Business is more than just a making money activity. This is the first thing I learnt in these discussions. Businesses have various codes of ethics to follow in their practices. Although businesses pay the price when they go against these codes, I found this amount to be too small compared to the financial gains from it.
Business ethics can be looked at from three perspectives. On the macro level, businesses are accountable to the national and the international community. They follow political or social system. On the corporate level, social responsibility of businesses plays a vital role. Lastly, the individual level involves consideration of an individual’s behavior and actions within the organization. The roles of businesses in moral/ethical issues are to identify and acknowledge the differences in social, cultural, economic and environmental factors within its environment and to work toward maintaining them or making them better. Therefore, business governance should ensure sound maintenance of business practices and decisions. Governance is also essential in assuring the integrity of investments by investors, thereby reducing risks which might be associated with it.
The role of board of directors should be to protect the shareholders’ assets. It is their responsibility to ensure that investors receive profits from their investments. In addition, they should ensure the provision of employee’s rights. The organization is legally responsible for treating the employees fairly in terms of working conditions, health issues and safety standards. Every organization has financial responsibility of paying fair salaries to their employees as well as reasonable payments for the materials or services rendered to them. They are also responsible for the provision of clean, healthy working conditions to their employees. Lastly, it is morally right for organizations to give back to the societies they serve. Businesses can give back to the society by providing service, donations, education or environmental programs to their neighboring communities. However, most organizations tend to ignore some of these ethical issues.
The Chief Executive Officer (CEO) has the responsible of promoting diversity and reduction of discrimination and harassment within the organization. Discrimination introduces a culture of fear. This culture leads to increased tension among employees, who become reluctant to enter into discussions involving critical issues affecting the organization. The resulting atmosphere is a barrier to learning. It also leads to isolation of the company from the community and deters the development of defensive mechanisms that are problematic to the business. In this scenario, I would urge the CEO to seek advice and help from like-minded people, who may provide a solution to the issues. He/she should also encourage equality as well as diversity in the organization’s workforce. Promotion of diversity leads to improved range of experiences, broad perspectives and enlarged cultural awareness within the business setup. Bullying and harassment are harmful in the organization, as they develop poor work morale, loss of respect for supervisors, poor employee relations, absenteeism, resignations and poor company reputation. This can be solved by implementing a clearly understood anti-harassment policy in place.
The main ethical issues in accounting and finance are the falsifying of income reporting, falsifying of documents, inclusion of uncertain information, removal of critical information, illegal evasion of income tax, and engagement in fraud. These can be committed by not incurring of revenues, fraudulent difference timing or concealing liabilities and/or expenses. In addition, the illegal disclosures and omissions as well as false statements of inventory are also immoral. Most of these unethical behaviors are disguises of the current state of the company to prospective investors.
One way of reducing the moral/ethical issues in the organizations is by increasing employee’s responsibility in the organization by taking stock ownership. This increases their responsibility in the organization. In addition, the organization needs to check the background of the companies they are dealing with and ensure that they comply with these moral/ ethical issues. Organizations should also understand ethics and expectations within cultures and how this might affect its operation. In addition, they should put in place equality, integrity and core values that are to be adhered to in workplaces and business. Lastly, to promote ethical practices in the business accounting and finance, I would recommend the companies to incorporate independent auditors who are to represent the interest of the investors. This will significantly reduce negative moral/ ethical issues in question.