Examine the impact of an organization's business ethics on the performance of the organization. Explain how poor business ethics could adversely affect a business. Use examples.
Ethics is the field of study that is used to prescribe morally acceptable behaviors, and including a wide range of moral and ethical principles, providing methods and guidance for the distinguish between right and wrong. "Ethics is important for managers involved with Management Control Systems (MCS) because ethical principles can provide a useful guide for defining how employees should behave." [Management control-related ethical issues and analysis] It is important for an organization to have good ethics as ...view middle of the document...
Employees judge their workplace to be ethical or not are solely based on what they think their upper managers do, chairman and CEO of Gallup says that "if I think my boos treats me ethically and honestly, that is what I think of the company." [G. O'Brien] It is being vital that managers have a solid foundation in ethics, if managers fail to do so they will fail to recognize ethical issue when they arise. Other ways for ethical control related to Management Control System is to have a business culture where training sessions, codes of conduct and creeds that help employees identify and think through ethical issues.
People who are unfamiliar with ethics conclude that if an action is not illegal and not blinded by the law than it is ethical and is ok to proceed. There are no laws which govern what is morally acceptable by society, but there are laws that prohibit immoral practices. For example, lying within a company is often considered to be unethical no matter the cause, but there are no laws that state that a person can't lie as it is hard to enforce but the law for lying is only enforceable only in extreme circumstances like perjury and in the case where the action not only affects the organization it-self but society at a large scale. [Management control-related ethical issues and analysis]
"Ethics are good business investment as it generates positive externalities like trust and commitment with relevant stakeholders, which in turn assures long-term performance." [P. Berrone, J. Surroca & J.A. Tribo, 2005] "Every ethical issue involves multiple parties, some of whom benefit while others are harmed or put to risk by a particular action",[Management control-related ethical issues and analysis] thus the importance for management to recognize the ethical models that do or might exist. There are many different ethical models, each model has merit, but none is perfect, and they all have limitation as to what can be achieved.
"Utilitarianism is an ethical framework that focuses on the outcomes or results of actions." [Utilitarian Ethics: A Framework for Making Decision 2008] Under this framework, acting ethically means making decisions and taking actions that benefit people by maximizing good and minimizing bad. Jeremy Bentham and John Stuart Mill; two most influential developers of the view point of utilitarianism, stated that the actions of an utilitarian's should seek to create or increase happiness for not only the person performing the act but rather the one that produces the most good for all parties affected by the action. However many argue that pleasure is not quantifiable and cannot be compared on a measurable scale.
Another ethical model is the 'rights and duties' behaving ethically is more than obeying the law; it is expecting your rights to be upheld and upholding the rights of others through ethical duties. "A right is an expectation about something you deserve or a way to act that is justified through a legal or moral...