Q & A : ASSIGNMENT I

BUSINESS ETHICS 

The Definition of Business Ethics :

Business ethics are moral principles that guide the way a business behaves. The same principles that determine an individual’s actions also apply to business.

Acting in an ethical way involves distinguishing between “right” and “wrong” and then making the “right” choice. It is relatively easy to identify unethical business practices. For example, companies should not use child labor. They should not unlawfully use copyrighted materials and processes. They should not engage in bribery. However, it is not always easy to create similar hard-and-fast definitions of good ethical practice. A company must make a competitive return for its shareholders and treat its employees fairly.  A company also has wider responsibilities. It should minimize any harm to the environment and work in ways that do not damage the communities in which it operates. This is known as corporate social responsibility.

Benefit of Business Ethics:

- Providing organizational guidelines for business integrity in turbulent times.

- Helping employees deal with ethical issues they face daily on the job.

- Building solid company teamwork and productivity.

- Creating an insurance policy – to help ensure that company policies and procedures are legal.

- Avoiding criminal “acts of omission” which can lower potential fines.

- Reinforcing the values associated with quality management, strategic planning, and diversity management.

- Promoting a strong public images.

- Improving society.

- It is the right thing to do.

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CORPORATE GOVERNANCE

The definition of Corporate Governance :

Corporate Governance refers to the way a corporation is governed. It is the technique by which companies are directed and managed. It means carrying the business as per the stakeholders’ desires. It is actually conducted by the board of Directors and the concerned committees for the company’s stakeholder’s benefit. It is all about balancing individual and societal goals, as well as, economic and social goals.

Also, Corporate Governance is the interaction between various participants (shareholders, board of directors, and company’s management) in shaping corporation’s performance and the way it is proceeding towards; is a deals with the manner the providers of finance guarantee themselves of getting a fair return on their investment; is  clearly distinguishes between the owners and the managers; is deals with determining ways to take effective strategic decisions; to ensures transparency which ensures strong and balanced economic development; and lastly, Corporate Governance has a broad scope. It includes both social and institutional aspects. Corporate Governance encourages a trustworthy, moral, as well as ethical environment.

Benefits of Corporate Governance

1. Good corporate governance ensures corporate success and economic growth.

2. Strong corporate governance maintains investors’ confidence, as a result of which, company can raise capital efficiently and effectively.

3. It lowers the capital cost.

4. There is a positive impact on the share price.

5. It provides proper inducement to the owners as well as managers to achieve objectives that are in interests of the shareholders and the organization.

6. Good corporate governance also minimizes wastage  corruption, risks and mismanagement.

7. It helps in brand formation and development.

8. It ensures organization in managed in a manner that fits the best interests of all.

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OXYMORON

Why Business Ethics is considered “Oxymoron”?

By Oxymoron, we mean the bringing together of two apparently contradictory concepts such as cheerful pessimist or deafening silence.

The question determines if Business Ethics can be an oxymoron is very relevant because these two areas seem to be very incompatible. Indeed if we have a look to their respective definitions they do not work together first. Succeeding in business is largely about advancing our own private interests, aggressively competing against other people, beating them out for the same prize, and having unlimited ambition for money, position, and power. The moral life by contrast, focuses on our duties to hurt anyone (deliberately or accidentally), to place other people's interest ahead of our own when it's called for, and always to treat others with the dignity and respect they deserve.

  An Oxymoron is the juxtaposition of two apparently contradictory words or concepts. The very contradiction that is inherent in Business Ethics is an indication of the challenge that individuals who work for organizations face when they have to take decisions that involves conflicts of interest. Aim of business and ethics are contradictory and incompatible (apparently). Business ethics put values in conflict according to Trevino and Nelson on 2007. The global concept of business is fundamentally based on the principle of competition for limited resources. That means the practice of maximizing one's gains at the expense of others. The outcome is the creation of a hierarchy of those who have and those who have not. Therefore the aim is "to eliminate" the others in orders in order to obtain more. As said Mielton Friedman "The social responsibility of business is to increase its profits"

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