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Business Management analysis

Fundamental principles of business and managerial ethics.

The word ethics has been variably defined by different authority. Hill and Jones (2004), referred to ethics as "accepted principles of right and wrong that governs the conduct of a person, the members of a profession or the actions of an organization".

More specifically, business ethics are the accepted principles of right and wrong governing the conduct of business people. Entrepreneurs, business people and managers often encounter an ethical dilemma when they confront a situation that requires them to make a choice between two courses of action especially if each of them is likely to serve the business one particular way or the other. To make the right decisions, entrepreneurs and managers must weigh the competing rights or claims of different interest groups. Sometimes, taking a decision is easy because some obvious standard norm of behaviour applies. In other situations, entrepreneurs have a problem deciding what to do.

Business and managerial ethics

The issue of whether a particular action is ethical or not has attracted a host of controversy over the years. This is because the subject is very complex especially where an attempt is made to establish principles of general application. All of us can give many examples of ethical rules. Some which readily come to mind are 'one should not tell lies' , 'one should not steal' , 'one should help people on need' etc.

However, while a large majority of people would agree that in most situations, one should not tell lies, there is far less agreement if one proceeds to ask whether exceptions to this rule are allowed in some more or less extreme cases.

Assuming, for instance, that a mad man carrying a cutlass asks you if your sister is at home. You will reasonably fear that he wants to attack her. Your sister is actually in the house. Does the rule that you should not lie cover this situation? You may decide to lie because life is already involved, but is it really ethical to do so? While some will reasonably justify your actions as being ethical, others may react conversely and say why must you lie even if life is involved? Well as we ponder over whether it is ethical to lie or not in the context above, the following principles will help us reach a rational conclusion and help top facilitate informed judgment on the part of the reader of the article.

1. Principle of rationality : As entrepreneurs and businessmen, there is the urgent need to strive to act intelligently especially when it comes to dealing with our employees and esteemed customers. This principles will assist entrepreneurs and managers to think clearly and make decisions based on reason rather than emotions while rationally considering the effect that our own behaviours or actions will have on ourselves and others around us.

2. Principle of solidarity: We must be concerned with promoting the well-being of all human beings and not only our own. In as much as we fail to do so, we undermine our own fulfillment. An entrepreneur will be guilty of this principle if he pays deaf ears to the bad working conditions of his employees and yet wants them to be effective and efficient in terms of production.

3. Principle of impartiality: This Principle requires that we be fair, neutral, unbiased. The principle of impartiality imposes the obligation on all managers and entrepreneurs alike to be fair, intellectually honest and free of conflict of interest. When it comes to making certain judgmental decisions that have to do with ethical issues, we should strive to apply the same standards of judging ourselves to strangers or others who are close to us.

4. Principle of efficiency: This Principle states that in trying to promote human fulfillment, good intentions are not enough. One must endeavour to use effective means. This means that such good intentions must be backed up with honest and genuine efforts to realize that intention. A mere promise to increase the pay rate of an employee for overtime purposes without honest effort to fulfill it will amount to nothing but mere lip service.

5. Principe of refraining from willing harm to a human being: One should not choose to harm a human being either emotionally, physically, economically, socially or otherwise. A manager who exposes his employees to direct hazards of workshop without safety measures and precautions will be guilty of this principle. An entrepreneur who sells adulterated drugs directly to the consumers and public without due consideration to the health effect may be inflicting harm deliberately on other human beings.

6. Principle of role-responsibility: The Principle states that one does not have equal responsibility for all aspects of the wellbeing of all human beings. One's special capacity, circumstances, roles and commitments give one a responsibility for certain aspects of the wellbeing of certain people.

7. Principle of acceptance of harmful side effect: Side effect denotes the unexpected result of a situation or course of action that happens as well the result you were aiming at. Under certain situations, it is possible to perform certain actions which are likely to cause harmful side effects. Assuming, an entrepreneur had a long list of nominees out of which one was to be chosen to receive an award for being the best customer of the firm. The ultimate selection was subjected to the voting process. Four customers had the same count. The question now is: whom does the entrepreneur give the award to? Well, using his professional judgment, he decides to give the award to one of them. The harmful side effect of the entrepreneur's action is that he did not give it to the remaining three. Well, under this circumstance, he did not act unethically.

8. Principe of cooperation in immorality: Immorality Denotes a set of actions, attitudes or behaviour not considered to be good or honest by most people. Under certain situations, it is logical and reasonable to cooperate with others who may in anyway engage in immoral actions. Assuming, an entrepreneur who is ordered at gun point to surrender the key to the company's car may not be acting unethically if he willingly surrenders it to the armed robbers so as to save his life. Also, a product dealer who is ordered to hand over the company's goods to sea pirates may not be acting unethically if he decides to hand it over in order to avoid possible loss of lives.

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