Ethics and Governance Essay

With reference to the Oxford English Dictionary (2012), ethics is described as the skill of goods. It is also the agency of study with regards to the values of moral obligations of what is right or wrong. It also covers human behaviour. A federation makes many terminations in a course of ace day. It may include, launching new products, doing public Relations, making sales, rewriting friendship policies and the recruitment or retrenchment of people, just to name a few. exclusively business aims to do so goodly. To conduct business h 1stly, a business must first beam to adhering to laws and regulation (Timms, 2009). These are clearly defined, as they are in black and white. However, once the definition of what is respectable becomes contested, ethical dilemmas pull up stakes arise. An ethical dilemma occurs when in that respect is a situation which all alternate choices and behaviours amaze been deemed undesirable, and that there may be potential ethical consequences wh en one is unable to identify the right from the wrong.An pillow slip of an ethical dilemma is of follows, where one faces a conflict among his ethical code and his business aims. Cadbury, the deep brown producer, was offered a contract by Queen Victoria to send decorative tins of chocolates to e truly single one of her soldiers in the Anglo-Boer war in South Africa (Andrews, 1989). However, since he was against the war, which resulted in him deciding to resolve this conflict by completing the order without profit. According to Sir Adrian Cadbury (1987), his grandfather made no profit out of what he dictum as an unjust war. The additional work public assistanceted his employees, the royal typifys consisting of tins of chocolates were sent to the soldiers, and it was a win-win situation. In a business, there are 3 levels of ethics the ethics of the governing body, workplace ethics and individual ethics (Trevina & Nelson, 2011).A governing body usually is made up of a board of di rectors, whose aim in the company is to make good corporate practices easier and more available for employees. They too must drive and motivate employees to contact for good performance, conformance and results. Workplace ethics are important, as it ensures a conducive and supportive milieu to work in. There must be equal treatment among and within subgroups, open communication between levels, and in formation must be transparent and readily available. Individual ethics is unnatural by cardinal complementary elements. Individuals must be able to identify ethical issues recognise the values and priorities through their covetous of principles, rules, norms and theories developing their individual sets of reasoning and perception and improving the strength of one to act upon such decisions (Trevina & Nelson, 2011). onward a difficult decision is made, the shareholder or the manager has to think a problem though. cardinal way to do so is using Kidders Ethical Checkpoints (2006). H e has 9 checkpoints which he feels leave behind lead to an ethical decision being made. First, the manager needs to recognise that there is a moral issue. later determining the actor, he has to gather the relevant facts. Next, he tests for right-versus-wrong issues as well as paradigms. After applying re beginning principles, he has to look for a third way before making the decision. After the decision is made, he has to revisit and reflect on the decision. After much research, I feel that useful draw close is the most useful in guiding company decisions. I will explain why below. A decision is only ethical, according to the useful principle, if it has the vastest net utility program as compared to any a nonher(prenominal) alternatives.As a decision shaper, he must evaluate and weigh every resource present to him. He must determine if there any positive or negative utilities arising from the option, before selecting the option that has the greatest net utility (Fuitzsche, 2005). It is very similar to the cost-benefit analysis use by stakeholders to consider the cost and benefits of a potential business decision. According to someone applying the utilitarian principle, a decision is only ethical if it has the greatest net utility and benefits the most people. An example of the utilitarian approach is when, during office hours, a company monitors their employees habits like tobacco consumption, as one mans actions can affect the absolute workplace. A prominent example is in Singapore, where there is the Smoking (Prohibition in Certain Places) Act.This act aims to comfort the public from the hazardous effects of second-hand smoke. (Smoking Prohibitions, 2012) By making sure that employees do not smoke rough the office, there would potentially be less health problems, so lesser sick employees which mean ameliorate productiveness and greater yields. There are two types of utilitarianism, act and rule. Act utilitarianism targets problems in the short guide while rule utilitarianism targets problems in the long run. While act utilitarianism looks at the total aftermath of a single act, rule utilitarianism looks at the repercussion over a series of acts (Fuitzsche, 2005). For example, bribing is frowned upon. An example of bribing occurred in NES china in 1998. NESs government affairs co-ordinator proposed giving gifts to government officials to establish a working(a) family relationship to help get its application approved.The other members were horrified, as this was considered bribery and a criminal offence in their country (Joerg & Xin, 2009). Under act utilitarianism, if bribing operator that the company will get the business contract, thus allowing the employees to halt their jobs, it is ethical. However, under rule utilitarianism, this is not the case. Bribing, thou it will work in the short run by generating business, however, in the long run, potential customers will question if you got the job through bribing or bec ause of your superior products you are selling. whence bribing does not provide the greatest utility (Fuitzsche, 2005). However, the utilitarian approach does wee several limitations. Therefore other ethical theories have to be used together with the utilitarian approach in making company decisions. Firstly, there will be some people who will be at a disadvantage. A decision, according to the utilitarian principle, is only ethical if it has the greatest net utility.However, increasing net utility sometimes causes serious issues and affects people negatively. One notable historic example was the construction of the Great fence of China (Construction of the Great Wall of China, 2006). Three hundred thousand prisoners and peasants were reportedly conscripted to help construct the great wall. It is said that for every block laid down, one labourer lost his life. In terms of utilitarianism, a significant positive net utility was nominates, as the great wall restricted the nomads and protected China. The Chinese citizens were safe for many years to come, at the expense of these three hundred thousand prisoners. Secondly, it is challenging estimating the results or effects of a business decision made. Also, a unit of currency gives more benefits to a unequal person than to a rich person (Fuitzsche, 2005). In April 2012, all national servicemen in Singapore arm Forces, Singapore Civil Defence Force and Singapore Police Force received a $60 pay raise (Chua, 2012).A Recruit, who once realize $420, now earns $480, while a Lieutenant, who once earned $1120, now earns $1180. This increment would mean more to a recruit, who had a 12% pay increment, as compared to the Lieutenant, who had a 5% pay increment. It shows that it provides more utility to the poorer recruit. Therefore calculating if a decision maximises utility is difficult. Thirdly, not only are the consequences of a decision made hard to foresee, some decisions have consequences which are not easily or unab le to be measured. In August, Apple manufacturer Foxconn improved on the working condition of its factory in China, such as introducing more breaks, lowering overtime, doubling wages and having interrupt maintenance of safety equipment. (Rushe, 2012) Louis Woo, special assistant to the chief executive of Foxconn also released a statement, lamenting that drop-off of overtime meant that they needed to hire more people and implement more automation, more investment on robotic engineering (Yip, 2012).These costs to the company are easy to determine. However, the gains in utility from these implementations are difficult to tell. Would productivity increase? Will employees be more loyal? Will turnover rate be importantly lesser? Consequences like these are hard to measure. Lastly, utility gained from these business transactions mean divers(prenominal) things to different people (Fuitzsche, 2005). Some managers gain utility from maximising their employees happiness. Some managers calcul ate utility as one which will increase their material wealth. Below I will compare utilitarian ethical theory with egoism and moral rights approach, to show that while utilitarianism has it flaws, it is still the more useful ethical theory. The utilitarian and egoism ethical theories are rather similar. Decisions made using egoism ethical theory will often provide the most favourable outcome to oneself, no matter how others around are affected (Fuitzsche, 2005).The other parties may not be harmed or disadvantages, but to the decision shaping machine, it is of no concern. The decision maker using egoism thinks astir(predicate) how the pro linear perspective would involve him (Collins, 2009). If the proposition adds onto his interest, it is right. If it does not, it is wrong. However, the decision maker using utilitarianism thinks about how the preposition involves everyone affected by it. If the preposition done is advantageous to the most number of people, it is right. If it is ha rmful to the most number, it is wrong. Egoism is very similar to the philosophy of Adam Smith (1790). Egoism according to Smith is an excellent market allocating tool, which benefits society if one cares for their interests in the long run. Egoism usually views things in the short run, which is similar to act utilitarianism, which evaluates what happens in that one incident. However, while utilitarian considerers the total positive net utility, egoism only considers the decision makers self-interest.Thus decisions made using egoism would be deemed as unethical. The rights a principle gives you secure moral or human rights because you are a human being. The moral rights approach stresses that human beings have essential rights and power of choice that cannot be taken away by an individuals action. Gerald Cavanagh (1990) explains six-spot rights that he affirms are basic to business work. They include life & safety, honesty, privacy, freedom of conscience, freedom of speech and ul timately private property. One example is regarding Firestone and their tires. In America, 1978, the National Highway and Tran bidation Safety Administration (NHTSA) began canvass the relation between Firestones Wilderness AT tires on Fords explore sport utility vehicle.The problem of Firestones tire separation was known internally at Firestone and by the move manufacturers however, instead of recalling the tires, they kept it in the market, resulting in 150 preventable deaths and 500 injuries (Henn, 2009). As facts leaked out that were damaging to both companies, they became more aggressive in its defence. Firestone appeared to have violated several human rights. The firm knew that the tyres would create a hazard to humans. And by refusing to recall its products, it violated the right to truthfulness when the truth was extremely important. level after the whole incident was resolved, public trust in Ford wavered. According to Henn (2009), a position of trust with the public tha t took many years and millions of dollars to build was severely damaged. According to the utilitarianism theory, an ethical decision is one that produces the most amounts of advantages to the majority of people (Trevina & Nelson, 2011).However, according to the moral rights approach, an ethical decision is one that does not let on on the rights of another. The utilitarian approach is surpass for countries with high collectivism while moral rights approach is best for countries with high individualism. According to Hofstede (2007), most Asian countries scored below average on Individualism. Singapore is no different, so the utilitarian approach is more applicable in companies here. According to Johnson (2007), there is the five I format with regards to making decisions. A problem must first be identified, before it can be investigated. Next, one has to be innovative in coming out with many solutions. After this, a solution has to be isolated and then implemented. Making an ethical decision is easier when one applies an ethical theory.A decision made using the utilitarian theory is ethical if it provides the greatest net utility, and produces the greatest benefit for the largest amount of people. Rules developed under utilitarianism can become a moral code to be used throughout the company. Thou it has its limitations, as it is difficult to measure utility, or figure out the consequences of a decision, and that it world power not benefit everyone, but it is still better as compared to egoism or moral rights approach. Utilitarian is the most useful theory in guiding company decisions, and when used together with moral rights and egoism, it shows what it means to be ethical.