Ethical Issues In Business Functional Areas that relevant to business springs in various dimension. In business, we have a number of categories of participants and functional areas that are relevant to them, which include owners, employees, customers, management, marketing and sales, accounting and finance, and public relations.
Each of these category of participants and functional areas have some ethical issues peculiar to them. That is what we intend to discuss in this page.
What Is Business Ethics?
Business ethics, also called corporate ethics, is a form of applied ethics or professional ethics that examines the ethical and moral principles and problems that arise in a business environment.
It can also be defined as the written and unwritten codes of principles and values, determined by an organization’s culture, that govern decisions and actions within that organization.
It applies to all aspects of business conduct on behalf of both individuals and the entire company. In the most basic terms, a definition for business ethics boils down to knowing the difference between right and wrong and choosing to do what is right.
Ethical Issues In Business Functional Areas:
Ethical issues, generally speaking, border on the issues of honesty and fairness, communication and relationships within a business or between it and stakeholders. Here we devoted some attention to some of the category of participants and ethical issues in business functional areas that are relevant to business.
1. Ethical Issues In Finance
Owners of business have the responsibility to provide the finance required for the operations of business. This sometimes necessitate that owners of business borrow from available sources such as friends associates or financial institutions. They may also decide to take on additional owners or stockholders in order to expand a business’s capital base. How finance is raised to fund a business can generate ethical and legal issues. Ethical issues could also be generated from how a business reports its financial position to its stakeholders. These include current and potential investors, government agencies and other interested member of the public.
2. Ethical Issues Among Employees
Employees in a business often need to make decisions and even carry out tasks they consider to be unethical on the ground that they conflict with their personal moral standpoint even though they may enhance profit.
For instance, many employees in tobacco and alcohol manufacturing companies believe that the products of the business entities they work for are ethically questionable because of their harmful effects.
They however continue to work in such places either because there are no available alternatives or because the jobs are well paying.
3. Ethical Issues Among Owners
Virtually all businesses start with the vision of an individual or group of owners who pool their resources together to provide some good or service. These owners may also be the managers of the business or may decide to employ professionals for this purpose.
It contemporary society, it is essential for business owners to understand the ethical issues that are relevant to their business. A neglect or ignorance of such ethical issues may result in business losses or outright failure of the business.
These issues may include those pertaining to workers remuneration, work conditions, quality of products, impact of their activities on the environment and pricing.
4. Ethical Issues In Management
Business managers have both an ethical and a legal responsibility to manage business in the best interest of the owners of business. These responsibilities may sometimes conflict with the personal interests and objectives of the managers in terms of security of jobs or remuneration.
It is also possible for there to be reasons to call into question the loyalty of managers to the organization for which they are working given the understanding that the primary objective of management is to facilitate the attainment of a company’s objective through effective organisation, direction, planning and controlling of the activities of employees.
In performing its statutory roles in a business organisation, management should pay attention to ethical issues that relate to employee discipline, health and safety, and code of ethics among others in the work place.
5. Consumers
No business entity can survive without the patronage of customers. As such, a major goal of business is to satisfy its customers.
This requires that business finds out what customers want and need, both in the short and long term, create the necessary goods or services and make them accessible to them.
6. Ethical Issues In Marketing
All marketing activities focus on customers, potential and actual, and more specifically, how to satisfy them. They involve bringing to the awareness of customers their need for given products and also making these products accessible to them.
Marketers begin with the conduct of research to gather information about what consumers want, then they arrange for the development/ manufacture of such products, price the products, promote and distribute them to where consumers want to buy them.
Ethical issues often arise over product safety, pricing of products, and the appropriateness of distribution channels.
7. Ethical Issues In Accounting
Accountants in recent times are under increasing pressure in terms of time, fees, and financial advice from clients, and also increased competition from professional colleagues.
They are also always under pressure to follow rules and interpret data correctly. These require that accountants follow the prescription of their profession’ code of ethics, which largely defines their responsibilities to their clients and the general public.
This code also defines the legitimate scope of an accountant’s activities and the nature of services he or she can morally provide.
