Assignment 1 – MGT305 – Business Ethics & Social Responsibility – 29th March 2019

We are living in a period of globalization and extensive international integration, in which

the economies and businesses in the world are simultaneously cooperating and fiercely
competing. The common concept in the world today affirms that competition between businesses
in the globalization environment and international integration is competition on culture, in which
business ethics is a significant factor.

Many countries in the world have long focused on business ethics. Business ethics is an
integral and integral part of social morality in general. There are many definitions of business
ethics, however, through summarizing ideas at conferences, in newspapers and in society, it can
be generalized as follows: Business ethics is a group principles, rules, ethical norms or rules
work to guide, regulate and control behavior to ensure standards and honesty in the operation of
business entities. As a highly specific form of professional ethics because it is associated with
economic benefits, business ethics is the moral category used in business activities but it is
inseparable from its foundation of common social morality and is governed by a system of
values and social moral standards.

There are two most important factors: honesty and respect for people. Honesty requires that
business entities do not use tricky or illegal tactics to make profits, unfair competition. For
partners, customers and consumers, business entities must keep their trust in business, whereby
businesses and entrepreneurs must keep their trust in relationships, ensuring proper performance
and commitment; do not produce fake products, counterfeit goods, poor quality goods, hazardous
products for human health, false advertising, infringement of intellectual property rights, labels
and goods origin. Business entities must strictly abide by the laws of the State, whereby
enterprises and businessmen do not evade taxes or smuggling taxes and produce and trade in
banned goods. For society, business entities must not pollute the natural environment (toxic
waste discharge into the environment, destroy ecosystems) and social environment (trading
harmful goods or services for pure customs and habits, affecting human education),
implementing social responsibilities.

The principle of respect for people requires business entities to respect dignity and
legitimate rights (salary, insurance, retirement, policy regimes); ensuring labor safety; create

1
 Assignment 1 – MGT305 – Business Ethics & Social Responsibility – 29th March 2019

conditions for physical and intellectual development of the contingent of officials and employees
in the enterprise; expand democracy and encourage innovation and technological innovation;
respect customers' needs, interests and psychology; healthy and fair competition with
competitors, promoting air and cooperation and healthy competition; attaching the interests of
enterprises to the interests of customers and society, attaching importance to business efficiency
associated with social responsibility.

The object of business ethics is the business entity, which includes all subjects of
relationships and business behavior, including entrepreneurs and business organizations such as
households and companies, enterprises, corporations as well as partners and customers. Business
ethics has a wide range of applications including all social institutions, organizations and
individuals that relate to or affect business operations such as political institutions, governments,
unions and suppliers, applicants, customers, shareholders, business owners, employees in
enterprises and business organizations.

Business ethics as the most important component of business culture, is a fundamental

factor creating the trust of partners, customers and consumers for businesses. “Business ethics is
the basis to build trust, cohesion and loyalty of staff and employees in the enterprise, ensuring
from leaders to all employees in the enterprise have the conduct ethical standards, thereby
constantly improving the image, reputation and brand of the business. The survival, development
and profitability of enterprises is decided by consumers, so enterprises want to achieve high
profitability and sustainable success, they must build a foundation of business ethics for my
business”.

A moral organization operates honestly and fairly. Some characteristics of an ethical

company include:
- Respect and treat fairly with employees, customers, investors, suppliers, communities and
all those who have shares and contact with the organization
- Honest communication with all stakeholders inside and outside
- Integrity in all transactions with all parties involved
- High standards for personal responsibility and ethical behavior

2
 Assignment 1 – MGT305 – Business Ethics & Social Responsibility – 29th March 2019

Building and enforcing business ethics is a factor that brings great benefits to businesses.
According to the study of two professors from Harvard Business Management School (USA),
John Kotter and James Heskeu (author of the book “Company culture and useful activity
index”), the companies with different ethical standards and traditions achieve different results.
Two professors gave impressive statistics, whereby, within 11 years, companies that focused on
ethical business practices raised their income to 682% compared to 36% of companies do not
value the practice of ethical standards in business. These companies also increased 90% of their
stock value in the stock market compared to 74% of companies that did not really value business
ethics; 756% increase in net profit, far exceeding companies that do not value the practice of
business ethics.

Corporate social responsibility, also understood under other names such as the sustainability
of businesses, sustainable businesses, the conscience of businesses, the responsibility of a
business or a responsible business is a form of self-regulating business activity.

Corporate responsibility has many contingences relying on the situation of the act, the
individual or group who acted, and the corporation’s policy. Companies are obligated to their
employees, suppliers, and the society. The corporation is a team, each individual’s job is important
for the organization to function. The cooperation between employees in an act shares the benefits
of the act and the moral obligations. Businesses also share the moral obligation of their
employee’s actions. The responsibility of the action is contingent upon if it was a group decision
or an individual decision. Traditionally those who knowingly and freely did what was necessary
to produce the corporate act are each morally responsible. It is argued that low-level employees
are order-takers and the moral responsibility belongs to the order-giver. If any party freely
and knowingly does something wrong their moral responsibility is not absolved. It is always
situational who is the moral responsible party of an act. Individuals are morally responsible to
know the difference between right and wrong and should not be forced to do immoral acts.
Corporations are morally responsible to prevent wrong acts of doing business.

3
 Assignment 1 – MGT305 – Business Ethics & Social Responsibility – 29th March 2019

Ethical responsibility at work is difficult to assign among participants. The decision is

usually collective and labor is divided. The role is defined and goals and systems are the same.
When we work in an organization, we assign some responsibility to it. But is the organization
responsible for its actions or is it only humans who can have moral responsibility. The concept of
moral authority is basically to hold someone responsible for their ethical behavior. A moral agent
is a person who is capable of acting, rational and following moral rules - so they can be
responsible for their actions through moral judgment.

Organizations, some argue, are a kind of moral agent because they have a structure, intent
and decision-making personality, and are therefore able to act intentionally. These actions may
not necessarily reduce the contribution of each person. Not easy, not always possible, assigning
organizational actions to specific individuals.

Others find the organization capable of acting and, therefore, responsible for moral
evaluation. But they did not go so far as to accept the organization as a moral agent. So while we
can assess the morality of the company's actions, we cannot attribute moral responsibility to the
entity.

However, others argue that organizations cannot be moral agents. They are just structures
that govern people's moral actions, but they are not moral agents themselves. Therefore, we
cannot be morally responsible for what individuals do on their behalf.

There is much focus on the culture of an entity. This is based on the understanding that the
environment that the entity creates affects people's behavior. If we want to understand why
people behave the way they do at work, we can understand more by looking at the environment
in which they work and live rather than just looking at individuals.

But we must also remember: As individuals are moral agents, we still have moral
responsibility for what we do, even if our work environment or anyone else affect us, or if other
ethical actors are involved. Theoretically, a strong case can be made for the moral responsibility

4
 Assignment 1 – MGT305 – Business Ethics & Social Responsibility – 29th March 2019

of companies. However, this does not exclude personal moral responsibility for acts as a member
of the company.

Moreover, it is evident that there is concern substantial misconduct of the company will not
be resolved and the ability both good behavior and bad companies have been deeply influenced
by the degree to which individuals and enterprise organization must be morally responsible.