Ethical Business Culture

A Utopia or a Challenge?

Andreas Karaoulanis

• Publisher: Business Expert Press
• Year: 2021
• Print ISBN: 9781953349781
• eBook ISBN: 9781953349798
• Topic: Commerce
• Subtopic: Déontologie des affaires

This book investigates both the ethical paragons involved in small business ethical decision-making process and their consequences and the implementation of the right culture in small business as a paragon of stability and growth.

Small business is a major component of societies, especially now. Being in leadership positions in small business is something which many times involves tough decisions to be taken. The major question that this book addresses is whether ethical decision making in small business is a paragon that needs to be taken into consideration?

Surviving and growing is something which involves many aspects that need to be taken into consideration too. One of them is the human factor, which many consider to be a crucial paragon, more important than even strategy implementation. Under this prism, this book will investigate both the ethical paragons involved in small business ethical decision-making process and their consequences and the implementation of the right culture in small business as a paragon of stability and growth.

The author sheds some light into aspects that we all have encountered in our professional lives and which sometimes had major impact on both business and the environment.

PART I

Business Ethics. Is It a Prerequisite?

CHAPTER 1

What Do We Mean by Ethics?

Ethics: A General Description—Ethics or Morals?

Being a professional in any discipline usually results in tough decision making. Difficult circumstances are extremely possible to arise, circumstances which require, apart from a concrete technical and knowledge background, an inner mature personality which will be able to take the right decisions at the right point in time. Such decisions will not only be critical in terms of the very business, but also be very important in terms of creating or sustaining the right equilibrium inside the company and between the company and the surrounding society where the company in question operates.

But what do we mean by the term ethics and is there any kind of difference between ethics and morals, which is another term usually used in the same premises?

According to Surbhi (2018), ethics can be defined as follows: They are a philosophy which has to do with specific principles that can be used to describe the conduct between individuals or between a group and which can be used in order to help us decide what is good or bad. They can also be described as the standards which govern a person’s life.

The principles that ethics involve are mainly the following:

• Truthfulness

• Honesty

• Loyalty

• Respect

• Fairness

• Integrity

(Surbhi 2018)

On the other hand, morals can be seen as the social, cultural, and religious beliefs or values of an individual or a group which can be used as a yardstick in order to help you determine what is right or wrong. They can be seen as the rules/standards that society usually imposes and which we are using in order to help us decide what is right or wrong in our everyday life (Surbhi 2018).

The more important principles of morals can be said to be the following:

• Do not cheat.

• Be loyal.

• Be patient.

• Always tell the truth.

• Be generous.

(Surbhi 2018)

It can be said that the Ten Commandments were the morals that God imposed to the Israeli, while ethics can be seen as the personal principles that everyone uses in order to define good or bad in one’s life, especially when such principles are able to lead to the moral ones.

In Table 1.1 we can see the main differences between morals and ethics as Surbhi (2018) describes them.

A crucial point that will be examined throughout this book is the notion that “from the standpoint of moral philosophy, the idea of business ethics appears rather unusual” as Klikauer (2017) states in his paper titled “Business Ethics as Ideology?” The idea that business cannot be ethical is an idea that can be said to be a very natural one. Some might even argue that ethics and business have an oxymoron relationship somehow. But is that so? Is it impossible to have ethical business, especially nowadays?

The author of this book argues that, especially when we deal with small business, it is. A very characteristic example toward the same direction with the author of this book is what Fassin et al. (2011) discussed in their paper titled “Small-Business Owner-Managers’ Perceptions of Business Ethics and CSR-Related Concepts.” They stressed that given the impact that small business owners have in their very companies, both corporate social responsibility and company ethics can take a different way in small business. The result can be that small business owners can be able to shape their company’s culture in a very positive way and to implement ethical values that, although profit will always be their number one target, can be the cornerstone of their business’ whole operations. This fact per se will have vast positive impact on the lives of the company’s employees and in the long run to the societies in which these businesses are operating. But we will discuss extensively toward that direction in the chapters to come.

Table 1.1 Main differences between morals and ethics (Surbhi 2018)

Ethics	Morals
Ethics are dealing with what is “good or evil”	Morals are dealing with what is “right or wrong”
Ethics can describe one’s reaction to a particular situation, For example, “Is it ethical to state the truth in a particular situation?”	Morals are general guidelines framed and implemented by the society, for example, “We should speak the truth”
Ethics is a word which originated from the ancient Greek word “ethikos” which refers to character	The term morals is derived from an ancient Greek word too, “mos” which refers to a specific custom which can be framed and implemented by a group of people and/or a public authority
Ethics are attributes of one’s character and can be chosen by that very person	Morals can be dictated by the society, the culture, or the religion in this specific area
Ethics have to do with the right or wrong contact between individuals	Morals have to do with the principles that define what is good and what is not
When we refer to ethics, we need to understand that individuals are free to choose the principles that will govern their lives	Morals can be either accepted or rejected by the individuals as they are not responsible for them. The society is
Ethics are the same regardless of society, religion, or culture	Morals can vary from society to society, religion to religion, or culture to culture
Ethics can be widely seen in business where they are described as “business ethics”	Morals cannot be applied to business at all
Ethics cannot be expressed in the form of some kind of statement	Morals can be expressed in the form of statements

Ethics in Society and Business

Businesses are a part of society as they operate inside the society, they are influenced by it, and they influence it in a two-way interaction. This is what the open systems theory supports, which, according to Jung and Vakharia (2019), sees organizations as an opened and networked structure which is part of its external environment and is affected by it. Under this prism we can understand why morals can affect an organization’s operation since they affect the ethics of the people who are working in that organization. In that way, depending on the location, the culture, and the religion of each society, organizations which are operating in it can be affected in a way that may influence deeply the company’s culture.

Business can become quite tough sometimes, especially when the pursuit of increased ROI¹ can lead people to cross their ethics line. Meyer-Galow (2018) argues that business managers need to re-establish their reputation, since it has declined due to their disregard for moral decisions and the ethical practices that they might use.

According to Meyer-Galow (2018), business students during their studies are only taught about technical issues in order to acquire the knowledge needed to enter the industry. Such knowledge is not accompanied with compassion and a holistic engagement to business in order to shape an ethical behavior. This is why when entering the business field where they might be in the position to take difficult and hard decisions, they need to adapt a balanced behavior between business decision taking and ethics, something which is not part of their university training. Since their training involves only technical knowledge, they usually find themselves in a difficult position to balance their decisions with the demands of the ever-increasing profits (Meyer-Galow 2018).

Reputation which is equal to brand name is something that can be determined by its ethics (Skill and Esoft 2019). This is why having good business ethics is a paragon which is crucial for a company’s sustainability and development. It is important for companies to be able to understand that if they will foster an ethical program and embed it in their business philosophy via the foundations of a successful company culture, they will be able to increase their profits and reach success (Skill and Esoft 2019). That will happen because the implementation of an ethical program will affect in a positive way not only the company’s employees, but also their customers, suppliers, competitors, and so on, and will therefore have a positive impact on society as a whole (Skill and Esoft 2019). This is why ethical business has tremendous positive results to business and society and, although some may refer to it as trivial, in reality it has huge dynamics and can be the cornerstone of every profitable business.

On the other hand, what is equally important to understand is that the influence of company ethics on company’s employees and its surrounding society is not a one-way road, as the influence goes both ways. Customers, suppliers, competitors, and so on can also input some positive influence on the company as well by returning this positive reaction (Skill and Esoft 2019).

Imagine that only a few years ago, the reputation of a company had to do with magazines, the news, and customers’ opinion which could mainly be spread in the area that they were living or working. Although it was also very important to keep customers satisfied in order to achieve retention and a good brand name, today, things are quite different. Customers have the power to create an instant online word of mouth which can reach hundreds of thousands of others in just a second. This huge power they have is a determinant on how companies need to perceive their interaction with their customers. Since company ethics have, as we saw, a two-way positive interaction with clients, imagine what can happen if that interaction becomes a negative one. It is inevitable that the company’s reputation can easily suffer a huge damage.

We understand from the above that company ethics are very important because not only can they shape the lives of thousands that interact with the company, but also they are a huge business determinant that can make business flourish or destroy very easily.

Business ethics are very important, as we saw, in terms of how businesses consider their involvement to society. We are all witnessing the huge environmental problem that our planet is facing. We all know that this problem was mainly created due to a bad approach that businesses have, on a global scale, toward environment. If business managers are not able to take ethical decisions that affect the environment, they need to understand, since organizations are open systems, that the consequences will be vast not only for the societies and the business itself, but also for them and the generations to come.

Another way that business activities can negatively influence the surrounding society is when businesses via their nonethical decision taking are disturbing the social stability, causing huge social problems to regions or even to entire countries (Aßländer and Goessling 2017). The example of Greece and other European countries, which suffered from the last financial crisis which of course was the result of business activities in a fragile global society, is indicative of such negative influence. It is also a characteristic example of how business ethics can impact the macro-level of the social web (Aßländer and Goessling 2017).

Human Resources as the Go-Between

Employment standards are crucial in any business as they are the cornerstone for the building of a good team which will promote business and thus customer retention and therefore ROI.

Human resource management can be seen as the connecting link between the head of the company (e.g., the CEO) who is responsible for the implementation of a specific company culture and the personnel. In addition, human resource management can be seen as the connecting link between companies and the surrounding community where the business in question operates in terms of defining this very way of interaction based on specific ethical standards that are posed by the company via, for example, the company culture. How ethical is the human resource management is quite crucial for the business and this is why ethical human resource management is going t...

Table of contents

• Cover
• Half-Title Page
• Title Page
• Copyright
• Description
• Contents
• Preface
• Acknowledgments
• Part I Business Ethics. Is It a Prerequisite?
• Part II Company Culture
• Part III The Gist
• References
• About the Author
• Index
• Backcover