Term Paper on "Business Ethics in the Context"

Term Paper 8 pages (2866 words) Sources: 1+

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business ethics in the context of the Enron scandal. Business ethics are seen to be very important today, but yet there are still many businesses that do not engage in ethical behavior, either toward their employees or toward those that they work with in other companies, such as distributors and suppliers. While this is unfortunate, there are cases where the companies do not 'get caught' for a long time, and this makes them feel secure in what they are doing, even though they are aware that it is wrong. Their concern lies, therefore, not with doing what is right, but with not getting caught for doing what is wrong.

Where Enron is concerned, the company did 'get caught' at the dishonest dealings that it was involved in, and the whole company virtually collapsed. However, there were stronger and much more important repercussions than just what happened to the company. The employees lost their pension plans, they were out of work, and there were larger societal impacts that became obvious in the days and weeks after the scandal made the news. It is important throughout this paper to see that Enron is being discussed in the much larger context of a societal concern that could yet happen to other companies.

Business Ethics: The Issue of Enron

The concept of business ethics has been around for many years, but many companies and employees are still not clear on what is ethical and what is not in many cases. Some managers feel that it is important to treat their employees in an ethical manner, but ethics are not required when working with other companies in the cut-throat business world. There are other managers who do just the opposite -- treating their employees like slaves, but being fair in dealings with competitors and others. What is 'ethical' becomes a matter of opinion, which can make business dealings difficult for many (Garrett & Klonoski, 1986).

Business ethics do not require understanding from a managerial standpoint only. Employees should be aware of what business ethics really mean, and what the ethical rules of their company are. Most employees would agree that it is wrong to steal money from the company they work for. However, those same employees would think nothing of taking home a pen they stuck in their shirt pocket, or a notepad they took with them when they went out to talk to a client. While small items such as pens and notepads may seem very insignificant, even small items are part of the ethical dilemmas that face companies today.

Over and above the small items are the larger issues such as discrimination, sexual harassment, and overall treatment of employees. These larger items are more easily recognized and treated as ethical dilemmas than the smaller items mentioned in the above paragraph, but both large and small items are important to the ethical running of any business. Business ethics is currently a very hot topic, but not enough is being done to correct the wrongs that still go on every day in the business world. There is always more that companies can do to protect themselves and their employees from ethical dilemmas, and the evolution of the current field of business ethics still has a long way to go to reach the high level demanded of such an important societal topic.

Ethical considerations in business must not be just something that are listed on the company mission statement, or something signed by an employee when he or she is hired. It must be an ongoing process of re-examining the codes of ethical conduct and making sure that those codes are up-to-date and relevant. It is also necessary to make sure that the employees who agreed to uphold those codes are continuing to do that. All of the written codes in the world will not make a difference if the management fails to utilize the things mentioned in them. They must remain sensitive to other employees' racial and cultural differences, and assure employees that there are policies in place to prevent unethical behavior.

Recently, with the collapse of Enron, new calls are going out to revamp the business ethics movement. Most people believe there are still large deficits in the ethical codes of most businesses if a company like Enron can literally fall apart the way it did. The question for Enron executives is how people who were believed to be so intelligent could lack the moral courage to tell the truth. Further, why did they make no effort to seek out the truth, and make sure that everyone in the company was doing their jobs in an ethical and legal manner?

Greed is one of the suspected reasons why Enron executives failed to seek out and tell the truth. When the economy gets shaky, the morals of some companies get shaky as well. Most large companies are under tremendous pressure to perform, they are worried about profits, and they are worried about what will happen to their stock on Wall Street if they fail to meet the quotas expected of them. Even though these are all valid points to help understand why companies sometimes fail to exercise the proper moral judgment, it still does not make their decisions correct or ethically viable.

One of the problems with the business ethics movement today is that business ethics courses are not being taught to have much application in the real world. Most of these types of courses spend a lot of time on issues such as environmentalism and affirmative action, and do not spend enough time on integrity and truth-telling, which are actually more important (Bernstein, 2000). Currently, the business ethics movement is making strides, partially due to Enron and other large companies that have recently ran afoul of the law. In order for the movement to continue and remain sound, other companies must learn from the mistakes of companies like Enron and make certain that they do not subscribe to the same moral codes. Businesses must want to make ethical choices for the business ethics movement to actually grow strong. Anyone can hang a code of conduct on the wall, but following it is where the real work comes in, and businesses that do not follow it will sooner or later end up where Enron was when the collapse took place.

There were several ethical dilemmas that Enron faced when they had difficulties. The first dilemma that Enron faced in the workplace is the information dilemma. In the information dilemma employers and employees weigh whether they want to tell the whole truth, the partial truth, or an outright lie. 'Whole truth' and 'outright lie' are pretty straightforward, but 'partial truth' is a little more of a gray area. Partial truths fall under the category of 'misinformation'. They are not the complete story, but yet they are not totally dishonest, either. For example, if a potential employee is asked why he left his previous job and he states that he felt it was time to explore other opportunities, but he refrains from mentioning that the boss was about to fire him because he had lost an important account this is misinformation. Unfortunately, the information dilemma encompasses issues far greater than a 'white lie' during a job interview. There are much more serious problems such as misleading advertising, product safety, and bargaining styles during negotiations (Donaldson & Gini, 1984).

There are two basic schools of thought in the business world about lying. The first is that business is sort of like a poker game, and while there has to be a minimum level of honesty, a certain amount of falsity and bluffing is also acceptable. These types of bluffs include things like slogans that state the customer 'has a friend' at a particular company. No one seriously believes that. It is understood that the slogan is an attempt at making a statement about the friendliness of the employees and how customers are treated. It is also deemed acceptable by this school of thought for an older person who feels that they may face age discrimination to lie about their age on their job application (Donaldson & Gini, 1984).

The other school of thought is the one that holds views like those of Immanuel Kant. According to Kant, lying for any reason at any time was completely unacceptable. Kant does, however, distinguish lies from false statements, and give the impression that false statements are acceptable in games, when the statement is part of the game (Donaldson & Gini, 1984). Those who see the business world as a game might then feel that false statements are absolutely acceptable. Kant feels that false statements are also acceptable in one other circumstance -- when someone is being tortured by their enemies. It is highly unlikely that that excuse would work in today's business world.

Companies today are trying to achieve a balance between lying outright and the views of Immanuel Kant. Employees and employers alike are encouraged to tell the… READ MORE

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