Human Brain and Moral Relativism and Universalism in Business

By S.Belen

         Education Consultant, Department of Education, Jakarta

Introduction

I already read Damianus Abun’s article entitled Moral Relativism, Universalism / Absolutism and the Teaching of the Church on Catholic Morality in AERA Research Journal, Volume: 1 Issue: 1, 2010.

Dami’s analysis is profound and systematic leading to a clear conclusion about his stand to defend moral universalism, specifically from Catholic Church’s point of view. He starts his writing by illustrating discussion with his students about whether morality is universal or relative. He then points out the definition of descriptive morality and normative morality and classifies moral relativism into three categories, i.e. descriptive relativism, meta-ethical relativism and normative relativism. He shows the history of opinions on this issue, from Protagoras (as mentioned by Plato, 1591 B.C.), Herodotus (484 – 420 B.C.), David Hume and Edward Westermarck.

 He then criticizes moral relativism based on four different flaws existing within the arguments. Based on all the analysis, he then emphasizes points to be learnt from Catholic encyclical doctrines / teaching, i.e. Veritatis Splendor (Pope John Paul II, 1993) referring to Humanae Vitae (Pope Paul VI, 1969) about the teaching of birth control and the analysis of Pope Benedict XVI. Eventually, he comes to a conclusion that moral universalism is not against freedom of an individual or a group but is inclined to protect and promote freedom in our efforts to reach perfection. The perfection is salvation according to the teaching of church. The morality cannot be perceived as relative depending on pure reasons and feelings. The morality depends on the natural law, i.e. God’s law which was taught by Jesus Christ. There is only one truth; there are no two truths or many truths on an issue. Slavery, death penalty and rape for example are against universal law of morality. There is no room for exception or circumstances to be deliberated in order to judge a wrong action as a good moral action as indicated by Humanae Vitae. There is only one truth. There is no relative truth which depends on context, situation, culture or person.

Allow me to comment this issue from other perspectives to enrich Dami’s standpoint. Those perspectives are the relation between morality and human brain, the need for rational analysis and the problem of executing moral values in business.

Morality and human brain

 Basic needs of human brain are oxygen, nutritional food, information and love. Without sufficient supply of each need, brain will die and consequently an individual will die. Because moral values are predominantly based on love, it is clear that the life of a human being cannot be separated from practicing love and its basis, i.e. moral values. As a basic need of brain, love guarantees the survival of brain and consequently the survival of the owner of that brain, i.e. an individual. (Tony Buzan, 2003. Cf. Tony Buzan 2001).

 Additionally, neuroscience researches suggest a number of working principles of human brain:

1. Success principle: every human being is designed to reach success, not failure.
2. Imitation principle: every human being likes to imitate every thing, including language, motions, elder brother or sister, animal, machine sound, a variety of natural sounds, friend, teacher and parents.
3. Synergy principle: human brain is synergic, continuously develops. Illustration: 1+1=2+. In this system ”2+” can be equal to 3, 5, 224, some millions or unlimited. Human brain has unlimited potentials. From baby to old person, an individual can continuously develop his / here spiral thought and learn in a synergy along his / her life.
4. Trial and success principle: an individual is inclined to follow these following steps in achieving success, i.e. trial – event – feedback – check - adjust – succeed.
5.  Perseverance principle: perseverance is a vital intelligence, a learning machine, thinking and creativity.
6. Radial thinking principle: human brain thinks to all directions like a light bulb shines rays to all directions.
7. Brain as a mechanism of truth seeking: human brain does this for the survival of an individual.

The seventh principle is related to moral values. According to this principle, a baby for example should know that fire can burn or a knife can cut finger. If the baby does not know, the chance for survival decreases or even the baby will die. When brain says about truth, the body becomes responsive and all senses work more strongly and stress decreases significantly. Truth is a necessity for the brain. Therefore, many popular genius figures see their life goal as a “truth seeker” in science, arts, philosophy, religion and technology. Unsurprisingly, many heroes and noble figures, saints, state leaders and community leaders frequently say that the goal of their struggle is to build or uphold truth, to protect and sustain life. (Tony Buzan, 2003; Cf. Tony Buzan 2001).

This research result shows that human being keeps striving to reach the truth. And, one of important truths is the universalism of morality. The history of humanity shows that people from generation to generation always develop moral principles and their implementation in real life in many spheres of life for the betterment of humanity. Long time ago slavery was accepted but now slavery is rejected. In the past racism was allowed but nowadays racism is rejected. More and more countries apply death penalty in state laws. Harder sanctions are taken to punish rapists in the countries all around the world. Those examples indicate the prevalence of moral universalism over that of moral relativism throughout the history of mankind.

Rational analysis is needed

Moral relativism has two components, i.e. the negative: “there are no universal moral rules” and the positive: “right and wrong is relative to the society in which the person lives”. On the other hand, absolutists or proponents of moral universalism argue that there are basic universal rules, e.g. “murder is wrong”. Let’s see one example.

The relativists say that the habit of killing an old parent who is very ill whilst healing cure is impossible by his / her child in Eskimo community is not wrong according to the moral value of Eskimo people. From moral universalism / absolutism point of view, murder is wrong. However, in this case we cannot judge this action as immoral because a seriously rational analysis will conclude that a greater value underlying this action is honor to parents as an obligation of a child. This value is morally right. This is a more important moral value. Thus, although from a simple perspective the murder action is immoral but this action can be accountable for the child to stop a long painful suffering of his / her parent in very cold temperature of North Pole. This action is motivated by a right and important moral value.

This case shows that to determine an action whether it is moral or immoral should be conducted by using reason, logic, concepts, rational explanation and public discussion to analyze problem and to find an answer.

 In order to solve the big debate on relativism or universalism of morality, it is important to discuss about the implementation of morality in business area. The reason for this is that the application of moral values seems to be more complicated and there is no easy answer or solution for solving moral problems in business practices, especially in international business interactions due to an increased number of multinational companies operating in many countries and cultures in this global world.

Moral values in business

In general and specifically in business there are at least four major sources of moral values, namely religion, philosophy, culture and law.
In reality it can be seen that there are global differences in moral practices or ethics. Pluralism applies. There are different ethical theories for guiding moral decision making. Additionally, it seems that culture and economic development drive global differences.
Because cultures of nations and ethnic groups are diverse, the implementation of moral values tends to be different. Regarding cultural effects on ethics, Geert Hofstede discusses about Individualist vs. collectivist approaches to deciding who to hire, ‘feminine’ vs. ‘masculine’ approaches to the environment, and high vs. low power distance approaches to responsibility for moral decisions.

Kohlberg also proposes a model of moral development across cultures, which shows a type of hierarchy from the bottom to the top, i.e. (1) obedience and punishment, (2) individualism and reciprocity, (3) interpersonal conformity, (4) social system / law and order, (5) social contract, and (6) universal ethical / moral principles. From observation in a variety of cultures, it can be concluded that stages 1 to 4 apply to various cultures whilst stages 5 and 6 apply only in a limited cultures.
In terms of economic development and how it affects ethics, the tendency is that there is a correlation between higher levels of economic development and the application of higher standards of ethics. This idea is based on Maslow’s hierarchy of needs.

Midgley argues against relativism by saying that it results in an inability to judge anything, including relativism, since relativism is a judgment against making condemnations of other cultures. It shows internal inconsistency because if one culture believes that it is all right to condemn other cultures, by relativist standards, there’s no way to tell them to stop immoral practices.
On the other hand, Tom Donaldson argues against absolutism or universalism by saying that it is not respectful, ignores local context and assumes one set of concepts overrides all others.
Donaldson’s Hyperrnorms emphasizes three human values, namely respect for human dignity, respect for basic rights and good citizenship. In terms of respect for human dignity, people should be treated as ends in themselves. For example, corporate culture that respects customers and suppliers and safe products, services and workplace.

In terms of respect for basic rights, a business enterprise must support and protect rights of employees, customers and community and must avoid relationships that violate people’s rights to health, education, safety and adequate standard of living.

In terms of good citizenship, a company should support essential social institutions, such as economic system and education system, and works with other organizations to protect the environment.
According to Donaldson’s Hypernorms Model,  in reality it seems that there is still a moral free space. A corporate is obliged to allow local units to adapt to local standards and to support efforts to decrease corruption.

In implementing supernorms, corporate standards are accepted as absolutes and a corporate should deliberate conditions of acceptance of buyers and suppliers and the corporate should support efforts to decrease corruption. From another point of view, Donaldson’s arguments really show the prevalence of moral universalism. Although the implementation of moral norms or standards is not perfect, a corporate is demanded to rectify the implementation, such as by supporting efforts to decrease corruption.

 From international point of view, it can be stated that there is an evolution among business enterprises to reach universal principles which can be realized globally in various cultures. (Source: http://www.unglobalcompact.org/). One reason for this symptom is pointed out by Pojman. Because of limitations in resources, intelligence, knowledge, rationality and sympathy, the social fabric tends to become chaos. Morality is anti-entropic: it counters the set of limitations, expands our sympathies, and contributes to the betterment of the human predicament.

One important example of international efforts to implement moral universalism is UN Global Compact. This was founded by Kofi Annan in 1999 through international ethics guide which should be known by managers. At least there are 2900 firms in over 100 countries already signed this consensus.
This guide consists of ten universal principles within four categories, i.e. human rights, labor standards, environment and anti-corruption. The vision of this guide is a more sustainable and inclusive global economics. Company can use this as a platform to develop their own specific codes of conduct. In their annual reports, the companies publish how they are promoting the ten principles in their businesses.

Human Rights

•         Principle 1: Support & respect the protection of internationally proclaimed human rights; and

•         Principle 2: Do not comply with others in human rights abuses.  

Labor Standards

•         Principle 3: Uphold freedom of association;

•         Principle 4: Eliminate forced labor;

•         Principle 5: Abolish child labor; and

•         Principle 6: Eliminate discrimination in employment. 

Environment

•         Principle 7: Support a precautionary approach to environmental challenges;
•         Principle 8: Promote greater environmental responsibility; and
•         Principle 9: Encourage development & diffusion of environment-friendly technologies.  

Anti-Corruption

•         Principle 10: Work against all forms of corruption, including extortion & bribery. 

(Business 303   Sheppard, Business Society & Ethics, Week 10:  Global Ethical Dilemmas).

The big debate on relativism or universalism of morality or the question whether moral standards are universal or dependent on local norms results in three schools of thought, namely moral universalism, moral relativism and integrative social contracts theory. According to the school of moral universalism, same standards of what is moral and what is immoral resonate with people of most societies regardless of local traditions and cultural norms. Consequently, common moral standards can be used to judge conduct of personnel at companies operating in a variety of country markets and cultural circumstances.

Examples of universal moral principles or norms are, honesty, trustworthiness, treating people with dignity and respect, respecting rights of others, practicing the Golden Rule (Do unto others as you would have them do unto you. Pojman), avoiding unnecessary harm to workers and users of a company’s product or service, and respecting the environment.

Moral universalism appeals to draw on collective views of multiple societies and cultures to place clear boundaries on what constitutes moral business behavior and immoral business behavior. A multinational company can apply a code of ethics more or less evenly across its worldwide operations.
On the other hand, according to the school of moral relativism, different societies/cultures/countries put more/less emphasis on some values than others, have different standards of right and wrong and have different social mores and behavioral norms. What is moral or immoral must be judged in light of local customs and social mores and can vary from one country to another.

A most risky moral problem faced by multinational companies is payment of bribes and kickbacks as part of business transactions.
Therefore, moral relativism applies multiple sets of moral standards. The proponents of this thought maintain that there are only a few moral absolutes to judge a company’s conduct in various countries. Conversely, there are plenty of situations where moral norms are contoured to fit local customs and traditions, local beliefs about what are fair and local standards of “right” and “wrong”. They also note that moral problems in business cannot be fully resolved without appealing to the shared convictions of the parties in question. The rule of this school of thought is “when in Rome, do as the Romans do.”

The third school of thought is the concept of integrative social contracts theory. According to this school of thought, the moral standards a company should try to uphold are governed by both limited number of universal moral principles that are widely recognized as putting legitimate moral boundaries on actions and behavior in all situations and the circumstances of local cultures, traditions, and shared values that further prescribe what constitutes morally permissible behavior and what does not.

Integrative social contracts theory appeals that universal moral principles establish “moral free space” based on the collective view of multiple societies and cultures. Commonly held views about morality and moral principles are used to combine to form a “social contract” with society. It is appropriate for societies or companies to go beyond universal moral principles and specify local or second-order moral norms. Where firms have developed moral codes, the standards they call for provide appropriate moral guidance.

Social contracts theory maintains adherence to universal or first-order moral norms should always take precedence over local or second-order norms.
Relativism (individual, group & culture based notions of right & wrong) and absolutism (universal law of right and wrong) are at extreme ends of the moral spectrum. However, pluralism holds that there are different ethical theories for guiding moral decision making.
Both social contracts theory and pluralism, from another point of view, show that although the big debate on relativism or universalism of morality is not yet finished, mankind keeps striving to improve moral standard implementation. Moral universalism prevails and the perfection process of moral universalism in this global world still evolves. Love as a main menu of human brain and brain as a mechanism of truth seeking are a pillar of this evolution. Let’s be optimistic!

Readings:

 “Good Will, Duty, and the Categorical Imperative”, Immanuel Kant (1724-1804), file powerpoint (ppt)

 

15, Managing Ethical and Social Responsibility Challenges in Bumper Sticker Ethics S Wilkens, file ppt

 Business 303   Sheppard, Business Society & Ethics, Week 10:
Business Ethics, file ppt

Buzan Tony (2001). Head First, 10 Way to Tap into Your Natural Genius, Bahasa Indonesia version by T.Hermaya: “Head First, 10 cara memanfaatkan 99% kehebatan otak Anda yang selama ini belum pernah Anda gunakan, Jakarta: Gramedia, 2003.

Buzan Tony (2003). Head Strong, Bahasa Indonesia version by Susi Purwoko, Memperkuat hubungan otak-tubuh untuk mendapatkan fisik dan mental yang fit, Jakarta: Gramedia, 2003.

Global Ethical Dilemmas, file ppt  http://www.unglobalcompact.org/

Introduction to Ethics, Comp. Ethics, Intro to Ethics/2, file ppt

Introduction to World Religions, RLG 201a, file ppt

Steines John F, Business, Government, and Society, Chapter 7, file ppt

Louis P.Pojman, Ethics: discovering right and wrong Marketing Ethics, file ppt

 Mistakes in Moral Reasoning, file ppt

Multinational Companies, file ppt.

Railton Peter, Normative Guidance and Moral Motivation, Department of Philosophy, University of Michigan, Oslo, October 2008, file ppt

Rejecting ‘cultural’ justifications for violence against women, A Consultation Paper by the Research Programme Consortium on
‘Women’s Empowerment in Muslim Contexts: Gender, Poverty and Democratisation from the Inside Out’ (WEMC), file ppt

 Strategy, Ethics,  and  Social  Responsibility, Screen graphics created by Jana F. Kuzmicki, Ph.D., Troy University-Florida Region, The McGraw Hill Companies, 2007. file ppt

Week Three: The Morality of Human Rights, file ppt
 

 

  

 

 

A call for business ethics

By

Mark Daryll T. Abuy

Introduction

Every individual or organization is investing into a business driven by diverse goals and aspirations. Basically, the capitalist’s primary, if not the sole objective in venturing into business, is to maximize returns on his investment and be able to expand into more profitable undertakings. Some have focused on gaining for their own advantage alone but it is worth mentioning that today, there is an increasing awareness for corporate social responsibility. This means that entrepreneurs are inclined not only to achieving a high rate of income but also to take into account the welfare of its stakeholders including, among others, its employees, suppliers, buyers, and the community in general. It is in this context where business ethics plays a great role not only in maximizing profits but also generating goodwill to business players.

Ethics that we mean in this paper is sets of moral principles or values that define right and wrong for a person or group (Williams, 2009). Business ethics is the application of ethics into business situations. It pertains to the moral behavior or practices of investors/capitalists on how they conduct the affairs of their ventures which would include, but not limited to, the choice on what kind of business to operate, deciding on where the business will be located and who are the target market, the process of hiring personnel, the means of acquiring materials, equipment, inventories and supplies, securing business licenses and permits and settlement of tax liabilities, and promotional strategies employed and channels of advertising or enticing customers to buy-in their products. According to an SHRM/CareerJournal.com survey, only 27% of employees felt that their organization’s leadership was ethical. In another study of 1,324 randomly selected workers, managers, and executives across multiple industries, 48% of the respondents admitted to actually committing an unethical or illegal act in the past year. These acts included cheating on an expense account, discriminating against coworkers, forging signatures, paying or accepting kickbacks, and “looking the other way” when environmental laws were broken. Clearly, poor business ethics is a serious and widespread problem.

For this part, I would like to delve on the areas of human resource management, purchasing and production, advertising and promotion, and tax settlement, among others.

Human Resource Management

A big part on the success of every organization, at large, rests on the functional business area of human resource management. Research found that effective human resources management has a positive impact on strategic performance, including higher employee productivity and stronger financial results (Daft &Marcic, 2011).

The recruitment plays a very vital role in the employment of the rightly motivated, competent, excellent and fitted personnel to the positions required in the business. Giving due consideration to race, religion, gender, age, among others, is not totally discriminative for as long as everyone is given equal chances in the recruitment phase. I would say, the main consideration in choosing manpower complement is their willingness and drive to uphold and work for the attainment of the company’s vision and mission. According to Dart and Marcic, when selecting an employee, make sure you have enough means of seeing all sides of the person’s personality and qualifications. Don’t just look at the superficial criteria. During the interview phase, to name a few, asking the applicant’s ancestry or ethnicity, religious affiliation, if applicant has any mental or physical defect, are deemed inappropriate or illegal to ask (Sources: Bohlander, et. al., Managing Human Resources, 2001; Mathis & Jackson, Guidelines to Lawful and Unlawful Pre-employment Inquiries, 2002).

Effective performance management is also a very essential system that must be given attention. This ensures the retention of the best talents, motivating the less effective workforce and objectively laying out the non-performing personnel. The dilemma in the business system is the absence of a systematic performance management tool to measure how people are contributing to the attainment of the goals and objectives of the organization they belong to. Hence, the performance of every employee, or each of the functioning units, is not appropriately assessed and evaluated. With this, sometimes, inappropriate recognition and/or remuneration are given to whom it is not due. As a result, it creates demoralization among the people thus; causing the best talents to exit from the organization, leaving behind the less effective ones because of the unethical system of managing performance on a subjective manner. One approach to overcome performance evaluation errors is to use a behavior-based rating technique such as behaviorally anchored rating scale (Daft &Marcic, 2011). The BARS is developed from critical incidents pertaining to job performance. Each job performance is anchored with specific behavioral statements that describe varying degrees of performance. By relating employee performance to specific incidents, raters can more accurately evaluate an employee’s performance.

Another aspect that must be given careful attention is the establishment of a competitive and motivating compensation and benefits package to the workforce. As part of the benefits package, the company must ensure the healthy well-being of its people which may be incorporated through leave privileges, health and medical insurance, social security benefits, among others. The company owner must also ensure that the employees are receiving what is provided for by statutes, meaning compensation package must be aligned with existing wage laws. Further, regardless of the status of employment of the personnel, whether regular, temporary, contractual or casual, they must be ascertained of security of the tenure of their work in accordance with their contracts for as long as these people does not perform unethical affairs and activities which violate the company’s vision, and existing policies, rules and regulations resulting in detrimental consequences to the company.

As employees have ethical obligations to his employer, the business owner also has ethical obligations to his people. That is to ensure that their welfare is well taken care of while being conscious in attaining its gainful target.

Purchasing and Production

Customers are often regarded as the most critical stakeholders. If a company cannot persuade them to buy its products, it cannot stay in business. Thus, business sells customers quality products at a fair price and providing good after-sale services (Jones, 2007). In order to maximize profits, there has to be an accessible source of low-priced products without sacrificing quality as this may affect the company’s integrity which eventually would boil down to losses rather than gains. Reducing costs by selecting suppliers that offer high quality raw materials and components at reasonable prices (Pride, Hughes and Kapoor, 2010). This is in support to the hybrid competitive strategy called “best cost” where an organization sells products at high quality for a considerably lower price (St. John & Harrison, 2010). Due to cost considerations, however, the sourcing out of low-priced materials of good quality may seem difficult. Thus, businesses look into other possible channels or means. Some may resort to buying items, good for resale, used to conceal contrabands and other illegal commodities (e.g. drugs, firearms, etc.). Since they see this practice as a lucrative means to profiting large amount of money, their ethical behaviors are overshadowed by their want for high gain and lose sight on the possibility of being identified to illegal activities. That when uncovered, it may bring the business venture into nothingness.

Advertising and Promotion

Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders (Jones, 2007). With the aim of attracting its target market, a business organization would exhaust all means and anything available even if it means high cost of advertising expenses. Most businesses nowadays are fond of using prominent personalities like the actors and actresses of various television stations just to catch the attention of the public towards their products. However, at some points, the strategies employed by these advertising agencies, I would say, are unethical because it brings deception among people particularly the less educated portion of the populace. Advertising strategies bring various products to the limelight exceeding their actual effectiveness when consumed by the buying public. While business owners do not have direct intervention on these promotional strategies, I believe that it is still their call to impose on the advertising agency, the manner how their products be introduced to the market.

One classic example is a known brand of RTW marketing underwear, jeans, and shirts, among others. As any company exists to get the largest network of buyers and be able to build the highest income, so this business group does. However, it does not advertise its products using naked men and/or women on television screens and on high rise wide billboards just to capture everyone’s attention. This is so because its owners are said to have high regard on the moral of people who will be made to wear their products with their bodies exposed for the gain of the company.

Another example of unethical practice is blatant to food service businesses particularly those selling pastries. So as not to incur much loss with their expiring food products, they sell them on discounted prices. This practice endangers the health of the buying public most especially those who are not wary on the importance of looking into the expiry dates of the products.

One more viral strategy of marketing nowadays is the multi-level marketing or networking system. These business organizations act by luring customers and would-be dealers or networks with a promise of high income. In return, these dealers/networks, in order to be able to beat the quota and meet the expected return, they will venture into strategies of promoting the company’s products to the extent of promising idealistic benefits which they are not even primarily cognizant of.

These foregoing practices of advertising and marketing on the foreground benefit primarily the business owner to the detriment of the consumers.

Tax Settlement

A business venture must be legally organized and instituted in accordance with existing laws and rules which regulate the appropriate conduct of its affairs including the discharge of its obligations to its stakeholders including, among others, its manpower, market, the community and the government.

Ethics comes in initially from the time of applying for business permits and licenses. Business owners must comply with all regulatory requirements and must pay necessary monetary obligations without succumbing themselves to some facilitative strategies just to hasten the process and go away with the standard long queue of waiting for the papers to be done.

Another critical aspect which has already been a perennial issue in the tax system of the country is in the area of tax settlement. Business owners crave for large percentage of income that they do all means to cut costs of purchases and expenditures in order to generate higher income. Higher income would also mean higher amount of tax liabilities to the government. Ironically, sometimes businesses are maintaining two books of accounts: one for financial statements purposes and the other for income tax filing purposes. With the latter, business owners tend to report much lower income generation as against the actual as reported in their audited financial statements. This strategy is done to cut down tax liabilities to the government.

Another issue in the tax system is the payment of facilitative charges to tax examiners. This holds true primarily to large taxpayers who are assessed by the Bureau of Internal Revenue (BIR) for not paying a considerable huge amount of taxes to the government. To illustrate, Company A is assessed of not correctly declaring its income and paying the correct taxes of P5, 000,000.00 for the last five years. After being assessed, they will be directed for audit by the BIR examiners. These examiners may be bribed with an amount of money to facilitate the tax audit. If these examiners would agree to the amount, the audit process will be shortened and the tax liability is considerably reduced. Thus the business owner gains, the BIR examiner profits, and the government loses.

Company B, however, illustrates an ethical behavior in business. The BIR assessed the company for not paying P5, 000,000.00 in taxes for the last five years. It is good to note that the company is ready with its books of accounts, including all needed supporting documents, and presented them to the BIR examiners in good faith. An offer from the BIR team of examiners was made to shorten the audit engagement, and reduce the tax obligation by 50% in exchange of an amount (payable to the examiners) as facilitative charges. Considering the costs involved during the period of audit, the company may have agreed. However, the company owner insisted on proceeding with the audit engagement regardless of the cost accruing to them. In the end, the company was assessed only with P150, 000.00 tax liability. They may have incurred additional costs during the audit engagement, but the prize of letting the BIR team of examiners know that they are doing business in good faith, is another thing. After that, there were no more BIR examiners wanting to be assigned to audit that company. These unethical practices in the tax system of the government need an immediate cure.

Conclusion

Business organizations play a very important role in promoting progress, growth and development in the community. In fact, there had been a growing participation in corporate social responsibilities through donations in calamity-stricken communities, instituting foundations for the poor, etc. But the question plays on whether this value has already been instituted in their system or does this remain only a show off.

Ethics in business must be well valued and guarded not only to gain goodwill and maintain integrity for the organization but most importantly to ensure equal protection and promote the general welfare of its stakeholders and the community as a whole.

Managers can encourage more ethical decision making in their organization by 1) carefully selecting and hiring employees, 2) establishing specific code of ethics, 3) training employees to make ethical decisions and 4) creating ethical climate.

The code of ethics urges employees to conduct themselves as responsible and responsive corporate citizens, respect the environment, maintain high level of legal and ethical conduct, and deal honestly and fairly with customers (Daft &Marcic, 2011). Creating ethical climate starts from top management. First, they need to be a visible role model. Second, communicate ethical expectations in the organization and provide ethical training. Third, visibly reward ethical acts and punish unethical ones (Robbins & Judge, 2010).

Several advantages result when companies behave in an ethical way. First, companies known for ethical behavior enjoy a good reputation. Reputation is the trust, goodwill, and confidence others have in a company such that they want to do business with. A second reason for companies to behave ethically is because when they don’t, the government (and taxpayers) has to bear the costs of protecting their stakeholders. If all companies in a society act socially responsible, the quality of life for people as a whole increases. Business activity affects all aspects of people’s lives, so the way how the business behaves toward stakeholders affect how stakeholders will behave toward businesses. You “reap what you sow” as the adage says.

REFERENCES

Daft, Richard L. and Marcic, Dorothy, 2011.Management: The New Workplace, 7^th Edition. South-Western Cengage Learning.

Jones, Gareth R.,2007.Introduction to Business: How Company Create Value for People. McGraw-Hill International Edition.

Pride William M., Hughes, Robert J., and Kapoor, Jack R., 2010. Introduction to Business, 10^th Edition.South-Western Cengage Learning.

Robbins Stephen P. and Judge Timothy A., 2010.Essentials of Organizational Behavior, 10^th Edition. Pearson Education, Inc.

St. John, Caron H. and Harrison Jeffrey S.,2010. Strategic Management Fundamentals, 5^th Edition.South-Western Cengage Learning.

Williams, Chuck R., 2009. Principles of Management, 5^th Edition.South-Western Cengage Learning.