals and systems of morality, or princiles of conduct. The
study of ethics is concerned with the right or wrong and the shoulds and should nots of
human decisions and actions, but we must make the difference between all questions of
right and wrong that are or are not ethical issues.
The ethical, or moral, frame of reference is concerned with human behavior in
society and with the relationship, duties and obligations between people, groups, and
organizations. It is concerned with human consequences associated with decisions and
actions. An ethical perspective requires that you extend consideration beyond your own
self-interest (or that of your company) to consider the interests of a wider community of
people, including employees, customers, suppliers, the general public or even foreign
governments.
The separation of strategic or operating decisions and ethical decisions is artificial
because problems in the reals world do not come with neat labels attached: here is a
finance problem; here is a marketing problem; and now, an ethical problem. Managers
may categorize the issues by functional area or break up a complex problem into
components such as those mentioned. Usually policy issues and decisions are
multifaceted and simultaneously may have financial, marketing and production
components.
The decision-making tools for this type of situation probably would be missing.
Business schools, traditionnally, have not emphasized the teaching of ethics as rigorously
as they have the teaching of finance or marketing for example. Business students and
managers generally have not been trained to think about ethical issues as they have been
trained in the frameworks and techniques for functional areas of specialization.
Some examples of ethical issues may be present in many areas of operations: the
type of products produces; marketing and advertising practices; business conduct in
countries where physical security is a consideration; hiring and promotion practices in
countries where discrimination and racism exist; requests for payments to secure
contracts or sales; and payments to prevent damage to plants and equipment or injury to
employees. Such an example may be the one of the US government who tries to open up
markets in Southeast Asia for cigarette manufacturers. Should US promote the cigarette
markets in other countries if they spend money to combat smoking in their own country?
One side argues that US is exporting death and disease to the developing world and the
other side counters that cigarettes are manufactured and sold in countries such as
Thailand. But what about the Us governments attempt to try to change Thai laws that
restrict or ban cigarette advertising? Is this acceptable or is it going too far?
One of the first things managers often do when they encounter an ethical problem
is avoid it through the proces of rationalization. They may focus on some other aspect of
the problem. They may transform the ethical problem into some other type of problem- a
legal or accounting problem, for instance.

Compliance with laws and professional regulations is probably a minimum

requirement for responsible managers.
Another kind of avoidance behavior is to see the problem as only one small piece
of a larger puzzle and to assume that someone higher up in the organization must be
looking after any unusual aspects, such as ethical considerations.
Rationalizing ones behavior by transforming an ethical problem into another type
of problem, or assuming responsibility for only one specific, technical component of the
issue, or claiming it is someone elses problem gives one the feeling of being absolved
from culpability by putting the burden of responsibility elsewhere.
Who is responsible for ensuring ethical behavior? Corporations have a
responsibility to make it clear to their employees what sort of behavoir is expected. This
means that executives in headquarters have a responsibility, not just for their own
behavior, but also for providing guidance to subordinates. A number of companies Have
corporate codes to do just this.
The question always arises as to the distinction between legal and ethical
behavior. The fact is that not all laws are moral. Henderson has provided a useful way to
think about the relationship between ethical and legal behavior. There are a number of 4
ways: ethical and legal, legal but unethical, ethical but illegal, illegal and unethical.