Business Ethics Summary

Ethics is one of the oldest disciplines, the object of study of which is morality. The term ethics was introduced by Aristotle, who thoughtfully remarked that ethics “helps to know what to do and what should be avoided”.

Modern ethics is first and foremost, the science that allows to consider human relationships, as well as to evaluate the behavior of people in terms of generally accepted norms. There are professional ethics, which includes a system of moral norms of human behavior, belonging to a particular social group. An entrepreneur should not only know the ethical behavior standards, but also to follow them.

There are so-called professional ethics, and in particular – business ethics, which includes standards of entrepreneur behavior. Entrepreneurial activity is impossible without the numerous contacts with people; it is not designed to work alone.

What is the difference between business etiquette and business ethics? Business ethics is primarily a negotiation with partners; ethics recordkeeping; use ethical methods of competition. Business ethics considered to be the same for businessmen from different countries. Business etiquette – are certain rules governing the work style, manner of communication between firms, the appearance of businessmen, sequence and manner of negotiating and so on.

Business etiquette is formed under the influence of certain traditions and the prevailing historical conditions of the country. Therefore, those entrepreneurs who cooperate with foreign partners, is very useful to have a national business etiquette cooperating party prior to the joint activity.

The issues of business social responsibility, ethics, and environmental protection are on the agenda of modern companies.Social responsibility of business ethics and environmental protection are equally important and urgent tasks of modern business than the financial performance of the organization or the pay of top managers, because the issues of corporate responsibility are able to provide the same impact on business reputation and business value, as well as standard indicators of economic growth.

“Social responsibility is a voluntary effort on the part of business to take various steps to satisfy the expectation of different interest group… the interest group may be owners, investors, employees, consumers, government, society or community. ” (, 05.21.2009)

In our days environmental protection, for some business industries as automotive industry, drives to new technology and innovation. And this is true even for General Motors Company. “As an automotive manufacturer, environmental responsibility is a key issue for GM. It is playing an active role in the development of hydrogen fuel-cell powered vehicles that emit only clean water and offer twice the energy efficiency of traditional engines.” (Alex Blyth, 11.05.2003)

Without being perceived as a sign of economic strength, social responsibility has today the form of corporate civic – a way to create stable and profitable business relationship for all parties, a non-aggressive way, less harmful to work around the community, a friendly way of communication with society. In this form, social responsibility is nothing but a modern and open way of flexible management. Practices and social responsibility programs are more accessible and more interesting for small business enterprises.

Questions emanate as to the ethical considerations of the professional’s liability and how power and dominance should be utilized in service to the society and customer. Most professions have internally implemented principles of practice that associates of the profession must abide by, to forbid exploitation of the customer and uphold the wholeness of the profession. This is not only to the advantage of the client but to the advantage of those belonging to the profession. For instance, an American business may ask an engineer to manifest the safety of a project which is not safe. While one engineer may deny manifesting in the project on moral basis, the business may find a less painstaking engineer who will be ready to manifest in the project for a payoff, thus saving the business the cost of restyling. Disciplinary principles permit the profession to formulate a standard of behavior and assure that one meets this standard, by checking them from the professional body if they do not practice consequently. This permits those professionals who act with moral sense to practice in the cognition that they will not be counteracted commercially. by those who have less ethical qualms. It also maintains the public’s trust in the profession, meaning that the public will continue to seek their services.

One can show integrity in every step of professional life, and that comprises the truthfulness of statements in one’s curriculum vitae. It is common cognition that many people amplify their skills or experience when searching for jobs. They may over-accentuate their role in projects, their participation in certain industries or areas, or their acquaintance with various Information Technology packages. The interviewers can easily catch this foolishness, and thus one will have to face failure at the very beginning by not getting selected for the particular job. Potency-based interviewing is grounded on the premise that past performance is a good revealer of possible future performance. It uses elaborate questions about what one has done to inculcate one’s your past behaviors. Thus, starting with one’s resume, one can demonstrate his/her ethical values in the professional arena. In the professional arena, a person should not adopt unethical methods, such as accepting bribes, trying to hurt the sentiments of associates or not showing respect to the sub-ordinates.

Everyone has an ethical ambit. As a professional, one needs to make sure that one has a firm cornerstone. If one can meet the moral standards as expected of him/her, one is potent to encourage and urge on others and attain career honors and rewards.

Ethical Reasoning

Ethics play a major role in our lives. The decisions we make have an effect on the type of people we are. So, what are ethics? Are they the same for everyone? No, they can’t be. The dictionary defines ethics as a set of moral principles. Because every person perceives a situation differently, something that is ethical to one person may not be to another. For example, I had a friend who was caught stealing money from the cash register at work. When she was confronted by our manager, she lied about the whole thing. She was eventually fired but she believed she had strong reasoning for stealing the money. There are six different ethical viewpoints; experientialist, systemicist, transcendentalist, conventionalist, individualist, and legitimist. Each viewpoint would analyze this situation differently. I’m going to apply these viewpoints to the situation mentioned above and analyze how each style would respond to the stealing of the money.

The first viewpoint is experientialist. Experientialists are people who base their decisions on emotions. This person would go with their “gut feeling”. In the example above, it is most likely a person with the experientialist viewpoint would say that it is unethical to steal money and lie about it. Their decision would affect them emotionally, so it would weigh heavy on them to judge this situation without knowing all the facts. If they know stealing is wrong, then they would call this unethical behavior. The next viewpoint, systemicist, has similar characteristics.

The manager of the store in the example above would most likely have a systemicist viewpoint. Systemicist’s like to base decisions on what is right for everyone involved. In other words, if it is mostly good, then it is ethical. But, if it is bad, then it is deemed unethical. Stealing from the store would automatically be viewed as unethical because the manager’s business is going to suffer the consequences.

The third viewpoint is transcendentalists. Transcendentalists based decisions on an obligation to respond to a deep inner sense of what is right, good, internal, and divine. Basically, their decisions are religiously based. In the situation presented, a transcendentalist would be very clear stance that stealing is bad. No matter what the reason was for stealing the money, transcendentalists would still consider it wrong and unethical. The next viewpoint is differs immensely from this one.

Unlike the transcendentalist, conventionalists base their decisions on whether or not other people believe to be right or wrong. In other words, if everyone else thinks it is okay, then it must be ethical. The downfall to this focus is that there isn’t a clear viewpoint. In contrast to the transcendentalist, what is wrong is wrong and vice versa. However, with this, one may believe something is unethical at first, but after hearing the thoughts of others, they may deem in appropriate. The transcendentalist follows by example which is set by society. Therefore society will dictate what action is or should be taken in any situation.

The fifth decision style is that of the individualist. This style differs from all the rest in that the views are based to ensure one’s own security and interests. Individualists think of the “what will benefit me” attitude. Looking back on the example, the girl has her own reasons for stealing the money. However, the manager has the future of his business to worry about. Each of them has their own interests in mind and the interests of others second. The next and final decision style, the legitimist, varies a lot from the other styles.

The legitimist has a clear cut view on ethical decisions. This person believes in policies and rules and that those rules were set to be followed. Following the rules would be ethical to a legitimist because they believe rules are set for the betterment of society. Looking back at the example, the worker would not have stolen the money if she were a legitimist. Also, the manager followed the legitimists’ views when he fires her for stealing.

Although each decision style has their own characteristics, many of them are similar. Because of this, I think most people make their decisions with mixed views. That is, certain information may sway the views of some people For example; the manager of the store in the example may be a legitimist because he has to be in accordance with the store’s laws. However, if the reason for stealing the money was to buy food for her starving kids, the manager may feel sorry for her and look over it. In that case his emotions would trigger the experientialist decision style.

There are many things that affect what decision styles we use. How we were brought up is probably the most influential. However, as we grow, those views may change. For example, when I was younger, stealing didn’t seem to be a big deal as long as you had a reason to do it. Now that I have worked as a manger I believe that stealing is stealing and there is no excuse for it. My views have obviously changed from my experience and I believe the views of others may change as they experience new things too.

My friend who stole the money told me she needed it to buy gas to make it home. After hearing this, my opinion on the situation changed. I felt bad that she didn’t have enough money to make it home. Given this information, I believe that most of the viewpoints listed above would change their opinion slightly, unless you were the legitimist because they believe right is right and wrong is wrong, period.

So, what is ethical? According the six different viewpoints; experientialist, systemicist, transcendentalist, conventionalist, individualist, and legitimist there are many ways to define ethical. Until the day comes where every person on earth shares the same view, the definition of ‘ethical’ will vary from person to person.

Corporate Governance – Where Did it Go?

“An internal system encompassing policies, processes and people, which serves the needs of shareholders and other stakeholders, by directing and controlling management activities with good business savvy, objectivity, accountability and integrity,” is the way Gabrielle O’Donovan defines corporate governance in, “A Board Culture of Corporate Governance.” “Corporate governance is most often viewed as both the structure and the relationships which determine corporate direction and performance,” according to As you can see, delineating the phenomenon of corporate governance can be an obstacle in it of itself; now just imagine trying to instill a corporate governance policy within a company.

It is possible that the lack of a one unambiguous characterization of corporate governance is the foundation from which fraud has grown from over the past few decades; however, it is truly unlikely. Going back to the end of O’Donovan’s definition of corporate governance, the real growth place of fraud is a lack of objectivity, accountability and integrity within corporations. Corporate governance follows a hierarchical outline, with the Board of Directors at the top, then senior management, followed by internal auditors and finally external entities (Lawrence, Weber, Business and Society 12th Ed.). An organization’s corporate governance policy can only be as strong as its weakest practitioner, and the weakest practitioner can reside in any level of the hierarchy. How and/or why does a corporation’s governance policy fail?

First look at the top, the Board of Directors level. The board is responsible with creating the company’s corporate governance policy, therefore they have no excuse as to why they wouldn’t know or follow the policies. This doesn’t imply that fraud doesn’t exist at the top level in anyway. Members of the Board of Directors of a company take-part in fraudulent activities for numerous reasons. First off, members of the board are voted on, and no qualifications exist. Anyone can be voted into a position of great power within an organization; so in reality, someone unfamiliar with business practices could easily take part in fraudulent activities and not even be aware of it. Another reason deceit is found with the Board of Directors is due to conflicts of interest. Board members, since anyone can be voted in, are sometimes on other company’s Board of Directors, or are sometimes the company’s senior management (Lawrence, Weber, Business and Society 12th Ed.). An example of a conflict of interest for a person who is part of senior management and on the board could be making a business decision that raises the company’s stock price, as the CEO this person is awarded stock options as part of their pay, while that decision did not fit in with the corporation’s governance policy. The person’s lack of integrity allowed them to make an immoral decision to create wealth for him or herself.

Senior management is often to blame as well. A lot can lead a top manager within a company to breaking from the corporate governance policy. Career concerns or pride can foster decisions that a person, under normal conditions, wouldn’t make. For instance, if a manager is given a quota he or she has to reach in a certain time period, the pressure they feel to succeed may allow them to make an unethical decision. If they are under the belief that not reaching that quota is going to cost them their job, anything in the realm of possibilities to keep their job may be done. Another reason top management may look the other way when they know something that the CEO is doing is wrong is because they feel a deep loyalty to them. In the late 1960s, upper-management at Quasar Stellar Company knowingly allowed falsified records to be sent to the parent company, Universal Nucleonics Company, as directed by the CEO. When interviewed, Peter Loomis VP of Marketing said “I always felt that I owe more loyalty to my supervisor that to the company” (Fendrock, “A Crisis in Conscience at Quasar”).

The issue with internal auditors is pretty simple to understand. The people you constantly work with naturally become your friends. An internal auditor reports to the Board of Directors, people whom they rarely see, about the work of the senior management, the people that they work with day in and day out. Thus, a conflict of interest arises – does the internal auditor want to report to the board that management has falsified the reports and risk losing their friend, or do they want to let management get away with what they are doing and inform the board that all is well to keep their friends? It’s a tight line to walk, and sometimes corporate governance takes a backseat to friendship.

External entities, public accountants for example, also have an interest in fraudulent activities within a company. When public accountants audited a company in the past, they often did it for multiple years straight and a relationship formed between the company and public accountant. The relationship could grow, and in addition to auditing the company, the accountant would provide consulting services. The consulting services provided were much more lucrative than the auditing services, so naturally one would one to keep the company as a client for consulting. A conflict of interest presents itself because of this point; if the public accountant finds that the company is falsifying records, the company can threaten to revoke its desire for the consulting services from the accountant if the accountant reports them.

The Sarbanes-Oxley Act of 2002 aimed to prevent this from happening, by including a provision which states that no auditor can also provide consulting services to the corporation in which they are auditing. The act also aimed at placing more blame on senior management with a provision that requires the CEO and CFO to sign off on the authenticity of financial statements. Sarbanes-Oxley also now requires at least one member of the Board of Directors audit committee to be a financial expert. Although the Sarbanes-Oxley Act has improved some of the failures in corporate governance, many complain about its costliness. And as it is easily observed over the past few years, not all failures can be prevented. Businesses need to construct better corporate governance models, and individuals need to instill in themselves a stronger sense of accountability and integrity if the business world wants to see the end of fraudulent activities.

Mind Your Business Manners

In business, manners make you money! The concept of etiquette in business is even more important now due to our ever-increasing forms of social media and online platforms. If you are a business owner you always need to remember you are representing your brand no matter where you are or what time of day that it is. As a business owner you have to remember that you are never “really” off the clock.

Having proper business etiquette is something that really takes just a little bit of conscious effort, but it has a big impact on your business. Ever walk out of a mom and pop store feeling elated because the owners took just a little extra time to visit with you, called you by name and remembered some particular facts about you? A polite conversation is such a simple concept but yet can make such an impact on your business.

One simple step to follow is being kind. Like I mentioned above it’s sometimes as small as having a conversation with someone that can make a big impact. I will also tell you that if you make it a habit to be considerate and think of others on a regular basis that it will pay off in spades. And on the other hand if you are not that will go a long way too… Causing you to be remembered in an unflattering light. And remember if you have employees this is big for them as well. Do you think I will ever call the plumbing company whose employee (owner) was in a branded truck and used an inappropriate hand gesture? We’ve all experienced that a time or two.

Another thing that is commonly forgot is the follow up and RSVP. This may sound trivial but it’s one of the most important aspects of etiquette in the business community and one that is seriously forgotten at items. I don’t think it’s intentional that we sometimes forget to follow up or to RSVP. We just live in an extremely busy world where things are happening at lightning speed. Here I advise you to keep a note pad near you at all times to jot down those things you tell others you will do or events you need to put on your calendar and follow up with an RSVP. If you made a promise or were invited to participate in an event and forgot about it all together or to RSVP until the last possible minute that will be remembered long after the promise or the event.

Just as we were taught in grade school, it is important to be on time. Nothing says rude in business as loudly as not being on time for your appointments. It is plain disrespectful because it indicates that you are not appreciative of someone else’s time. If someone has committed to spend time with you, you need to be respectful and make an effort to show up on time. Recently I was at a networking event where someone was late. I could tell from the conversation of the group that this is very typical for this individual to the point that the group was kind of poking fun at him and when he finally walked in someone made a comment about his tardiness. I ask you, do you want to be this guy? His reputation (and not a good one) preceded him. If tardiness is something that you struggle with you should make every effort to improve in this area… for the sake of your business.

Finally, do not forget to express Gratitude. It’s amazing how much a quick verbal thank-you can mean to someone who helped you. We are so busy in our businesses at times that we can accidentally forget to take an extra minute or two to say thanks but these words have such a big impact, making you memorable. One great practice is to sit down at the end of the day and write just one note out to someone that went out of his or her way for you or provided great service. A handwritten note in today’s technological society gets noticed and will sometimes sit around on someone’s desk for a long time, keeping you top of mind.

Benefits of Environmental Monitoring

Environmental monitoring can play a vital scientific role in not only the long term, but also the short term growth of your pharmaceutical business. Through knowledge and understanding you’ll be better equipped to avoid potential environmental violations, potential contamination problems, not to mention offer key ecological management and research. Environmental-monitoring is essential to any pharmaceutical company to determine the correct environmental planning and policy for business. However, the benefits of environmental monitoring are not always clear, and it has been criticized in the past for being too costly, without enough justifiable upside. So is environme
ntal monitoring really vital to the Ecosystem Management of your business?

The answer is yes, and the results speak for themselves. Environmental monitoring is critical in determining the safeness, and cleanliness of certain controlled environments, in the drug making and biotechnology industries. Large pharmaceutical companies often hire outside pharmaceutical consulting firms, who specialize in environmental-monitoring services, to conduct a thorough examination of their premises and all of their manufacturing components. This enables quality assurance that the pharmaceutical company can move ahead unhindered, without any fear of contamination or ecological violations. The pharmaceutical consulting firm will thoroughly inspect the entire manufacturing and production environment, to make sure everything is up to code, and safe, not only for the employees but the consumers as well. Environmental monitoring is vital in guaranteeing the manufacture and control of sterile and non-sterile products within your entire manufacturing area.

Without environmental monitoring, many pharmaceutical companies would not be able to guarantee the safety and optimum efficiency needed in the mass production of pharmaceuticals. Environmental monitoring is also important because it is the fundamental base for science-based initiatives, and adaptive management within a pharmaceutical company. It helps to determine if a certain ecological project is having its intended results, as well as being safe and responsible. By detecting any minor or major problems early enough in the production process, your pharmaceutical company could save possibly millions of dollars in losses, as well as any legal problems that may arise.

For environmental monitoring to be effective for your business, it should be carefully considered against your budget constraints, as well as the size and risk of your project. If your project may be high risk, then having an environmental monitoring firm do a thorough examination may be costly at first, but could save your company millions down the road. Sometimes, without the right monitoring at the very beginning of a project, you could spend years, and large amounts of money on a project that was doomed to fail from the beginning. Environmental-monitoring should be cost effective to your business, and should only be a small portion of the cost of the entire project.

Environmental monitoring can be a very important service in any pharmaceutical process. Any pharmaceutical consultant would agree that it may lead your business to a substantial reduction in the uncertainty that goes along with Ecosystem management, as well as guarantee the safety of possibly thousands of workers and potential customers.

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