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HACETTEPE UNIVERSITY
FACULTY OF ECONOMICS AND ADMINISTRATIVE SCIENCES
DEPARTMENT OF BUSINESS ADMINISTRATION
BUS 420 NEGOTIATION PROCESS
Prof. Dr. Azize ERGENELİ
ETHICS AND
BUSINESS ETHICS
Prepared By
Gök?en BED?R-20311755
Mustafa Ç?MEN-20311898
Önder DEM?REZEN-20211836
L. Kür?ad MURAT-20312326
?. Yunus ÖZBAL-20212431
Yurtsev UYMAZ-20212296
Bilgehan VARDAR-20212316
ANKARA
2007
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IMPORTANT CONCEPTS RELATED TO ETHICS
WHAT IS ETHICS?
THE HISTORICAL DEVELOPMENT OF ETHICS
3.1
Ancient Age Ethics
3.2
Mediaeval Age Ethics
3.3
Modern Ethical Theories
3.4
Meta-ethical Theories
WHY IS ETHICS IMPORTANT?
THE AUTONOMY OF ETHICS
DEONTOLOGICAL ETHICS
ETHICS - MORALITY
TYPES OF ETHICS
8.1
Meta-ethics
8.2
Normative Ethics
8.3
Descriptive Ethics
8.4
Applied Ethics
8.4.1
Ethics in Medicine
8.4.2
Ethics in Politics
8.4.3
Ethics in Law
8.4.4
Ethics in Science and Research
8.4.5
Ethics in Public Management
8.4.6
Ethics in Sports
8.4.7
Ethics in Mass Media
8.4.8
Ethics in Education
THE RELATIONSHIP OF ETHICS WITH OTHER BRANCHES
9.1
ETHICS AND CULTURE
9.2
ETHICS AND RELIGION
9.3
PROPRIETIES AND ETHICS
ETHICAL APPROACHES
10.1
UTILITARIANISM
10.2
ETHICS OF JUSTICE
10.3
ETHICS OF RIGHTS
10.4
ETHICS OF CARE
MACHIAVELLIANISM
BUSINESS ETHICS
12.1
WHAT IS BUSINESS ETHICS?
12.2
THE HISTORICAL DEVELOPMENT OF BUSINESS ETHICS
12.3
LEVELS OF BUSINESS ETHICS
12.4
ETHICS AND STAKEHOLDERS
12.4.1
Customers
12.4.2
Managers
12.4.2.1
Agency Theory
12.4.3
Employees
12.4.4
The Government
12.5
ORGANIZATIONAL ETHICS
12.5.1
THE IMPORTANCE OF ETHICS IN ORGANIZATIONS
12.5.2
CONTROLLING ETHICAL BEHAVIOR IN ORGANIZATIONS
12.5.3
WHAT IS ETHICAL CODE?
12.5.4
HOW IS ETHICAL CODE DEVELOPED?
12.5.5
ETHICAL BEHAVIOR MODEL IN ORGANIZATIONS
12.5.6
ORGANIZATIONAL ETHICS AND SOCIAL RESPONSIBILITY
12.5.7
HOW IS ETHICAL CODE IMPLEMENTED?
12.5.8
CORRECTIVE ACTION
12.5.9
ETHICS EDUCATION
12.6
INTERNATIONALIZATION AND CULTURES IN BUSINESS ETHICS
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12.6.1
CONSIDERATIONS ABOUT EVALUATING VALUES OF ANOTHER CULTURE
12.6.2
COMMUNICATION AND VALUES
12.7
THE APPLICATION FIELDS OF ETHICS
12.7.1
ETHICS IN MEDICINE
12.7.2
ETHICS IN SPORT
12.7.3
ETHICS IN GLOBAL ECONOMY
12.7.4
ETHICS IN POLITICS
12.7.5
ETHICS IN WORKPLACE
12.7.5.1
Key Roles and Responsibilities in Ethics Management
12.7.6
ETHICS IN MANAGEMENT (PLANNING, ORGANIZING, LEADING, CONTROLLING)
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REFERENCES
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1 IMPORTANT CONCEPTS RELATED TO ETHICS
Morality: It is a social consciousness, behavior, and ideological relationship style; it is
the whole of moral opinions, values, norms, principles, and behavior styles which is
determined historically and concretely; belongs to a social genesis, class, section; and rules
their attitude towards a certain group, class, government, or thoroughly the community.
(Çalışlar, A. Ansiklopedik Kültür Sözlüğü, İstanbul, Altın Kitaplar Yayınevi, 1983., p. 10)
Ethics: It is the expression of “right” and “wrong” standards related to the past and
present. It is a branch of philosophy studying people’s moral and customary relationships,
behavior styles and opinions. (Çalışlar, A. Ansiklopedik Kültür Sözlüğü, İstanbul, Altın
Kitaplar Yayınevi, 1983, p. 135)
Code of Ethics: It is the mechanism defining the organization’s general values system
and goals to institutionalize ethics in an organization, and guiding for the compliance of the
decision taken for these principles. (Northcraft and Neale, 1990, p. 212)
Professional ethics: It is the total of professional principles which are constituted
regarding a profession and protected by a certain profession group; dictating the profession
members, forcing them to act specifically; limiting individual tendencies; externalizing
inadequate and unscrupulous members out of the profession; and regulating the competition
within the profession and aiming to protect service ideals.
Organizational ethics: It is the series of principles ensuring similar behaviors set for
employees in a legal environment; showing that some social responsibilities are undertaken
while the organization is providing the services undertaken towards the society.
Managerial ethics: It is the behavior principles assuring to be consistent, objective, and
factual in managerial decision making; ensuring the actions to be the best for everyone
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selected; enabling the respect to individuals’ existence and unity and the universal values like
justice, equality, neutrality, honesty, responsibility, respect, openness, love, democracy,
indulge, etc. in actions based on; and leading the executives in their actions.
2 WHAT IS ETHICS?
Today, ethics is a highly controversial issue. Hundreds of questions about ethics can be
derived and the majority of those cannot be answered precisely including the definition of
ethics.
According to some arguments, the reason of why ethics is highly controversial today is
that the ethics-profit conflict has expanded; according to some, ethics has stayed in
background compared to materiality (especially money); and for some, the disappearance of
ethics causes many social wounds in addition to the moral corruption. The progression in
technology and the overburden of consequences considering unethical behavior can be added
to those here. For instance, while, centuries ago, unethical behavior was damaging several
people, today, it is possible to annihilate a nation with an atom bomb. Whatever the reason is,
debates about ethics are increasing day by day. Theses and books have been being written on
this issue; congresses have been being arranged; and even ethics unit is set up in many
organizations.
“Ethics is a significant part of philosophy and science, and a systematic study field as a
subject regarding moral behavior, action, and judgments.” (Yönetsel, Mesleki ve Örgütsel
Etik, Doç. Dr. İnayet Pehlivan Aydın, 2001, p. 4) The main topic of ethics debates is putting
the “good” forth, creating the “good” which makes man’s actions morally valuable. So,
“good” should be defined. Undoubtedly, it has different definitions. With respect to different
ethical mentalities, it is joy, officiating, integrity, love. (Bedia Akarsu, Ahlak Öğretileri, 1965,
p. 2) According to Russell, looking from a different perspective, the thing desired at first sight
is good. The thing loathed at first sight is bad. The problem is that people have different
desires, they are not in consensus, and, therefore, desires contradict with each other. That’s
why, for Russell, ethics is focusing on debates related to the process of defining the principles
to resolve the individuals’ conflicts about contradictory desires or wanted goods. (Ayşe İnal,
Haberi Okumak, 1996, p. 44)
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For C. Solomon, ethics is a concept focusing on the features separating certain groups’
or societies’ attitudes, character from each other and centralizing two fundamental subjects.
First, what does being a good person entail? Secondly, what should determine the individuals’
behaviors and be the rules of boundaries? According to him, ethics contain “right” and
“wrong”, “duty” and “responsibility” concepts. While many philosophers substitute “ethics”
and “morality”, Solomon pointed out this difference.
With its simplest meaning, ethics is a philosophical discipline seeking the values,
norms, rules that form the basis of personal and social relationships people have established
from moral perspective as “right-wrong” or “good-bad”. (Ayşe İnal, Haberi Okumak, 1996, p.
43) Briefly, it is the measures of “right” and “wrong”.
Broadly, ethics, first from the point of the living of the individual who has a certain
morality idea and is striving to realize a certain living ideal, secondly with regard to the
attitude of the philosopher who either criticizes, even convicts his/her age’s state of affairs,
the living of the society s/he is a member of and, thus, attempts to establish alternative values,
living rules or principles instead of existent value chain, or does not define it precisely and
attempts to legitimate or prove its content by displaying, and finally, just like the physician
who analyzes the language of morality, discusses the quality of moral concepts and
judgments, briefly, takes aim at factual world, from the point of study of philosopher who
engages in a theoretical study targeting values world to himself/herself, can be defined as, at
least for now and conventionally, the style of thought, moral principles theory, or philosophy
discipline aiming value whose content contains man’s value estimator experience, shortly
anything that adds meaning to life. (Etiğe Giriş, Ahmet Cevizci, Paradigma Yayınları,
İstanbul, Ocak 2002)
So, where does this ethics, whose importance has been gradually rising, come from
originally? Ethics, which can be called as “morals science” with its simplest definition,
derived from “ethos” in Greek. It means “morals” in Greek. “Ethics” concept, derived from
“ethos”, has emerged as a result of the analysis of moral rules and values by addressing to the
ideal and abstract. As it will be mentioned, the domain of ethics should be exploring the basis
of man’s all behaviors and actions.
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Etymologically considering, there is an ethics-morality dilemma. Ethics comes from
“ethos” in Greek; morality comes from “mos” in Latin. Both cover the meaning of tradition,
custom, habit. However, ethics is more special and philosophical than the moral rules which
are broader in the society. It can be said that ethics is individualistic. It may vary from person
to person. Morality is, however, the value judgments of the society. Besides, ethics is a
philosophical discipline presenting “verifiable-misstateable” information about ethical
problems of man or, at least, expected to present. It is not, else, an activity telling what to do
or setting norms. That is, what should be done is not in the field of ethics. Ethics is talking on
morality, or questioning morality, putting “right-wrong”, “good-bad”, duties and
responsibilities forth, that is, doing the philosophy of morality.
As well, ethics is one of the most important branches of philosophy. It can be identified
with morality concept if specified as the identical of separating the wrong from the right
philosophically. That’s why, mostly, ethics and morality are confused and ethics is regarded
as moral philosophy. Especially in Turkish, ethics is supposed to be the synonym of morality
mostly. This dilemma will be handled elaborately later.
Ethics, which has a relationship with almost every social science, interacts especially
with anthropology, economics, politics, sociology, law, criminology, and psychology.
However, this is not the limits of ethics. It is an issue which should be emphasized sensitively
in biology (bioethics), ecology (environmental ethics), and medicine. Considering the
significance of medicine, it is possible to say that ethics in medicine should be handled,
besides. Nevertheless, “medicine and ethics” is one of the most up-to-date ethics issues. Also,
between social sciences, ethical debates in law have gained depth. Briefly, the existence of
ethics is relevant in every field man stand or affects.
Philosophically thinking, ethics is traditionally divided into three parts which are meta
ethics, applied ethics, and normative ethics. These concepts will be handled later. However,
the point to be handled must be the tendency of philosophy to this field as ethical debates
increase. As it is mentioned, in addition to the morality-ethics dilemma, what is ethical and
what is not, and the contradictory results of different mentalities considering the solution of
ethical problems are between the prominent issues that philosophers discuss today.
Considering ethics professionally, it is seen that professional employees have to obey
the ethical rules of the related occupational branches. These regard with the concepts like
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neutrality, openness, privacy, conflict of interests. So, not the ethical rules of business, but its
ethical mentality can be mentioned. Thus, the principles, the set of rules managing certain
groups are cited.
The question that “Is ethics universal?” is one of the most significant discussions of
ethics concept. As ethics, looking for the answer that what will be done and what will not be
done, changes from person to person, universality cannot be in question. There cannot be
anything usual than that ethics, which changes from person to person, changes from society to
society. Although the “universal truth” studies are conducted universally, it is obvious that
how difficult it is. Because ethics is not morality, that is, it is individualistic. Something that is
right for someone may not be, and probably is not, right for anyone else. However, there are
common rights morally. Nevertheless, it was seen that many agreements on this issue had
been short-lived. However, it is true that some ethical rules are generally accepted though
they are not universal. To illustrate, in medicine, behaviors that do not comply with the Oath
of Hippocrates are not ethical or many of the behaviors that do not comply with laws are
unethical. However, the role of culture in shaping ethical values cannot be denied. Especially,
the deep difference between East-West cultures has caused the ethical rights and the
dimension of the ethical debates to be different. According to Mark Pastin, as ethical system
is the whole of frame rules that individuals have developed to make accurate decisions, ethics
may change from society to society. The changeability of ethics has been proved by also the
study conducted by Raymond C. Baumhart. When asked what ethics was, businessmen gave
those answers:
 “Before I came to meeting, I looked for the meaning of ethics concept from the
dictionary, I got nothing.”
 “Ethics is the thing that my emotions tell me to be the right. It has no standard and this
is problematic.”
 “Ethics is the standards that are accepted regarding individual and social welfare.
Everything that we believe to be right is ethical.” (William D. Hitt, Ethics and
Leadership, Putting Theory Into Practice, 1990, p. 97)
3 THE HISTORICAL DEVELOPMENT OF ETHICS
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Ethics is one of the oldest and most fundamental disciplines of philosophy. Ethical
questions and problems are among the questions and problems that preoccupy philosophers
since the beginning of philosophy and they still, today, sustain their significant place
ontologically. While there had been changes in the degree of philosophers’ interest in ethics
from time to time, ethical problems have always kept an important place among philosophical
problems. Together with the changing historical and social circumstances, some new ethical
problems were raised, but the main questions on the human structure had been raised since
ancient times; these had been answered by philosophers variously. Before handling these
times one by one, generally considering, philosophical ethics mentality was first seen in
Chinese and Ancient Greek philosophy. During this period, Democritus, Socrates, Plato,
Aristotle, and Epicurus opined about this subject. With the rise of Christianity, thinkers like
Aquinolu Thomas reflected scholasticism to ethics. After that, ethics was regarded as only
divine, by 15th century, thinkers like Campanella, Bruno, Montaigne, Charron valued
judicious ethics.
The historical development of ethics started with that people began to live together as
society. In compatible with every age, different ethical debates, mentalities were put forward
in parallel with the life styles of societies, nations and these subjects influenced people’s
moral personalities. Naturally, ancient age ethics is very different compared to today’s liberal
system. Behaviors that individuals regard as unethical have increased since those times
because people’s behaviors are more deeply questioned as especially the human history and
civilization level have risen. The contribution or harms of ethics to man are being discussed
more harshly as technology renders behaviors which are against people’s conscience as
“acceptable”. In this regard, the field of interest of “modern ethics” has expanded; moreover,
ethical mentalities with stricter corners vanished. The role of liberalism in this consequence
cannot be disregarded. People’s preference of materialistic interest over moral responsibility
puts unethical, pragmatic mentality forward.
“Throughout history, main titles can be mentioned as ancient age ethics, mediaeval age
ethics, modern ethics which is composed of reactions to ethical mentality concreting the
lifestyle of modern, capitalist, and liberal world and the lifestyle mentioned, and finally metaethics with one way, contemporary ethics which is trying to fill the blank the smash of
individualistic, liberal ethics mentality exposed with new ethical views with another way.”
(Etiğe Giriş, Ahmet Cevizci, 2002, p.3)
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3.1 Ancient Age Ethics
Most radical progresses were seen about philosophy history in ancient age, so ethics
took its place among the most controversial issues. The contribution of Ancient Greek
philosophy to ethics cannot be denied. First, the existence issue of philosophy was discussed
for a century, and then ethics was taken into the foundation of Greek philosophy by Socrates
the following period. “There are 4 preliminary conditions as general frame determining the
view of Greek philosopher to the moral issues:

Human existence displays a certain structure and goal. For this reason, almost all
Greek ethical theories get into theological ethics scope

Around the theological world view of Greek, this goal for human existence is good,
fair, and virtuous life; good life is composed of pacing human functions in a complete
harmony.

Mind is mainly responsible for this pacing, that is, what separates human existence
from other animals is mind.

Good and proper life attaining the goal of human existence not only depends on
his/her mind, but also on the society s/he lives in.” (Warren Ashley, A Comprehensive
History of Ethics, New York, 1997, p. 35-36)
First theory of ethics history is Socrates’, the founder of ethics, eudemonism (happiness
ethics). He put man to the center of philosophy. He studied what the relationship of man with
himself, universe, and society is and should be, and put the personal, social, and moral extent
of human life foreground. He strived to explain that the major component for people is soul
and they should take care of their souls; and for concreting this, he walked around with bare
feet and a thin dress for summer-winter.
3.2 Mediaeval Age Ethics
With the born of monotheist religions, the classical ideal faith, which is the one believed
of mind to assure a strong basis for individual and social life, collapsed in a new world and
social environment. Mind is no more either the source of truth or the mean to attain that
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source. It cannot create values, it cannot assess values though it can define and analyze them.
Until modern age, God was regarded as both the source of truth and values. In this
perspective, which is completely opposite of the one in ancient age, ethics and religion were
nested, and religion-based perspectives replaced rational thoughts. Morality was associated
with religion; the basis of morality was searched in religious thoughts. While ethics was being
assessed socially in Ancient Greek, it was based on a theological ground in mediaeval age.
Thus, behavior was assessed as ethical or unethical not according to its aim, but with respect
to whether it was appropriate for God. Consequently, ethics, which was associated with the
relationship of man with God, moved out of being “natural” and based upon “God orders”.
“For example, the ethics of St. Augustine, among the most significant thinkers of Mediaeval
Christian philosophy, was substantially “eudemonistic”, just like in Greek; in other words,
what he was suggesting to the man for his action as the final and peak aim was happiness, but
this happiness could be only and only realized in God, not in pleasure.” (Frederick Copleston,
A History of Philosophy, Volume II, Augustine to Scotus, London, 1950, p. 81) Generally, it
can be said that ethics in mediaeval age was theological except Abelardus’ “intent ethics”.
3.3 Modern Ethical Theories
The rise of new age and modern science, together with the formation of commerce
society, destroyed the theological world view of classical age, the religious authority-based
traditional perspective asserting that there is a purposefulness, plan, order, and value in
natural world. Famous English thinker David Hume stated this clearly: “A moral or virtuous
life style cannot be derived from natural system or from a hierarchical existence perspective
with God on top anymore.” (David Hume, İnsan Doğası Üzerine Bir İnceleme, çev. A.
Yardımlı, İstanbul, 1997, p. 409). Neither natural regime nor God orders were regarded as the
basis of morality now. On the contrary, this basis should be searched in human himself, in his
biological structure or rational existence, in the competition conditions of free market, in the
society contract done with his congeners, in the social and political institutions he created, and
in the evolution he passed. It is understandable that modern age or culture had to create its
own morality mentality like every age and culture.
First ethical theories of modern age were developed by Newton, Copernicus, Galileo,
and Kepler in 17th century and were based on science or scientific revolution. The ethical
theories put forward by Hobbes and Spinoza later also contained deterministic acts. The most
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important acceptance of modern ethical theories was that the mechanistic and deterministic
world system was conceivable by mathematically thinking mind, but especially by empirical
mind; that its behavior could be doped out; and that the same thing was also valid for the
behavior of man who was a part of physical nature. So, ethics lightened through science does
not explain human behavior but has to be a mean of keeping it under control; like the things in
nature, offering to modern man, who was isolated from other men, separated from his past or
future, was trying to live only his dynamic existence, that is, was thinking only his personal
interest and joy, a new life style based upon science; and engaging him in a relationship with
other men in compatible with the new world’s demands.
3.4 Meta-ethical Theories
The smash of modern, scientific, lightening normative ethics starting with Hobbes and
reaching to evolutionary ethics, that is, the failure that the contract idea, substituted for
religion which was one of the most important basics of his ethics, displayed on connecting
individual with the society on a moral ground, or at least complementing individual interest
with social interest; the inconclusiveness of efforts to reduce ethics to science by totally
neglecting the values and customs of the community in which the individual was born and
lived; the fact that the material world shaped by technology and power rendered values
completely of no worth, all put ethics and values field forward as the most problematic field
of 20th century. Here, meta-ethics is a new study of ethics under the new circumstances of
modern, lightening philosophy standing against the inexpediency of normative ethics in an
age when values are reduced to jackboot.
Meta-ethics has not suggested a new normative ethics. The most significant developer
of meta-ethics is G. E. Moore.
4 WHY IS ETHICS IMPORTANT?
Why is ethics necessary today? Why is it important? It can be said that ethics in 20th
century will not be adequate in 21st century. Academicians, medical doctors, engineers,
legists, teachers, the people working in business world, media, public sector face ethical
issues every day. The power of technology, business world, and media to determine life has
been globalizing day by day. The decisions that people working in these fields take have been
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directing and shaping society. We see that good decisions may affect millions of people
positively, but bad decisions threaten our future. As it is the case and ethical thinking way can
be a significant cure for drawbacks, professional ethics, business ethics, briefly, applied ethics
has not been an indispensable part of professional education yet, unfortunately.
As it is mentioned, ethics is a controversial issue since the beginning of history. What
ethical behaviors are and who decides what ethical behavior is are always argued. It has been
always wondered whether there is a unique right. The limit of ethics and the abandonment of
ethical behavior under certain circumstances are issues open to debate. Being one of the 4
main branches of philosophy shows its importance, too. So, why is ethics important?
It should be initially stated that conscience accounts for and indicates to the person that
certain things are right and certain things are wrong, and how to behave under certain
circumstances. Thus, people face with two choices in their behaviors: Choosing the ethical or
unethical behavior. Naturally, ethical behavior may vary from person to person and from
society to society. However, there is an accustomed fact that conscience is the decision maker
about ethics. About this topic, Associate Prof. Dr. Özgen states that scholars have a
conscientious responsibility and obligation to show the truths to the students when giving
ethics lecture to them. However, he adds that students are free whether to apply those. “That
is, I teach you the ethical principles but it is up to your conscience to apply these. The
sanction of morality is neither legal nor financial punishments, anyway. It is conscientious.
Thereby, there must be surely a conscientious value in ethics-morality issue.”
Maybe it occurred in the past, too, but it is obvious that the importance of ethics is
gradually increasing. Nevertheless, anti-thesis for this can be argued. That is, population is
gradually rising; unlike, resources are gradually ceasing. So, people have to build successbased strategies to survive. Assuming that the success necessity mostly drives them to
unethical means, people must be unethical. Machiavellianism approach may be mentioned
right here. “Every way on goal is legitimate.” This approach may be valid for success (this is
also controversial) but it is completely wrong ethically. Hiding unethical behaviors does not
seem very probable today as transparency expands, anyway. As it was the case in past,
people, businesses, and organizations were avoiding ethical behaviors to the extent of their
conscience. However in information age, communication and auditing have developed and it
has nowhere to be hidden. That is, even they do not want, people have a tendency to behave
ethically necessarily.
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Institutionally thinking, it is possible to say the same thing. Goals like sale-based
strategies, mass production forced firms tend to productivity rather than ethics. It did not
matter for firms what was good or what was beneficial for man. Only attaining goal was
enough. Likewise, doing this with the minimum cost mostly required being unethical.
Considering employees as slaves is the most concrete example. Another cause in those times
was that the ethical mentality of people was not reflected in economic and financial life. In
this case, customer did not think to punish the firm engaging in unethical behavior because
unethical attitude was mostly also in favor of customer. For instance, customers could
purchase goods and services more cheaply as unethical production was creating products with
low costs. Undoubtedly, the dominancy of firms was also influential here. The scarcity in the
number of firms and products was an obstacle in front of customer free will and it was
obstructing customer to choose ethical rather than unethical. It was more important for
customer to attain product and cheap. Consciousness level is another point of issue. It is
natural that knowledge and culture accumulation is increasing as humanity progresses. This
causes men more enlightened. (Opposite of this can also be seen. For example, in the past, it
was true that more “pacta sunt servenda” was seen. However, it can be said today that human
characteristics are less important. Ethical behavior may be displayed if it is felt that it is
essential, which complicates to precisely define ethics.) As humankind enriches his cultural
heritage like environmental consciousness, social justice concept has become more significant
and, thus, ethics has become more applicable.
Another reason of the increase in ethical applications is laws. Elaborating laws today,
determining right and wrong ethically more clearly with laws and applying more deterrent
sanctions to unethical behaviors have increased ethical applications even if it is compulsory.
Moreover, people and institutions are forced to behave ethically as unethical ones are
externalized from the society more than they were done in the past. To illustrate, we are living
in an age in which environmentally greening firms are favored. This means that ethics, rather
than a social obligation, is a key in success. Nevertheless, ethics and success were
contradictory in the past. Ethically behaving firms were having hard time in especially
productivity, profit maximization. However, today, ones which care of ethics have a
privileged place in the society. Unethical profitable approaches may maintain short-term
successes, but unethical behaviors return both to person and to institution as failure in long
term.
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The increase in society’s sensitivity towards ethics has constituted a social auditing
mechanism. The dominancy of ethics, needs, emerges as legal auditing activates. This
explains the size of the unethical behavior risk. The possibility of appearance of doing
something unethical is high and its sanction is heavy. The simplest of those is social
estrangement.
In fact, ethics influences the sense of confidence. If it is known that unethical behaviors
are in majority, the confidence of people in each other is questioned. This evokes both
transaction costs rise and relations become more artificial. Individuals or institutions have to
track the agreements they make constantly because there is a high possibility that they may
face an unethical situation and this deeply affects the sense of confidence. The importance of
ethics is understood more precisely considering what if ethics does not exist. For example, the
ruling of powerful would have disposed the characteristics of man differentiating him from
other living-beings. Considering that success and goal attainment would be important,
humanistic values, and even the human race later, would have been questioned. This is an
inevitable ending unless the ambition for success is prevented. Simply, global warming is a
fact that was a result of unethical behaviors and it is obvious that how much this process
would be faster if unethical behavior was not stuck to sanction. Even, it is an incontrovertible
fact that current sanctions are not adequate for us.
The growth of media and the improvement in communication impose behaving
ethically. While individuals behaving unethically were only known around their environment
formerly, now, they may be displayed in front of the whole world with the power of media.
This is also the case for institutions. For instance, a worldwide known brand making an
unethical mistake bears with its cost more heavily because it is just a few minutes for this
information to be spread on Internet.
Firms have to take ethics into account in marketing strategies, too. This is both an
inevitable and disadvantageous situation in a competitive environment. Ethics raises costs, it
mostly affects profit margin adversely. The competitive power of ethically behaving firms
(for ex. the factory installing filter) declines. A firm not behaving ethically can easily sweep
its rival. However, in today’s global world, this is the case for only short term. Idiomatically
speaking, the candle of the unethical firm alights during whole midnight. In competitive
environment, firms can use “being ethical” as a competitive advantage. Thus, most firms
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today set up “ethics department”. The loyalty and commitment of customer is closely related
to ethically behaving. Customers are committed to the firm they believe in and trust even if
they bear much more cost. This is an indispensable requirement in long-term customer
relation development.
Another important negative consequence of unethical behavior is the dissolution of the
sense of trust. For instance, how possible is it that a company employee’s colleagues trust him
if it is learned that s/he engaged in an unethical behavior? If it is proved that one of the
partners of the company obtained unethical gains, other partners will be skeptical to that
person in other businesses they engage in, there will be maybe much more transaction costs.
While they were agreeing verbally formerly when giving him/her a loan, now maybe,
collateral or a mortgage will be required which, in return, will increase transaction costs and
profitability will, surely, be impeded.
Likewise, how can subordinates who do not trust their supervisor be committed to the
job or to the firm? For example, employees who saw their supervisor lying not to come to
work can only avoid engaging in the same behavior to the extent of their conscience or an
individual who saw that he is treated unethically will not miss the opportunity to exploit in
another situation. This situation will be also the dynamite of trust mechanism. Thus, unethical
behavior affects negatively both the external relations of firm and internal dynamic.
Today, environmental sensitivity is the field that the importance of ethics is appreciated
most. Indeed, it is too late, but the world should be saved to deteriorate more right now. In
this case, the sensitivity of engaging in ethical behaviors for firms, especially
environmentally, is apparent.
It is also evident that how important ethics is also for the continuity of firms. Firms
should not risk their future for the sake of short-term ambitions. Here, the environmental
sensitivity will enable firms survive long enough.
5 THE AUTONOMY OF ETHICS
Ethics is one of the fields that philosophy is mostly interested. However, what is the
place of ethics in philosophy? Is it a separate science or discipline? Or is it a subset of another
discipline? “Ethics, as a practical discipline of philosophy, is in a close relationship with other
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practical and theoretical disciplines, but it is also an autonomous science as it is a science that
racons with morality on moral relationship both conceptually and categorically.” (Etiğe Giriş,
Annemarie Pieper, çev. Veysel Ataman, p. 85)
The relationship of ethics with social sciences like psychology, with metaphysics and
epistemology is in question considering the autonomy of ethics. There are 3 standpoints here:
naturalism, anti-naturalism, and emotionalism. Naturalism argues that moral judgments can be
reduced to a natural science because according to this argument, the universe does not have a
moral dimension. For this reason, ethics can only be explained by the method of natural
sciences. Ones who support this view regard morality as a branch of natural science or social
science. For them, morality is only related to natural desires and instincts, interests or other
behavioral factors. According to T. Hobber, S. S. Mill, M. Schlick, R. B. Perry, S. Dewey
who favor naturalism, ethics is not an independent or autonomous science. It can be
considered as a branch of a sub science like sociology.
The opposing view of naturalism is anti-naturalism. According to anti-naturalism, moral
judgments aim moral events and means where scientific judgments are related to natural
events and means. Moral judgments cannot be reduced to a science. Plato is the most
significant advocate of this argument.
Between these two views, there is emotionalist view. Generally, rational positivists and,
especially Humo Çatali, support this view.
Ethics share human practice with philosophy and law. This is also the subject of politics
and law philosophy. Ethics, in this regard, is the fundamental science of all other practical
philosophy fields.
Ethics share curiosity and interest to man with anthropology; the problematic of the
location of man in the universe with metaphysics; and the problem of human knowledge’s
formal structures with logic. It is closely related with these sciences, but it is also
autonomous.
6 DEONTOLOGICAL ETHICS
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Rules exist since people have started to live together. Rules are constantly dominant in
every kind of group, family, society, business life, and at school. Individuals shape their life
around those rules. Although rules do not satisfy all of the relevant people, they are inevitable
to assure social order.
The founder of deontological ethics is Immanuel Kant. It was later revised by
Konigsberg the philosopher. According to Kant, ethics is objective and universal. Ethical
principles have been being known for many years and they were similar for everyone.
The ethical principles argued by Kant are those:
a) Ethical concepts are totally constituted as a result of past experiences and it is
impossible to abstract them from experimental knowledge.
b) Even people do not want; they might behave due to coercion or really due to the fact
that the action is good. However, it should not be forgotten that real ethics cannot be legal or
coercion.
c) Individuals should base on the principles and rules that restrict themselves. This
causes moral rules be valid and accepted by everyone.
d) The way of behaving virtuous passes through behaving in compatible with the
principles. Virtue can be defined as moral perfection, integrity, and honesty. According to
Kant, too, taking principles into account is the thing that every person has to do.
e) A life with full of virtue should be preferred to joy.
f) Attaining virtue should be all individuals’ ideal and they should strive to do it.
g) Virtue is possible for individuals by comparing them to themselves. Perfection can
emerge only by this way.
h) What is right for individuals is not adapting moral rules to their behaviors but
obeying them.
ı) According to Kant, ethical rules are valid for everybody. Briefly, the principles on the
ground of actions should be universal.
j) People have to know to build empathy among interpersonal relationships. They
should not just take their goals into consideration. They should not consider counterparty as
the medium to attain the goal.
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7 ETHICS - MORALITY
In many languages, ethics and morality are used as synonyms. This is due to their
similar meanings although their origins are different. However, they mean different things,
indeed.
Ethics was derived from “ethos” meaning “character” in Greek. Briefly, it can be
defined as “morals science”. The morality concept in Turkish is taken from “moral” word in
Latin. The word of “morality”, adapted into our language from Arabic, was derived from
“hulk” and means “temperament, manner, character”.
Ethics is, indeed, more special and philosophical than moral rules which are broader in
the society. Morality is relative and changes from society to society. Even the moral rules that
different groups in the same society adopt might be deeply different. However, ethics is
individualistic. It varies from person to person. Morality, which is the plural of “hulk”,
includes the spiritual principles and rules that must be obeyed in interpersonal relationships.
The effect of morality emerges as implementation force and one’s scruple. According to
Frolov, morality is the generally accepted, self-shaped prohibitions and assessments that take
support from habits, customs, morals, and public opinion power towards the needs and
interests of societies. Ethics is the philosophies of morality. Ethics, different from morality, is
the philosophy branch which examines behaviors philosophically, tries to explain and assess
them. (Aslan, 2002, p. 110) That is, the art of speech on morality is called ethics.
While morality determines the rights and wrongs related to cultural values and ideals,
and how to behave, ethics is concerned with abstract concepts and describes what should be
understood from those. Ethical rules are expected to include written rules about a clear and
certain field while morality contains comprehensive unwritten standards about how to behave.
From another point, morality is the practice of ethics, and ethics is the theory of action.
(Cevizci, 2002, p. 5) As morality, which is ethics’ bundle of rules reverberating to daily living
practice, considers practically, ethics approaches with a theoretical point of view. Ethics
requires some of individuals’ needs regarded not only personally, but also universally.
(Russell, 1998, p. 150)
Individuals differ from each other considering moral concepts and value systems. Their
assessment of what is moral or immoral stems from their religious faith and personal
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thoughts. In a society with different ethnic, sexual, national, religious identities, it is natural
different moral mentalities exist. Here, ethics activates. It presents how morality is interpreted
by the individual and what good and bad means to the individual. For this reason, putting
norms forward, legitimating or basing them, although they are identified with ethics as it is
often done today, are not the duty of ethics. Ethics may only be related to basing them, as if it
is. Nevertheless, this difference can be got from the differences in the definitions of morality
and ethics. Morality is the whole of human behaviors and rules of social life which determines
the spiritual duty and responsibilities of individuals to each other and to the society adopted in
a certain period by certain human groups. Ethics is a philosophical discipline studying from
the most moral point what is good and what is bad related to the spiritual duty and
responsibilities of individuals to each other and to the society. For example, if a soldier
captured by the enemy as a war captive tells all truths, that is, he does not lie, it is regarded as
betrayal. However, lying is an immoral behavior. Nevertheless, lying to enemy is accepted as
an ethical behavior.
8 TYPES OF ETHICS
8.1 Meta-ethics
The final level of ethical study or thinking, in other words, third type of ethics is metaethics. Meta-ethics, defined as analytical or critical ethics, expresses contemporary approach.
Meta-ethics is the thought interpreting about the nature of ethics and moral justification,
and examining ethical thinking from the angle of its demands and limits through critical
purposes. “When meta-ethics is considered, not the ethics worlds named as meta-ethics in
Anglo-Saxon languages since the beginning of this century, but considering every
examination and research not related directly to the content of ethics but studying what the
structure of ethical thought is and how the content of ethics is cited, meta-ethics can be
regarded as the scientific concept of ethics.” (Etiğe Giriş, Annemarie Pieper, çev. Veysel
Ataman, p. 80) In this regard, debates like whether ethics is relative or man always behaves
according to his interests are in the scope of ethics.
Meta-ethical expressions about moral judgments are the ones that do not charge value
onto norms considered as facts.
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For example, for Sicilians, under some circumstances that family is dishonored, tailing
feud is a moral duty.
 Moslem morality forbids prostitution.
 Lying is inappropriate in Turkish morality.
This type of expressions is important ethically as they assure the empirical material
needed to determine the moral concept of ethics. However, meta-ethical expressions could be
revived in other sciences like history, psychology, sociology. That is, meta-ethical
propositions are relevant when the propositions which do not make assessment or include
normative requests, but suggest something about values and norms are revived. Meta-ethical
propositions do not assert any claim on morality and issues related to it but argue about
ethical phrases and systems.
8.2 Normative Ethics
Normative ethics is one of the types of ethics. Normative ethics, which targets to
provide guidance to actions, shortly traces to define the processes to answer “What should I
do?” It is the process of deciding on the scope of moral actions. The theories of Kant and
Bentham about normative ethics contain approaches to guide actions. Undoubtedly,
descriptive ethics has become a rule identifier or a normative discipline. However,
description, classification, and explanation are not adequate. Whereas, normative ethics
studies the moral principles that state how we should live, discusses what elements a fair
society has to contain, looks for answer to that what requires to define a person as morally
good. For example, is capital punishment morally right? Or under what circumstances, is
euthanasia morally appropriate?
As it can be understood here, normative ethics has two levels of which one of them is
totally theoretic, and the other one is largely practical. Normative theory as first level tries to
determine the basic moral principles; however, the second level of normative ethics is applied
ethics and it discusses general issues related to special fields, applies general moral principles
to special fields.
8.3 Descriptive Ethics
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It is actually the first type of ethics that should be mentioned. It is a consequence of the
application of scientific approach to the morality field. Rather than noticing norms or
identifying rules, it just describes the results of actions by observing people’s actions.
Accordingly, descriptive ethics deals with events or facts that happen or should happen rather
than values around the context of morality and moral action. Sociologic or psychological
events about moral beliefs are expressed. Here, the spectator role is undertaken. Observation
and description are important. Observation, description, and explanation in the scientific sense
figure. The philosophical extent is not included. For instance, it does not look for an answer to
whether joy is good or bad. It looks for answers to questions such as “What is joy?”; “What
kind of an experience it is?” or “How is joy sensed?” That is, the event is studied not
philosophically but scientifically. Psychology and sociology are very helpful in this regard.
To illustrate, in sociology, it can be seen what values does a society put forefront, what does
and does not it like, which moral principles and behaviors does it consider important.
However, in descriptive ethics, there is not interpretation; it just describes, explains.
8.4 Applied Ethics
The most controversial issues discussed today about ethics are in the field of applied
ethics. While other ethics branches have been being expressed more abstractly, applied ethics
is employed in practice. It deals with the reflection of ethics in various fields in daily life. In
one way, it transforms ethics into flesh and bone. Surely, both the content of ethics and the
debates about it have increased as business fields have expanded. Arguments about applied
ethics are being conducted by everyone while ethics is being discussed more scientifically
from other angles. People from every segment opine about this issue and produces different
approaches.
“Applied ethics is interested in developing criteria for discussing ethical problems
emerged at certain special fields and applying those criteria to the human behaviors at those
special fields.” (Eğitim ve Öğretimde Etik, İnayet Aydın, 2003, p. 18) Applied ethics fields
have expanded as especially information age and technology have improved rapidly. 1960s
became a milestone. Ethics is relevant in business ethics and in many professional ethics
under it. Serious studies have been being conducted in many subjects like ethics in medicine,
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politics, law, education, engineering, commerce, research and intensive effort has been being
spent for especially developing code of ethics.
8.4.1 Ethics in Medicine
Recently, most controversial debates are about medicine. The progress in medicine, the
variety of diseases, and the increase in the solution and cure alternatives caused ethics and
right discussed. For example, is euthanasia for a patient who is in a big pain ethical? If it is
needed to define ethics in medicine, it is concreting the general norm of doctor’s operation as
assistance to needy. The rights of the person who needs aid take an important place between
ethical debates. In this case, the doctor is responsible for, without hurting the patient and with
obtaining his/her consent as possible as it is, protecting his/her health and using necessary
equipment and means to enable him/her recuperate again.
Deontology is the field that determines the attitude and behaviors of medical doctors in
medicine ethically. This word, meaning “responsibility knowledge” in Ancient Greek, has
privatized for medicine though it is general. The first written code of medicine was in
Hammurabi, in Mesopotamia. Doctors who damage patient rights were punished. Today, the
most significant code is “The Oath of Hippocrates”. Important ethical discussions about ethics
in medicine are abortion, euthanasia, vegetative state, cloning, vital operations like brain
operations, manipulation of heredity material, artificial seminal, transplantation, experiments
taking man as subject, critical care patients, responsibility for information, and tutelage.
8.4.2 Ethics in Politics
Ethical debates in politics gained a different extent with the spread of democracy in the
world in general. The confidence problem of the public in politicians, defined as “The
infestation of politics”, is keeping ethics in politics issue alive. What is really meant by ethics
in politics is “asking individuals who are named as politicians and have this management
ability to accomplish their duties in compatible with some ethical principles.” (Yönetsel,
Mesleki ve Örgütsel Etik, Doç. Dr. İnayet Pehlivan Aydın, 2001, p. 78) “Political
retrogression” concept has gained importance with the increase in conflicts of interest and
allocation problems in politics. However, according to the constitution of Turkish Republic,
parliamentarians take an oath starting their job and they, in one way, promise to behave
ethically in this period.
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Fraud in politics is also a concept related to ethical debates. Political fraud which is
defined as “using public authority obtained related to political functions against legal
arrangements by looking after interest in the management or politic formation process.”
(Berkman, 1983, p. 18) emerges at 4 stages: legislation, execution, judiciary, and election.
8.4.3 Ethics in Law
Law is the whole of rules supported with public power regulating the society. Ethics in
law should also be taken into account. In this case, ethical behavior of lawyers, prosecutors,
and judges both professionally and conscientiously is crucial for the continuity of “Justice is
the foundation of state.” approach in society. Besides, regulations are handled around law and
ethics.
8.4.4 Ethics in Science and Research
Technology and scientific studies, inventions which shaped the 20th and 21st century
cause ethics be contemporary in science and researches, too because it is often asked whether
every invention is in compatible with ethic rules. However, the answer of this question is not
so easy. Honesty in scientific studies discussions and “fake, made-up” are important problems
of ethics in research.
8.4.5 Ethics in Public Management
Statesmen have to protect the interests of the society they manage more than their own
interests. However, it is frequently seen that these authorized executives display attitude and
behaviors in favor of themselves. That is why, since the existence of “state” concept, it should
be discussed what is right and ethical in public management. Indeed, statesmen face with
circumstances that their personal and professional honesty are tested every day. Unethical
behaviors like wastefulness, fraud, and abuse of authority hurt state and society, thus. That is
why statesmen must avoid those.
CASE 1: THE ATHENIAN OATH
"We will never bring disgrace to this our town, by any act of dishonesty or cowardice,
nor ever desert our suffering comrades in the ranks; we will fight for the ideals and sacred
things of the town, both alone and with many; we will revere and obey the town's laws and do
our best to incite a like respect in those above us who are prone to annul or set them at naught;
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we will strive unceasingly to quicken the public's sense of civic duty, thus in all these ways
we will transmit this town not only less, but greater and more beautiful than it was transmitted
to us."
This oath was made up by Athenian society in ancient age. In fact, this is still valid,
today and the behaviors that the statesmen should refer to are told. Looking at the text, it is
pointed out that cowardice and dishonesty are unethical in protecting public service;
executives have to preserve their dignity and their country’s honor; it is essential to undertake
individual and social responsibilities for the ideals of the country. “The emplacement of
mutual respect in the society and the transfer of the country they live to the next generations
more supreme and developed than it was they were taken over are proclaimed as fundamental
values.” (Yönetsel, Mesleki ve Örgütsel Etik, Doç. Dr. İnayet Pehlivan Aydın, 2001, p. 127)
CASE 2: USA STATESMEN ETHICAL RULES
1) Show obedience to most supreme moral rules and to your country before people,
political parties, and government authorities.
2) Show respect to and protect the constitution, laws, and regulations.
3) Work full day for the pay you get for full day; try to do your best when doing your
job.
4) Find the most effective solution means to do duties and employ the people to do duty
best.
5) Never engage in unfair behaviors to provide exclusive interest for you or for others;
never accept interests and benefits offered to you or to family members while performing
public service.
6) Never make a promise to oblige a government authority when doing your job as a
statesman.
7) Do not engage in any commercial relation with the state directly or indirectly.
8) Never use the secret information you learn when doing your public duty for your own
interests.
9) Make corruptions and frauds you see come in sight.
10) Protect and guard all these principles as being aware of the fact that public duty is
crucial for public safety.
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Ethical values in public management, dating on centuries ago through Athenian oath,
almost emphasize the same issues. How a statesman should behave is clearly shown in USA
statesmen ethical rules. Indeed, these 10 principles are valid not only in public management,
but also in all professions. The main principles mentioned here are composed of ethical
elements like responsibility taking in profession, working in honesty and integrity, conducting
duty professionally and professional activities perfectly, showing respect to human and
protecting the integrity of human, adhering to equality and justice principles, obeying
confidentiality principle, being open in professional activities and undertaking accountability,
and improving the self in profession constantly.
These arrangements were started in USA by International City/County Management
Association (ICMA) in 1924. Today, 36 states had determined their own ethical values. First
ethical principles made up in 1924 were updated in 1938, 1952, 1969, 1976, and 1987.
CASE 3: ETHICAL PRINCIPLES IN LOCAL AUTHORITIES
“Pirellas district ethical principles” is given below to illustrate how local authorities can
develop an ethical principles series:
“We, Pirellas district employees, as public servants, are adhered to competency,
honesty, high standards, and personal integrity principles to inspire confidence and belief. As
a result, we will behave with respect to the principles below:
1) Maintaining equal responsibility, respectful service, and open and easily attainable
administration to all citizens,
2) Getting only the pay as the legal return of our job, refusing all gift and donation
offers of the individuals we make business kindly,
3) Declaring or reporting to the authorities the interest relations occurred or perceived,
4) Obeying all laws and regulations accepted by the district administration and applying
these to everyone objectively,
5) Neither accepting nor applying favoritism, partisanship, or any improper effects,
6) Using district resources and money including time, equipment, and material
effectively and efficiently,
7) Protecting and claiming the information we have as a part of our job, not using it
against others or for realizing something”
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8.4.6 Ethics in Sports
A sport is a physical activity done through game, contest, and challenge mentality
aiming to improve physical condition. (Büyük Larousse) At first sight, it can be considered
that ethics in sports is an oxymoron because sports are attached to rules and violating these
rules ends with disqualification or elimination. Moreover, partiality is an important modifier
in sports. Unethical sportsmen lose their supporter. However, industrializing sport mentality
and ethical behavior are gradually contradicting with each other. Chicane, doping, violence,
intentional mutilation, acts to spoof the referee are widely dispersed. Substituting professional
sports mentality for amateur sports mentality has rendered materialism significant and
machiavellist mentalities, in this way, have become to make sports outrageous. “The 4
principles to follow in sports are given below:
1) Sportsmen must be regarded as targets, not means,
2) Competitions must be fair,
3) Participation, leadership, sources, and rewards must depend on success,
4) Sport activities must be in a situation to provide the safety of participants.” (Eitzen,
1993)
8.4.7 Ethics in Mass Media
Press and broadcasting members are referred as mass media means. These means, which
are extremely important for society, should be utilized in compatible with its aim because they
enable the public enlightened, informed, and directed. Today, mass media is maybe the field
that ethics is sought most.
8.4.8 Ethics in Education
“Education is, in its broadest meaning, is defined as the process of bringing in the
individuals desired behaviors through their own lives.” (Yönetsel, Mesleki ve Örgütsel Etik,
Doç. Dr. İnayet Pehlivan Aydın, 2001, p. 135) Here, the “desired behaviors” phrase is an
issue on which ethical debate is never over. Considering that education directs a nation’s
future, ethics in education is crucial. Turkish education system is very troublesome
considering this. Especially, justice in education is a problem that has not resolved for years.
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9 THE RELATIONSHIP OF ETHICS WITH OTHER
BRANCHES
9.1 ETHICS AND CULTURE
Considering various countries, many differences among the valid ethical rules draw
attention. One of the important reasons of them is culture. It is inevitable to see a
differentiation in the point of view to ethics, which varies from person to person already,
among different cultural groups. To illustrate, interpersonal relationships in Western societies
are much more stuck to rules than they are in Turkish society. Considering the mentality on
man-woman relationship in conservative countries and others, there are discrepancies,
undoubtedly. While code of ethics is constituted or accepted commonly, there are disputes
about what ethical behavior is even among the subgroups in the same country. This causes
ethical issue considerations raised with the migration of people. For example, the difference in
ethical mentality may create cultural shock for an individual who is coming from Moslem
culture and migrated to a Christian country. The difficulty in assuring cultural harmony, that
is the severity of the difference between two countries, even increases the crime rate.
9.2 ETHICS AND RELIGION
Ethics has been in a close relationship with religion since ancient times. Religion even
sometimes dominated ethics. Religious rules and ethics were mostly nested and they did not
contradict with each other. If there was a contradiction, it caused stress and disharmony for
the individual. Individual, who was indecisive about the one to obey, could have resolved the
issue by his/her conscience. However, if there was a strong pressure from society in favor of
religion, s/he might prefer religious rules to ethical acceptances even if s/he did not want, but
it would create a distress as s/he was not comfortable conscientiously.
Ethical rules are naturally shaped around the culture, vital accumulation, history,
geographic characteristics of society. Religious rules should be added right here. Especially,
the rules of three main religions have drawn the limits in the development of ethical code
from the beginning. For instance, an acceptable behavior in Christianity is accepted ethically
in the life of an Italian but the same behavior may be regarded as inglorious religiously in Iran
which has adopted Islam. In this case, it is clearly seen that how religion limits ethics.
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Especially together with the belief that ethics was God-based in mediaeval age, religion-based
ethics substituted for rational ethics. Thus, many ethical rules changed, the “ethics” ideas of
individuals reformed, and thinkers became both the creator and tracker of this scholastic
thought. This type of ethical basing is called theological basing. “Good” was defined in
mediaeval age as living with respect to God’s will and searching for God; moral life was
arranged according to God’s orders. That is, “good” was being in harmony with the control
will of God, “bad” was being against God’s demand, forgetting God and worshipping
material. This required executing certain rules which were instructed via the intermediary of
God, the prophet. For example, there were 10 of those rules in Old Testament: Do not worship
fake gods, show respect to your parents, do not commit murder, do not fornicate, etc. Here, in
those cases, the importance of religion shows itself both in the shaping of ethics and morality.
9.3 PROPRIETIES AND ETHICS
Proprieties are behavior forms covering politeness and have less sanctions by society
compared to other rules. For instance, using slang language in public is against proprieties.
The sanction varies depending upon the extent of solecism. Condemnation, ostracization,
warning are various sanctions. There are also various proprieties for business life. For
example, punctuality and well-dress are among good manners in business life. Some protocol
rules are also among those.
Proprieties and ethics are generally in parallel with each other. That is, solecism can be
defined as unethical. However, this relationship is not so strong. To illustrate, customary
practices for dinner are among proprieties. However, obeying or violating them cannot be
assessed ethically. Giving way to ladies is also propriety but again has nothing to do with
ethics. Some behaviors are both unethical and against proprieties. For example, if an
executive addresses to woman employees unhandsomely, this is both unethical and against
proprieties.
10 ETHICAL APPROACHES
10.1 UTILITARIANISM
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It will be the best for us to begin to explain ethical approaches with the one, which has
the most usage in business ethics, utilitarianism. According to this approach, an action is right
from an ethical point of view if and only if the sum of total utilities produced by that act is
greater than the sum of total utilities produced by any other act the agent could have
performed in its place. Simply, utilitarianism can be said to be the approach in which the
decision maker tries to give the decision that produces most utility for everyone. This means,
thinking about every result of the decision, assessing utilities for these results and evaluating
these results with a cost-benefit analyze.
Many business analysts agree that using utilitarian approach is the best way of
evaluating the ethical propriety of a business decision. Because, utilitarian principle assumes
that we can somehow measure and add the quantities of benefits produced by an action and
subtract from them the measured quantities of harm the action will have, and thereby,
determine which action produce the greatest total benefits or the lowest total costs, which is
gained by all stakeholders, affected by that action. Satisfying stakeholders as much as possible
is one of the important objectives of the business to be successful so utilitarianist approach
can also help the managers by this manner.
The cost-benefit analyze is, as it is said above, a simple calculation which sum up all
benefits’ utility and subtract costs or losses from that. These benefits and costs are not the
ones just only about the person performing the action, but all of the people affected by this
action. Secondly, when the utilitarian principle says an action is right, it does not mean sum of
the benefits exceeds sum of the costs; but it means this action has the maximum total utility
between the utilities produced by another possible action at that situation. It is just a
comparison. A third misunderstanding is to think that utilitarian approach requires us to
consider only the direct and immediate consequences of our actions. In stead, both the
immediate and all foreseeable future costs and benefits that each alternative will provide for
each individual must be taken into account. Last to say, benefits or costs mustn’t be reduced
to economic costs and benefits. Benefits of an action may include any desirable goods
(pleasures, health, lives, satisfactions, knowledge, happiness) produced by the action and
costs may include any of its undesirable evils (pain, sickness, death, dissatisfaction,
ignorance, unhappiness). According to the utilitarianism, when a person is making a decision,
he or she has to apply the three steps below to be sure that decision is a proper one:
 Determining what alternative decisions are available
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 Estimating direct and indirect benefits and costs that the decision would produce
for each and every person affected by the decision for each alternative
 Choosing the alternative that produces the greatest sum total of utility
Although it is said above that utilitarianist approach does not only interest in
economical costs and benefits, utilitarian views have been highly influential in economics. A
long line of economics argued that economic behavior could be explained by assuming that
human beings always attempt to maximize their utility and that the utilities of commodities
can be measured by the prices people are willing to pay for them. With these assumptions,
economists were able to demonstrate that a system of perfectly competitive markets would
lead to a use of resources and to price variations that would enable consumers to maximize
their utility through their purchases. On utilitarian grounds, therefore these economists
concluded that such a system of markets is better than any other alternative.
Moreover, utilitarianism is also the basis of the techniques of economic cost-benefit
analyses. This type of analyze is used to determine the desirability of investing in a project by
figuring whether its present and future economic benefits outweigh its present and future
economic costs. If the monetary benefits of a certain public project exceed the monetary costs
and, if the excess is greater than the excess produced by any other feasible project, then the
project should be undertaken. In this form of utilitarianism, the concept of utility is restricted
to monetarily measurable economic costs and benefits. Finally, it can be noted that
utilitarianism fits nicely with a value that many people price: efficiency. Efficiency can mean
different things to different people, but for many it means operating in such a way that one
produces the most one can with the resources at hand. That is, an efficient operation is one
that produces a desired output with the lowest resource input. Such efficiency is precisely
what utilitarianism advocates since it holds that one should always adopt that course of action
that will produce the greatest benefits at the lowest costs.
As the last issue of utilitarian approach, it must be mentioned that some problems are
there which occurs applying the utilitarian approach. First of these is the difficulty of utility
measurement. It is so hard to calculate the utility of any decision or action and moreover to
compare them. A second problem is that some benefits and costs seem intractable to
measurement. How, for example, can one measure the value of health or life? Cost and
benefit items like these can make it difficult to apply utilitarian approach. Third, defining all
costs and benefits of an action or decision and even measure them and assessing utility for
30
each can sometimes be somehow impossible. For example, the beneficial or costly
consequences of basic scientific knowledge are notoriously difficult to predict. Fourth
problem to say is that it is unclear exactly what is to count as a benefit and what is to count as
a cost. This lack of clarity is especially problematic with respect the social issues that are
given significantly different evaluations by different cultural groups. Moreover, the utilitarian
assumption that all goods are measurable implies that all goods can be traded for equivalent of
each other: for a given quantity of any specific good, there is some quantity of each other
good that is equal in value to it. However, critics have argued that there are some
uneconomical goods, such as life, freedom, equality, health, beauty, whose value is such that
no quantity of any economic good is equal in value to the value of the uneconomic good. It
also must be said that, finally, utilitarianist approach sometimes can threaten the rights of
people and the justice. Using utilitarianist approach, one can make a decision against another
one‘s rights. For example, it can be said to be ethic according to utilitarianist approach that if
something produces more utility for you than it produces for the real owner of it, you can steal
it. Or using this approach can ignore justice. it can be said to be ethic according to
utilitarianist approach that in a group of five people, even if only one worked hard and really
deserved the money. As long as other four people or one person from those four people needs
the money more than him or any other way giving the money to him produces less utility than
giving it to other four people or one person from those four people, then you give the money
not to the deserving but to the one who maximizes utility.
Defenders of utilitarianism have some answers for these problems.
First, the utilitarian may argue that, although utilitarianism ideally requires accurate
quantifiable measurements of all costs and benefits, this requirement can be relaxed when
such measurements are impossible. Utilitarianism merely insists that the consequences of any
projected act be expressly stated with as much clarity and accuracy as is humanly possible.
The utilitarian can also point to several common-sense criteria that can be used to
determine the relative values that should be given the various categories of goods.
A second common-sense criterion that can be used to weigh goods turns on the
distinction between needs and wants. To say that someone needs something is to say that
without it he or she will be harmed in some way. On the other hand, to say that a person wants
31
something is to say that the person desires it: the person believes it will advance his or her
interests in some way.
However, these common-sense methods of weighing goods are only intended to aid us
in situations where quantitative methods fail. In actual fact, the consequences of many
decisions are relatively amenable to quantification, the convinced utilitarian will claim. This
constitutes the utilitarian’s second major reply to the measurement objections as previously
outlined.
The most flexible method of providing a common quantitative measure for the benefits
and costs associated with a decision, the utilitarian may hold, is in terms of their monetary
equivalents.
The use of monetary values also has the advantage of allowing one to take into account
the effects of the passage of time and the impact of uncertainty.
A standard objection against using monetary values to measure all costs and benefits is
that some goods, in particular health and life, cannot be priced. The utilitarian may argue,
however, that not only is it possible to put a price on health and life but that we do so almost
daily. Any time people place a limit on the amount of money they are willing to pay to reduce
the risk that some object poses to their lives, they have set an implicit price on their own lives.
Finally the utilitarian may say, where market prices are incapable of providing
quantitative data for comparing the costs and benefits of various decisions, other sorts of
quantitative measures are available.
10.2 ETHICS OF JUSTICE
Justice is the ideal, morally correct state of things and persons. It is another ethical
approach that distributes benefits and burdens among individuals in a fair, equitable or
impartial way. Fairness is an integral part of what most people think of as justice. In fact,
justice and fairness are comparative. “They are concerned with the comparative treatment
given to the members of a group when benefits and burdens are distributed, when rules and
laws are administered, when members of a group cooperate or compete with each other, and
32
when people and punished for the wrongs they have done or compensated for the wrongs they
have suffered.” (Business Ethics, Concepts and Cases, 4th Edition, Manuel G. Velasquez, p.
103)
If justice is compared to utilitarian view of ethics, standards are more important for
justice. For example, when individual is punished from one cause, another one must be
punished in the same way. If his/her fault is heavier than the other’s, his punishment must also
be heavy. Moreover, if, for ex, sanction is harmful for society, it should not be applied
according to utilitarianism. However, for the ethics of justice, this sanction must be applied if
it is deserved. In other words, greater benefits for some cannot justify injustice for others. So,
there must be standards for the justice.
Due to those standards based on individual moral rights, they should not cut across
moral rights. Individual moral rights are the fundament of ethics of justice. Justice deals with
what one deserves from the benefit and burden pool.
It is a popular approach for organizations. Therefore, managers should compare and
contrast alternative courses of action based on the degree to which action will promote a fair
distribution of outcomes. It is crucial to give the same wage (salary) to employees whose
performance is equal. If worker A and worker B have the same qualifications, same tenure
manager should behave in the same way although he has a close relationship with one of
them.
Justice can be handled in three subcategories which are distributive justice, retributive
justice, and compensatory justice:
Distributive justice is interested in the fair distribution of society’s benefits and burdens.
When the number of benefits such as food, shelter, income is not sufficient for people who
desire them or when the burdens of society are too much for people who are eager to
undertake them, distributive justice is in question. Otherwise, there will be no relevance of
distributive justice. The main principle of distributive justice is; “If individuals are similar in
the relevant aspects, they should be given similar benefits and burdens; if they are not, they
should be treated dissimilarly in proportion to their dissimilarity.” (Business Ethics, Concepts
and Cases, 4th Edition, Manuel G. Velasquez, p. 105) However, there is a question here.
What are those relevant aspects? There are some views on this issue.
33
a) Justice as Equality: Egalitarianism: According to this view, each individual in the
society or group should be given exactly the equal shares of benefits and burdens. (Business
Ethics, Concepts and Cases, 4th Edition, Manuel G. Velasquez, p. 106) Although it is popular,
there are objections to this view claiming that people do not have the same degree in a single
aspect and some characteristics are disregarded like need, ability, and effort.
b) Justice Based on Contribution: Capitalist Justice: This view supports that what
should be the basis of an individual’s share of benefits must be the contribution to the society
or group. However, to do this, measuring the value of contribution, which is really hard, is
vital. Work effort, productivity, and market forces of supply and demand are the terms argued
by critics to measure the value of contribution. However, there is one vast thing that this
theory ignores. It is people needs.
c) Justice Based on Needs and Abilities: Socialism: Louis Blanc, Karl Marx, and
Nikolai Lenin, respectively, were regarded as the pioneers of this theory due to their dictum
suggested. Socialism side of justice theory states that people’s abilities should be the
determiner of work burdens and their needs should be the determiner of benefits. The idea
behind the view is that potential, which is a value, can only be realized by exercising ability
so burdens should be distributed considering abilities. However, there is an opposing
argument claiming that if needs, not effort, determine benefits, there will be no motivation to
strive which will decline productivity in return.
d) Justice as Freedom: Libertarianism: Free individual choices are the cornerstone of
the libertarian view of justice according to Robert Nozick, a famous libertarian. He holds that
freedom from coercion is the right of every individual. If an individual is forced to do
something, it is unjust. Thus, this view considers to tax a person unjust as this is obligatory.
e) Justice as Fairness: Rawls: This view has taken its name from the theory of John
Rawls. According to Rawls, when there is a conflict in decision, it should be resolved through
a definite process. This process consists of two steps: In the first step, a fair method to be the
basis of principles should be developed. Then, in the second step, these principles should be
used to guide the decision. Rawls stated that this process, indeed, is constituted by taking two
principles into account to make a just decision. First principle, called as principle of equal
liberty, states that each individual has a right to protect his/her liberties from invasion by
34
others. Second principle consists of two parts. First part, called as difference principle, says
that although there will be inequalities in the society, most needy people who are the disabled,
the handicapped, etc. should be given special importance unless this causes everyone get
worse than before. Second part, called as principle of fair equality of opportunity, argues that
every individual be given an equal opportunity to qualify for the more privileged positions in
society’s institutions (Business Ethics, Concepts and Cases, 4th Edition, Manuel G.
Velasquez, p. 115).
Now, let’s summarize all these views with an example. Suppose there are 10 chocolate
bars and 10 people in a utopian society. Egalitarianism holds that whatever their needs,
abilities are, all people should get only and only a single bar. Capitalist justice view says that
if any of those people rends the self to gain those bars, s/he may be given all the bars provided
that s/he deserves them. What socialism suggests is if any of those people is dying for
chocolate, s/he may again be given all those bars. Libertarianism argues that if those bars
belong to a person of those people, s/he is completely free on the allocation of those. S/he
may give to anyone how many of bars s/he wants to give or s/he will give nothing to them.
Rawls’s theory everybody has a considerable amount right on those bars but if some people
need more those bars than others, they should be given more unless the others’
disappointment outweigh their happiness.
Retributive justice claims that all, and only, guilty people deserve appropriate
punishment. However, in order to maintain justice while punishing the person, some criteria
should be taken into account. First, ignorant or unable people should not be punished. Second,
there must be evidence of guilt. Finally, punishment system must be consistent and
proportionate.
Compensatory justice deals with just offsetting the loss of a person who is wronged by
others. The rationale behind this theory is that the person who damages someone else by
doing a wrong must compensate that person’s loss. Loss and compensation must surely be
equal for the sake of justice but what if the loss is an intangible one? It is impossible to
measure the extent of such a loss. Moreover, some losses cannot be compensated like death.
Compensation is essential if (1) the action that inflicted the injury was wrong or
negligent, (2) the person’s action was the real cause of the injury, and (3) the person inflicted
35
the injury voluntarily. (Business Ethics, Concepts and Cases, 4th Edition, Manuel G.
Velasquez, p. 119)
10.3 ETHICS OF RIGHTS
In general, a right is an individual’s entitlement to something. (Business Ethics,
Concepts and Cases, 4th Edition, Manuel G. Velasquez, p. 87) If it is derived from a legal
system that allows the person to behave in a certain way, it is called a legal right. Entitlements
do not always stem from legal systems. Moral standards should be another source of rights.
The “right to speech” is limited because of the community’s benefits, but some people think
that the action of speech without any restriction is a natural right of humanity. In this case,
they are called as moral rights or human rights. Unlike legal rights, moral rights are not
limited to a particular sentence.
Rights can be understood in several ways. They can be interpreted as absence of
prohibitions, authority, or existence of prohibitions limiting a counterparty to avoid a person
act in a certain way. The moral rights gained through the last way are the most powerful and
important rights among those. They have three important characteristics: First, they are tightly
correlated with duties because what is one’s right is another’s duty. This duty can be in the
form of noninterference or doing something. Second, moral rights enable individuals in the
free trace of their interests, that is, a person with a moral right will be free to follow or not to
follow an activity. Third, moral rights constitute a basis for justifying one’s actions and for
invoking the protection or assistance of others. For example, when a weak person is assisted
by a stronger one to protect his/her needs, this action is justified.
Because of those reasons, moral rights are diversified and differentiated from utilitarian
standards. In general, utilitarian approaches are originated from the society as whole but
moral rights are more personalized and express the requirements of morality from the point of
view of the individual. In other words, the moral right is way of protecting the individual from
the impacts or empowerment of societies. There is no aggregate welfare or utility in the topic
of rights. The most important part is the welfare of individuals. Rights limit the validity of
appeals to social benefits and to numbers. That is, if a person has a right to do something, then
it is wrong for anyone to disrupt, even though a large number of people might gain much
utility from such action.
36
The diversification of negative and positive rights is another important part of right
topic. A large group of rights called negative rights is distinguished by the fact that its
members can be defined wholly in terms of the duties others have to not interfere in certain
activities of the person who holds a given right. (Business Ethics, Concepts and Cases, 4th
Edition, Manuel G. Velasquez, p. 90) The positive rights do more than impose negative
duties. They also say that some other agents have the task of ensuring the holder trace his/her
own interests freely.
Contractual rights and duties are the sources of rights, which can be explained in terms
of business. These are limited rights and correlative duties that emerge when one person
agrees with another one. Specificity is the first thing that contractual rights and duties involve.
Agreements are associated with specific counterparts. Everything is precisely certain in this
case. What one has which rights and duties is clear. Second, contractual rights are the
consequences of a promise. Third, contractual rights and duties are accepted by the public.
Counterparts of the agreement are aware of the fact that they undertake duties and gain rights
with this agreement because the results of the transaction are known by all community.
Modern business societies could not function unless contractual rights and duties are
institutionalized. Soon or late, every firm has to count on the word of some other firm in
business world. Without the social institution of contract, individuals in such situations would
never take place. Thanks to the institution of contracts, firms keep their word, and in return,
business world operates.
What is the basis of moral rights? Utilitarians argue that moral rights exist because their
existence maximizes utility. However, right is an entitlement and it should be regardless of
utility maximization so there should be another source of moral rights. Immanuel Kant put a
theory forward about this issue. He said that all people have some certain rights and duties
regardless of the utility society will gain as utilitarianism follows. His theory based on a
principle called categorical imperative which states that everyone has a moral right to such
treatment and everyone has again the correlative duty to treat others in this way. Kant’s
categorical imperative has two formulas. First one is based on the principle that an action is
morally right for a person in a certain situation if, and only if, the person’s reason for carrying
out the action is a reason that s/he would be willing to have every person act on, in any similar
situation. (Business Ethics, Concepts and Cases, 4th Edition, Manuel G. Velasquez, p. 94) For
example, I cannot decide whether to fire an employee just because he is black. According to
37
Kant, what I should ask myself is whether I will want an employer to fire me just due to my
race. This will help me to give the right decision. Second one says that an action is morally
right if a person does not use other people as means to attain his/her interest but respects
them.
10.4 ETHICS OF CARE
Suppose there is a fire in your building. While you are just about to leave the building,
you see that, for ex, your mom and a person are lying on the floor. Which one will you
rescue? According to utilitarianism, you should rescue the one who will produce the biggest
utility to the society. In this case, if that person is a teacher, for ex, and your mom is just a
housewife, you should disregard your mom’s screams and save that person. However, there is
an indispensable relationship of love and caring with your mom and your conscience will not
let you get out of that building without your mom.
As this example shows people have an obligation to exercise special care toward those
particular persons with whom we have worthy close relationships. This theory is known as
“ethics of care”. Feminist ethicists, Carol Gilligan mostly, have developed this theory. They
claim that women approach ethical issues from a nonindividualistic focus on relationships and
caring.
Ethics of care underlines two moral demands: First one says that “We each exist in a
web of relationships and should preserve and nurture those concrete and valuable
relationships we have with specific persons.” Second one enriches first principle by telling
that “We each should exercise special care for those with whom we are concretely related by
attending to their particular needs, values, desires, and concrete well-being as seen from their
own personal perspective, and by responding positively to these needs, values, desires, and
concrete well-being, particularly of those who are vulnerable and dependent on our care.”
Ethics of care is based on the belief that what makes one the self is the relationships
with others. Without them, one is nothing. In our life cycles, all we contact with some people
from infancy to senility such as our mom, dad, friends, relatives, etc. All of them assist us;
even they are the cornerstones of our lives. What makes us must have an inestimable value
which should not be disregarded.
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Sometimes care and justice contradicts with each other. Suppose you are a manager of
several people including a friend of yours. If you take an order to promote one of those
employees, what would you do? Would you suggest your friend even if one of the other
employees is more qualified for that position or would you act objectively ignoring your
friend? There is no simple answer of this question, indeed.
Although it seems decent and valid, there are, undoubtedly, some critics about the ethics
of care. For example, it is claimed that this view can be degenerated and turned into unjust
favoritism. (Business Ethics, Concepts and Cases, 4th Edition, Manuel G. Velasquez, p. 126)
It can be taken as basis to exhibit, for ex, favoring someone from your race as acceptable
which is not a just thing actually. They also argue that when one is striving to take care of
his/her precious, s/he may engage in actions devoting the self. However, proponents of ethics
of care say that individuals keep the balance in this case.
11 MACHIAVELLIANISM
Machiavellianism is primarily the term some social and personality psychologists use to
describe a person's tendency to deceive and manipulate others for personal gain. The concept
is named after Renaissance diplomat and writer Niccolò Machiavelli, who wrote Il Principe
(The Prince).
Machiavellianism is not an ethical approach. It is indeed a character trait. In other
words, you neither favor nor disfavor Machiavellianism. Instead, you are either high or low in
Machiavellianism. High Machiavellians tend to take a more detached, calculating approach in
their interaction with other people. They tend to believe most people are concerned only with
their own well-being and to depend too much on anyone else is foolish. They believe some of
the most efficient ways to achieve a goal are to use deception, rewards, promises, flattery, and
even punishments to manipulate others into doing their bidding. To them, power may be more
important than love. Low Machiavellians tend to take a more personal, empathic approach in
their interaction with other people. They tend to be more trusting of others and more honest.
They believe humans are essentially good natured. At the extreme, low Machiavellians are
passive, submissive, and highly agreeable. They also tend to believe that everyone has a good
and bad side, but most are kind.
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In cognitive science and evolutionary psychology, Machiavellian intelligence (also
known as political intelligence or social intelligence) is the capacity of an entity to be in a
successful political engagement with social groups.
Machiavellian intelligence may be demonstrated by behaviors including:
 Making and breaking alliances
 making and breaking promises
 making and breaking rules
 lying and truth-telling
 blaming and forgiveness
 misleading and misdirection
Machiavellianism is associated with the typical behavior of today’s business world. In
today’s highly competitive world, business people have to be aggressive and entrepreneur.
Here, the rules of nature are valid, idiomatically. According to high Machiavellians, business
ethics is an oxymoron. Everything is legitimate in business life. The way on goal should not
have to be the most just one, indeed. The only thing they consider is them. This looks like the
point of view of a shareholder. Just like Machiavellians, what they just think of is their
interest and for this reason, they account every transaction to attain their goal as fair.
However, there is one thing they miss. Although it is true that businesses exist to earn money
and have profit, they cannot do this on its own. They have to make use of their stakeholders
and while doing this they should not consider them as just the means. Otherwise, they will be
deprived of them. So, business ethics is, indeed, not an oxymoron.
12 BUSINESS ETHICS
12.1 WHAT IS BUSINESS ETHICS?
Business ethics is generally a special application field of ethics. Ethically considering,
the “right” and “wrong” concepts have been being examined by being specialized around
business life. Business ethics is related to values such as honesty, respect to environment,
equity, resistance to injustice, and etc. The focal point of the business ethics is the subject of
how the ethical standards will be applied for business policies, institutions, and behaviors.
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All definitions trying to explain business ethics include the rules, standards and ethical
principles about what is “right and wrong” in a situation. For example, Lewis (1985)
describes business ethics as “rules, standards, codes, or principles that provide guidelines for
morally right behavior and truthfulness in specific situations” and Nash (1994) defines
business ethics as “the study of how personal moral norms apply to the activities and goals of
commercial enterprise. It is not a separate moral standard, but the study of how the business
context poses its own unique problems for the moral person who acts as an agent of this
system.”
Although Nash said that business ethics is a study of “personal moral norms”, it is not
the individuals’ personal ethics and values that determine whether a specific behavior is in
compatible with ethics; but it is the society which contains mass media, interest groups, and
organizations.
Different from these definitions given above, business ethics can be described as the
sum of the ethical principles and standards directing the behaviors in the business life and
guiding them.
Business world is the world of purchase and sale of goods and services. Business also
means money, profit, and success. For some people, business world is just composed of these
and these people generally put these ideas forward concerning business world.
 The captain saving his ship.
 Do whatever as long as you are not caught.
 Whom honesty has made rich thus far?
 Everybody is doing; why shouldn’t I?
 Does anyone not deceiving in business life?
 Ambition is everything.
These phrases display a very pessimistic view as if the whole business life is managed
according to these principles. However, in reality, the business world has good and bad sides;
like everything, it has rights and wrongs.
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Businesses fall into some dilemmas while applying ethical standards in their own
operations. That is, they may be classified as “ethical” or “unethical” due to their acts just like
individuals. Can they be held “ethically responsible” for their acts just like people? Do just
people individually affect real ethical events? Is it fair to charge businesses with ethical
notions such as responsibility, duty, and liabilities? It is possible to increase the number of
such questions. However, businesses are composed of people. If the business is charged with
responsibility, the actual responsibility belongs to people in the organization.
Business ethics is a controversial notion also because some people think that it is a
cornerstone of any future more or less prospective company’s strategy while others perceive it
like an oxymoron (the quibble of using two antonyms together to define a different concept).
As it is mentioned earlier, unlike morality, ethics is a notional concept, that is, every
individual has a different cognizance of ethical principles. What is unethical for a person may
not be, and probably, will not be unethical for another. That is exactly what the situation is
considering business ethics. To illustrate, in an office, it may be forbidden to bring children
there. However, if the employees do not share the same idea and think that it will not be
inappropriate to do that, they will not try to avoid such behavior; at least, they will not be
ashamed of such a behavior. In this case, it will be a sweat to develop an ethical culture within
the organization.
How about the emergence of business ethics? Business ethics has begun to be
considered as a management discipline, especially since the birth of the social responsibility
movement in the 1960s. During that period, due to the progress in social awareness,
businesses were expected to give reaction to problems such as poverty, crime, environmental
protection, equal rights, public health and improving education by using their enormous
influence. There was a common opinion that if the businesses were making a profit and
making sales thanks to the country’s resources, they had to work to improve society. The
“stockholder” approach was tried to be replaced by the “stakeholder approach”. Also, as
commerce became more complicated and dynamic, organizations realized they needed more
guidance to ensure their dealings supported the common good and did not harm others; that is
how business ethics was born.
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Why engage in ethical behavior? Businesses primarily exist to maximize shareholders’
wealth and to survive. So, do they have to take ethical principles into consideration when
trying to achieve this? Indeed, yes, they have to because if they do not, they may face with
serious costs. Major corporate scandals in the world like Enron, Tyco International,
WorldCom, Global Crossing and Adelphia showed all businesses the importance of being
ethical. Besides quantitative costs, there are also non-quantified costs and risks which can be
counted as (1) increased risk of doing business and the possibility of bankruptcy and severely
damaged company brand and image, (2) decreased productivity, (3) increased misconduct and
conflict internally, (4) decreased performance levels of employees, (5) increased employee
turnover and more challenging employee recruitment, (6) decreased productivity, (7)
increased absenteeism and “presenteeism”, (8) decreased probability of reporting misconduct
and unethical behavior of others, (9) increased dysfunctional behaviors such as not paying
attention to details, scapegoating, withholding information, under delivering & over
promising, not giving credit to others, lowering goals, misrepresenting results, etc., and (10)
decreased value of company.
12.2 THE
HISTORICAL
DEVELOPMENT
OF
BUSINESS
ETHICS
Richard T. De George, one of the professors studying on ethics, examined the
development processes at five steps during his business ethics studies in South America.

Before 1960

1960s

1970s

1980s

1990s
1) Before 1960
USA got through many adversarial phases questioning the “capitalism” concept before
1960. In 1920s, together with the movement regarded as “progression movement”, “living
wages”, defined as the income to be adequate for education, entertainment, health, and
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pension, were strived to be provided to the citizens in USA, too. Enterprises were requested to
be careful about unfair price increases and other applications that might endanger a family’s
subsistence wage. Due to the problems the country faced with in 1930s, the “New Deal”
program accusing especially enterprises was brought into force. They were requested to work
with the government closely to increase family revenues. In 1950s, “New Deal” program was
reconfigured as “Fair Deal” program by President Harry S. Truman. This program was
intended for civil rights and for ethical topics like the environmental responsibilities of
enterprises.
Before 1960, the ethical problems related to businesses were generally handled in
regard to religion. Religious leaders had put forward problems about equal pay, work-related
applications, and the morality of capitalism. While the catholic social ethics, which was
mentioned in “Papal Encyclicals” series, was emphasizing humanistic values rather than
materialistic values, it was also serving to improve the poor’s living conditions and including
issues like the employee rights, subsistence wage, and business morality. Some catholic
colleges and universities started to give lectures on social ethics. Protestants also started to
give courses about ethics at theology schools and their seminars, and they wended their way
in business life towards “ethics” and “morality” concepts. While the Protestant business ethics
was encouraging individuals to be hardworking and frugal, it was also succeeding in the
capitalist system. This kind of religious customs were a basis for the future of business ethics
field. Every religion applied its own moral concepts not only to the business life, but also to
the community, politics, family, personal life, and all fields of life.
2) 1960s: The Trend of Social Issues in Business Life
In 1960s, the American society headed for reasons. Anti-business attitudes were
developed as the criticisms attacking the earned rights which kept the economic and political
sides of the society under control rose. 1960s had witnessed the deterioration of city centers
and the increase of environmental problems like nuclear wastes and pollution. In 1962,
President John F. Kennedy issued a special declaration related to the protection of consumer
rights. In this declaration, three fundamental consumer rights which are right of safety, right
of choice, and right of intelligence were denoted. These are known as “Consumer Rights
Declaration”.
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The presentation of “Unsafe at Any Speed” in 1965 by Ralp Nader who criticized
generally automotive industry, especially General Motors enterprise, as it was making profit
by endangering people’s lives and safety is regarded as the beginning of modern consumer
action. Corvair, manufactured by this business, was the focal point of criticisms that Nader
addressed. Generally, the consumer protection organization of Nader, known as “Raider”,
strived hard for the establishment of arrangements requiring automobile manufacturers equip
automobiles with safer belts, backing control panel, stronger door ratchets, caps, and
undisplaceable windscreens.
Together with Johnson’s come as President after Kennedy, national capitalism
widespread more around “Great Society” approach. Johnson, addressing to the business
world, pointed out that the responsibility of US government had been to provide an economic
balance to its citizens to a degree. The activities that might unbalance the economy were
started to be considered as unethical and illegal.
3) 1970s: Business Ethics as a Rising Work Field
Business ethics was begun to emerge as a work field in 1970s. Reverends and thinkers
made a ground by claiming that certain religious principles could be applied to business
operations. After that, business administration professors began to write and give lectures
about the social responsibilities of enterprises. Philosophers entered this field by applying
ethics theory and philosophical analysis to the structure of business ethics discipline.
Enterprises became to be seemed more interested in their image in public mind. Besides,
many of them realized that they had to address ethical topics directly as social needs had
increased. Conferences in which the social responsibility, ethics, and morality in enterprises
were discussed were started to be arranged. Centers dealing with business ethics issues were
founded. Meetings among disciplines gathered business administration professors, reverends,
philosophers, and businessmen together.
At the end of 1970s, several basic ethical issues like bribery, hype, price collision,
product and environmental safety emerged. As business ethics had become a general phrase
covering all of these, it was no more considered as an oxymoron. Academic-based researchers
began to carry out studies trying to define ethical issues especially in management and
marketing fields and to present how businessmen could behave on certain situations.
However, a very limited effort was shown putting how ethical decision making process
operated forward and defining lots of variables which affected this process.
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To illustrate, in 1970s, it was seen that rationalism and positivism had not been used in
the influential definition of modernism. According to the scientific mentality of modernism,
for example looking through the positivism point of view, it was also discussed how
businessmen’s style of approach to the ethics should be. Considering positivism, the reasons
directing businessmen to a research and ethical tendencies were not creating a problem. The
selection of a subject as it was good or bad was not against science. Businessman was closing
his doors to the world called ethics since he started to engage in search. After research was
over, how and where he would use only remained as an ethical choice problem. That is,
according to the positivism approach of modernism, businessman did not drop ethics; but, he
excluded ethical worries from research field.
4) 1980s: Unity in Beginning
In 1980s, academicians and pragmatists studying in business administration accepted
business ethics as a work field. Various groups with different interests of which their numbers
were gradually increasing enable business ethics field progress. Many of the leading
corporations like General Electric Co., The Chase Manhattan Co., General Motors, Atlantic
Richfield Co., Caterpillar Inc., and S. C. Johnson-Son. Inc. established ethics committees and
formed social policy groups intending ethical issues.
In 1980s, opinions that the economy should be directed not by the government in
Reagan, Bush term, but by competition dominated. For instance, many tariffs and trade
barriers were removed. Enterprises gradually mixed in global atmosphere, disappeared, and
were divested. So, business rules altered incredibly rapidly due to this new atmosphere. For
example, corporations founded as national started to operate internationally and found
themselves in value structures that they could not get.
5) Business Ethics in 1990s
Reagan, Bush term replaced with Clinton term during which the American government
traced a compromise-sided leadership style for the aim of American corporations compete
with foreign corporations equally. Consequently, tariffs on competitive products like steel and
other goods were not raised any more as multinational. EC’92 and NAFTA became a norm.
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Free trade and open competition substituted with limited trade and controlled competition.
More enterprises were building up joint ventures with their competitors and domestic
governments were carrying out their operations thanks to the aids coming from abroad. In
1990s, governments became an integrated part of the businesses’ global competition
strategies.
Today, business ethics has been becoming a work field of business operations related to
morality. Business ethics, rather than simply emphasizing on what should or should not be
done in certain situations, is setting up systematic relations among morality, responsibility,
and decision making in businesses. Ethical decision making process in business operations is
being handled around philosophical, economic, sociologic, psychological, and religious ways.
Executives and researchers studying in this field are trying to develop systematic guides that
may help individuals and organizations in ethical decision making.
As the world is continuing to shrink technologically, businesses are gradually engaging
in more relations with other cultures which do not have similar values. As a result,
multinational corporations are, not understanding the reason, under the risk of being more
involved in ethical collusion.
In future, business ethics will not operate around an international ethics agreement
because accepted business ethics change from one culture to another. So, universal business
ethics standards are not valid. Instead, multinational corporations will engage in ethics
management and ethical collusions. The future will create more variations considering ethical
issues and it will force executives who will need to understand ethical decision making
process better contend more.
12.3 LEVELS OF BUSINESS ETHICS
The levels of business ethics, relates to the multi-dimensional nature of business ethics.
Barkhuysen and Rossouw (2000:230) state that “Business ethics studies have ethical
dimensions of economic activity as it is being manifested of three different levels”. These
three dimensions or levels of inquiry are, according to the authors, the following:
a. Micro-level: the ethics of businesspersons or members of the organization, internal
constituents. This level focuses on the problems with decision making by individuals in a
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business organization. Shaw in Barkhuysen (1999) calls this the level on which individuals
are moral agents and takes responsibility for their decisions or their ability to make decisions.
b. Meso-level: the ethics of business organizations, external constituents. This entails
the ethics of the organization in terms of the relationship it has with the government, the
community and the environment.
c. Macro-level: On this level, there is a focus on the morality of the complete economic
system. Becker in Barkhuysen (1999) mentions that business ethics on this level refers to the
patterns of social, political and economic powers that works in on individuals and
organizations.
12.4 ETHICS AND STAKEHOLDERS
As it is mentioned earlier, there are two opposing views for the existence reason of
businesses. One view, called the classical view, argues that the management’s only social
responsibility is to maximize profits. This view supports “shareholder approach”. The best
defender of this argument is Milton Friedman who claims that the management should do the
best to increase the well-being of shareholders. Although he says that management should not
fully disregard social responsibility, he insists that the shareholders are superior in this regard.
Other view, which is called the socioeconomic view and is more popular, supports that
management’s social responsibility goes beyond making profits to include protecting
improving the society’s welfare. This argument is based on the fact that businesses do not
only depend on shareholders, but also on the society that backs up their existence through
various laws and regulations and supports them by purchasing their products and services.
They are known as stakeholders who have an interest in the conduct of business and are
employees, customers, suppliers, the local community, government, etc. So, this view is also
known as stakeholder approach.
12.4.1
Customers
Customers are encouraged to choose a product from alternative products by their
estimation of what they are getting relative to what they have to pay. Customers are often an
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organization’s largest outside stakeholder group. As they are the largest stakeholder group, it
is crucial for a business to take ethical issues into consideration while paying attention to its
customers. The businesses disregarding this fact will surely lose some of its customers as
customers will not select to purchase the good or service of a business which cheats on them.
There is an expression in selling. It says “Never get in the way of a customer who wants
to buy something!” It seems practical at first, isn’t it? If you are earning money and making
profit, what is the problem? Indeed, there is a problem. It will be so unethical to sell a good or
service to a customer if, for example, the product is defective, it is not right for the customer;
it is out of date, etc. Besides, selling that product will necessarily mean risking the future for
today because a customer who is deceived by that business will not buy that product, maybe
other products of the firm. Considering the lifetime value of a customer, customer loyalty
cannot be identified with a sale. Moreover, there is something not considered in this situation.
It is the “word of mouth” effect. That customer will surely talk about his/her bad experience
to his/her acquaintances and complain about that business. Some of those people will not even
think about that business when planning to purchase such a product. So, the number of
customers that the business loses is not just composed of the person who actually made the
purchase, but also contains some of this person’s acquaintances who are actual or potential.
(Can you imagine the loss?)
The 4th P of marketing, that is promotion, should also be an ethical issue considering
customers. Here, both actual and potential customers are of interest. Does a business have a
right to do whatever it wants to present its product or service? Is it ethical to give false
impressions to consumers, and potential customers, about the product? Besides that, a
business still engages in unethical behavior not only by giving false impressions, but also
hiding something from the consumers. As especially an advertisement in mass media means a
lot for televisions, radio stations, it will be easy for businesses to do whatever they want. If
also the rules and regulations regarding the customers are not efficient and effective in the
country, there will be a soft ground for businesses. Customers will not have an authority to
submit their complaints and to insist on their rights. It is only up to the business’ ethical
considerations.
What if a customer asks you to engage in an unethical behavior? As it is pointed out
earlier, a customer means so much to a firm. If, for example, a customer asks that how much a
product will cost unless s/he takes a voucher? You know that it is unethical to do that and you
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also know that you will lose a customer if you do not do that. There is a dilemma to be
resolved here.
The customer may also face with ethical decision making. When the customer is making
a purchase, s/he may confront with his/her ethical values. In these situations, generally, they
will gain a benefit by doing an unethical thing or lose something by behaving ethically. For
instance, you go to a cinema saloon with your kid. You see that the children under the age of
12 are ticket-free but your kid is 13 years old. What would you do in that situation? Would
you think that not buying a ticket for your kid will be a fib? Or would you think that you will
not concede from your principles for a worthless ticket and will get a ticket for your kid? It is
just up to your conscience.
12.4.2
Managers
Managers are the employees who are responsible for coordinating organizational
resources and ensuring that an organization’s goals are successfully met. Top managers are
responsible for investing shareholder money in resources in order to maximize the future
output of goods and services. They are the agents or employees of shareholders and are
appointed indirectly by shareholders through an organization’s board of directors to manage
the organization’s business.
When dealing with its stakeholders, managers are constantly making choices to do the
right thing. They both have to think about the interests of the organization and those of the
stakeholders and more importantly they are expected to maintain a balance between those, as
if. Indeed, all stakeholders wait for their own interests to be pursued. However, these interests
often conflict. A simple example is agency theory, which will be explained later but let’s
discuss it briefly. It is a situation in which the agents (managers) prefer to maximize short
term profits because they want to be appreciated or to be seen as successful while the
shareholders want their wealth maximized.
Managers are role models for their subordinates so they have to be extra careful in
ethical issues such as those below.
Managers are responsible for their subordinates. They have the authority of giving
orders to them, but the responsibility of observing them, evaluating their performance, and
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giving feedback to them to improve their performance, to close the gap between their target
and actual performance. While doing all of these, they have to be compassionate, patient, and
kind to their subordinates. Violence, pressure, and aggressiveness are, besides being
unethical, will not be in favor of the organizational performance. Offended, disappointed
employees cannot give their best for the business.
Managers deal with hundreds of people every day. It should not be remembered that
they are just human-being, not a robot. So, it is natural that they can become angry. However,
they should always be aware of the fact that they are the visible faces of the business. They
have to avoid insult and curse. Such behaviors, indeed, can be considered as verbal
harassment and aggressiveness. Moreover, by insulting and cursing to the person across you,
you are attacking to his/her personality. This is business world. The person you have attacked
may come across you later somewhere. You have to be in favor of compromise. Also you
should not forget that by engaging in such behaviors, your character derogates, not that of the
person you are insulting.
Bigotry is another ethical issue which a manager should get rid of. Bigotry defines
people who are intolerant not allowing for discussion about his/her beliefs and thoughts,
believing his truth to be the only one, and attacking to the ones who do not think the same
way with him/her. This attitude prevents the employees to improve and to regenerate.
Finally, every manager has to behave objectively and present objective information to
the politic executives. If the manager is politicized, which is unethical, the business will seem
as political and the subordinates will consider politics as a mean.
12.4.2.1
Agency Theory
Agency theory, developed in the 1970s, refers to the variety of ways in which agents,
linked by contractual arrangements with a firm, influence its behavior.
These may include organizational and capital structure, remuneration policies,
accounting techniques and attitudes toward risk-taking.
It has long been recognized that the separation of ownership and control in the modern
corporation results in potential conflicts between owners and managers. In particular, the
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objectives of management may differ from those of the firm’s shareholders. In a large
corporation, stock may be so widely held that shareholders cannot even make known their
objectives, much less control or influence management. Thus, this separation of ownership
from management creates a situation in which management may act in its own best interests
rather than those of the shareholders.
It is possible to think of management as the agents of the owners, which exactly refers
to individual or individuals authorized by another person called the principal, to act on the
principal’s behalf. As we understand from this definition shareholders delegate decisionmaking authority to agents, hoping that they will act in shareholders’ best interests. Jensen
and Meckling were the first to develop a comprehensive theory of the firm under agency
arrangements. Their theory claims that shareholders can assure themselves that the agents will
make optimal decisions only if appropriate incentives are given and only if the agents are
monitored. Incentives may include stock options, bonuses, ad perquisites, and these must be
directly related to how close management decisions come to the interests of the shareholders.
Monitoring is done by bonding the agent, systematically reviewing management perquisites,
auditing financial statements, and limiting management decisions. Some suggest that the
primary monitoring of managers comes not from the owners but from the managerial labor
market. They argue that efficient capital markets provide signals about the value of a
company’s securities, and thus about the performance of its managers. Managers with good
performance records should have an easier time finding other employment than the ones with
poor performance. Thus if the managerial labor market is competitive both within and outside
the firm, it will tend to discipline managers. The signals given by changes in the total market
value of the firms’ securities become very important.
Micro-economists use agency theory to study the problems of motivating and
controlling cooperative action. In this theory it is assumed that both parties are motivated by
self-interest, and that these interests may diverge. Agents usually know more about the tasks
than the principals (information asymmetry), so the main issue is that shareholders or
principals are at an information disadvantage as compared to agents. That is why principals
seek to gain information (by inspection or evaluation), develop incentive systems to ensure
agent actions in the principal's interests. Agency theorists attempt to design the most cost
effective information systems. Agency theory states that we need organizations to help
monitor and give incentives to agents doing coordinated, cooperative work. Cooperative
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situations involving complex tasks give rise to hierarchical structures. When ownership is
concentrated in one principal, then contracts are needed to define obligations and incentives,
especially those in the periphery of the organization. Agency theory, recognizing the costs of
monitoring systems, stresses the need to design incentive systems that will induce all
participants to contribute their fair share to the common enterprise.
Agency theory is the case to some extent for all contracts that are written in a world of
information asymmetry (Information available to some people but not others) , uncertainty
and risk. Here, principals do not know enough about whether (or to what extent) a contract is
or has been satisfied. The solution to this information problem – closely related to the moral
hazard problem – is to ensure (as far as possible) the provision of appropriate incentives so
that agents act in the way principals wish. Moral hazard is the risk that a party to a transaction
has not entered into the contract in good faith, has provided misleading information about its
assets, liabilities or credit capacity, or has an incentive to take unusual risks in a desperate
attempt to earn a profit before the contract settles. Moral hazard can be present any time two
parties come into agreement with one another. Each party in a contract may have the
opportunity to gain from acting contrary to the principles laid out by the agreement. For
example, when a salesperson is paid a flat salary with no commissions for his or her sales,
there is a danger that the salesperson may not try very hard to sell the business owner's goods
because the wage stays the same regardless of how much or how little the owner benefits
from the salesperson's work.
Moral hazard can be somewhat reduced by the placing of responsibilities on both parties
of a contract. In the example of the salesperson, the manager may decide to pay a wage
comprised of both salary and commissions. With such a wage, the salesperson would have
more incentive not only to produce more profits but also to prevent losses for the company.
In terms of game theory, it involves changing the rules of the game so that the selfinterested rational choices that the principal predicts the agent will make coincide with the
choices the principal desires. Game theory attempts to look at the relationships between
participants in a particular model and predict their optimal decisions. One frequently cited
example of game theory is the prisoner's dilemma.
Suppose there are two brokers accused of fraudulent trading activities: Dave and Henry.
Both Dave and Henry are being interrogated separately and do not know what the other is
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saying. Both brokers want to minimize the amount of time spent in jail and here lies the
dilemma. The sentences vary as follows:
1) If Dave pleads not guilty and Henry confesses, Henry will receive the minimum
sentence of one year, and Dave will have to stay in jail for the maximum sentence of five
years.
2) If nobody makes any implications they will both receive a sentence of two years.
3) If both decide to plead guilty and implicate their partner, they will both receive a
sentence of three years.
4) If Henry pleads not guilty and Dave confesses, Dave will receive the minimum
sentence of one year, and Henry will have to stay in jail for the maximum five years.
Obviously, pleading guilty is the most attractive should the other plead not guilty since
the sentence is only one year. However, if the other party also chooses to plead guilty, both
will have to serve three years. On the other hand, if both parties plead not guilty, they'd have
to serve two years in jail. Consequently, the risk of pleading not guilty is a five-year sentence,
should the other choose to confess.
12.4.3
Employees
How people are treated and how they behave in their workplaces is of crucial
importance to the society. Luckily, more and more attention is being paid to workplace ethics
than ever before. More businesses are hiring professional ethics officers and/or directing
54
portions of their human resource budgets to managing workplace ethics. More ethics training
programs are available to businesses, and more academics and government regulators are
focusing on workplace ethics.
There are many issues considering the relationship between ethics and employees.
These should be learned very well first and then the businesses have to do their best to avoid
these. It is impossible to deal with all of these but here are some of them which are highly
significant.
First of all, lying is a significant issue. This is bidirectional, that is, both the employees
may lie and they may be lied. Both are of high importance. Why does an employee lie?
Because s/he has to! The pressure from both his/her supervisor or rules & regulations may
drive an employee to lie. If your supervisor is a gestapo (!) about how the job will be done,
you may feel anxious and consider lying as an escape way even if you are not a serial liar.
Also, if the rules & regulations are full of “Never do that!!!”s, “If you do that, you will be
strictly punished!!”s, and “Are you about to do that? Think once more in my opinion!”s, it is
obvious that you will be a little nervous and hide the truth. So, what drives a reliable
employee to lie is no more than the organizational culture. The businesses where everything is
flexible will ensure the employees feel themselves comfortable and self-confident, so they do
not have to and necessarily will not keep something from someone. Besides, an employee
may be lied about something. The best known example for this is lying an employee when
s/he has a request. If an employee asks for a promotion or a pay rise, the management which
cannot afford a rise or cannot promote this person will deny this request enouncing that
his/her performance is below standards. What will happen then? The employee, thinking that
s/he deserves that promotion/rise as his/her performance is not actually bad, will be
disappointed, will start to consider his/her future in the firm, and soon will look for another
job. The firm will lose an employee of such a quality and will bear the costs of recruitment,
and maybe more than the cost of promoting him/her or giving a rise.
Some employees keep their self-interest superior to organizational interests. This is
obviously unethical. Egocentrism may lie behind this behavior but the problem may be more
serious. You can think that what may be more serious than egocentrism but an egocentric
employee can be fired and you can move on. However, if your organizational culture is not
able to provide organizational commitment among employees, what will you do? This is a
more serious problem. You, as an executive, have to make employees feel themselves as a
55
part of the organization. Otherwise, they will be stolid about organizational interest and trace
theirs.
There is also an issue which has been being discussed for decades and is heading to the
subject of law more. It is discrimination on race, color, gender, age, etc. There is no need to
discuss about it, in fact. It is a shame for all of us to show such a behavior. Is is possible to
come across such an incident everywhere all around the world. Business world and sports are
a couple of such places. As it is mentioned, it is a legal issue more than ethics. There is no
explanation of such a distinction. A highly qualified person from the nominee pool may find
himself/herself as unemployed just due to the color of his/her skin or an elderly person may
be regarded as “useless” just due to the age. His/her experiences are disregarded. Also, some
slowcoaches (!) think that women’s place is their home. Such thoughts must have already
diminished but did not, unfortunately.
Theft is another ethical consideration seen among employees. Not only kleptomania
should be regarded as a disease, but also thieves must be considered as patients. The
recruitment process is crucial to avoid this behavior. An appropriate selection process will
avoid HR managers select such employees. It should be examined deeply whether the
candidates are prone to stealing. If such a person is selected, dismiss should be the last
decision because as a socially responsible firm, releasing a person to the society will be an
easy way. Instead, the reasons for this behavior should be searched. Again, organizational
commitment is crucial here. An employee who feels the self as a part of the business will try
to avoid this as such a behavior will make him/her feel like stealing from his/her own home.
The privacy of the employees is again very important. Let’s try to explain this with a
known example. When observing the employees at work to define their actions, sometimes a
person, standing by them and ticking the paper in his/her hand for the actions done, may
disturb the employees and affect the reliability of the research as they will not be comfortable.
The best thing to get over this problem is populating that person among the employees. As
employees now consider him/her as one of them, they will not be uncomfortable and the
reliability of the search is provided. However, in this case, the privacy of the employees is
violated. Here is the dilemma: to risk the reliability of the search to ensure the privacy of the
employees or to ensure their reliability by risking the reliability of the search. This should be
carefully considered by the supervisor by weighing risks and benefits.
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Pay justice should also be taken into consideration in a business. If the people doing the
same job are paid very differently, this will create unrest among those employees. This issue
is closely related to discrimination, in fact. If, especially, those employees are of different
race, color, age, gender, there is also a possibility that the business may be accused of being
discriminative.
Finally, sexual harassment in the business world should be discussed. It is, like
discrimination, a legal issue, indeed. There should be no debate on this issue. Such behavior is
totally unacceptable. People engaging such behavior must be banished from this world. There
should be strict rules in the organizational culture to avoid sexual harassment.
12.4.4
The Government
A government is a body that has the authority to make and the power to enforce laws
within a civil, corporate, religious, academic, or other organization or group. In its broadest
sense, “to govern” means to administer or supervise, whether over a state, a set group of
people, or a collection of assets.
What William E. Gladstone said about governments: "It is the duty of government to
make it difficult for people to do wrong, easy to do right." Therefore, government should play
the role of stabilizer. Through its rules & regulations, it has to keep the interests of businesses
and the community in balance. It should neither favor the businesses nor the community.
Businesses may try to follow its own interests by engaging in unethical behavior but
through its regulations, the government can and must avoid these. Here are some of the
unethical conducts that businesses may do.
First of all, bribery is of high importance. Bureaucratic transactions may sometimes,
even most of the time, overwhelm businesses. Waiting for permission for the initialization of
a project, for example, may annoy businesses if it really takes a long time or, more
importantly, the project should be started and/or completed at specific time. In this case, the
business may not consider any inconvenience to give a little (!) money for a signature.
Moreover, bids are another place the businesses cheat. Some businesses consider some bids
from time to time as vital. They think that unless they win a bid, they have to put up the
shutters. There obviously exists some uncertainty in bids. A firm giving a lower-priced offer
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than your business will get the bid. In this case, what does a business do? Give some money
and get rid of that uncertainty? They are happy, the government is happy, aren’t they? In fact,
they should not be. This is surely unethical. What should be done so? It is quite simple
actually. Education! The people working in government like those people working in the bid
evaluation committee are not ashamed of such behavior. I bet they are dogmatizing in family
meetings about morality and ethics! If they are taught from the childhood that such behavior
should not be conducted, there will be no such things. Also, there is not any case related to
this issue showing that the people doing this are punished, that is, there is no role model to be
shown.
Tax transactions are also under ethical debate. As it is mentioned before, common sense
tells us that the primary goal of businesses is profit and the maximization of shareholders’
wealth. Tax is something that decreases profit. As it is known, tax is an involuntary fee levied
on corporations or individuals that is enforced by a level of government in order to finance
government activities. There are two important words in this definition: involuntary and
enforcement. Government forces you to pay your tax and your permission is not granted, that
is, you do not have to volunteer to pay tax. What if a business does not want to pay tax? It
may manipulate some of its transactions to avoid tax though it is unethical. For example, a
conglomerate which has many businesses in its own structure can hide its profits by taking
credit from its own financial institution with a very high interest rate and show the payments
to the institution as interest expense although the money is going nowhere. What can a
government do to avoid these? It can conduct more auditing; apply harsher rules &
regulations to cheating businesses.
Finally, some businesses make account frauds for its own interest and, undoubtedly, at
the community’s expense.
12.5 ORGANIZATIONAL ETHICS
12.5.1
THE IMPORTANCE OF ETHICS IN ORGANIZATIONS
Business ethics issues are associated with environmental disasters, financial scandals,
bribery, sexual harassment and several unpleasant events in media. Actual ethical events are
not limited to those. Ethical issues concern every field of business activities because
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behaviors concerning ethics are seen at all human activities. That’s why ethics is and will be
the most important issue for discussion. In fact, ethical issues stem from ethical values.
The importance of ethics comes into appear especially in the decision making process.
This kind of issues is handled in business considering profit-ethics dilemma. Activities like
hiring or protecting someone, deciding on bids, arranging prices, defining targets, allocating
resources, determining profit margin, disciplining employees all include ethical decision.
From this point, developing ethical code in organization is crucial.
12.5.2
CONTROLLING ETHICAL BEHAVIOR IN ORGANIZATIONS
Control represents the techniques used by organizations to arrange the ethical behaviors
of personnel. Control techniques like developing organizational policies concerning ethics or
making them applied show which activities are acceptable or not in ethical decision making
process. Organizational control techniques can solve the conflicts that may occur in business
environment. Thanks to the application of punishments for unethical behaviors, in addition to
providing rewards for ethical behaviors, employees can understand what is expected from
them.
Control techniques can be used in recruitment process, first. Most of the organizations
reveal individuals who have a tendency to obey ethical standards potentially by applying
attitude and personality tests. Control techniques kept on to be used after recruitment.
Organizations may add principles they are looking for ethically in an executive to their
criteria in recruitment process. They may use various methods to get information, for ex,
honesty test, past control, and, in addition to these, taking individuals’ word to stick to ethical
code.
A psychological contract is made between employer and employee at the beginning of
the recruitment process. What they will put forward and the employee’s contribution to the
business are formed via this contract. The degree of this contract to satisfy counterparts’
expectations affects the success of the relationship. It is also important to understand the
ethical expectation of psychological contract for the employer and employees. “Ethical
behavior cannot be simplified as “can be done” or “cannot be done”. A constantly changing
expectation is relevant for both sides. For this reason, opportunity and structure must exist to
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develop expectation system.” Every company does not have equal conditions to ensure this.
Companies have to renew their ethical values considering contemporary conditions. (Carell,
Senninos, Heaven, p.79)
12.5.3
WHAT IS ETHICAL CODE?
Organizational standards can be used to control behaviors related to ethics. These
standards emerge as an arrangement of ethical rules. As it is mentioned, individuals who have
different culture and past may have different moral philosophies, ethical mentalities. That’s
why employees have difficulty in determining which behavior is acceptable in the company
unless standards are applied at the same level. Ethical code may not solve every ethical
problem but it, at least, sets up rules directing employees.
So, what is ethical code? “Ethical values accepted as “good” in any living area may
exhibit themselves as habit rule, principle or standards. These ethical elements of a profession
or application field are gathered and written rules called as ethical code are constituted.”
(Yönetsel, Mesleki ve Örgütsel Etik, Doç. Dr. İnayet Pehlivan Aydın, 2001, p.74) However,
every individual is not obliged to obey ethical code; sanction power is also limited. Ethical
code tries to explain how a job should be done.
In business life, beliefs about what is good or bad or what is right or wrong have
become a serious problem in some organizations. Professional ethical principles include a
moral extent and draw a plan needed with ethical. In fact, firms of future have ethical code.
Nevertheless, unfortunately, the importance of ethical code has not been covered in many
businesses yet. Big companies prepare ethical codes and track the application of these via
annual reports. Institutions are gradually engaging in the efforts of arranging their ethical
code. This kind of studies has gained pace in our country, too. It is known that the
professional organizations for public employees like Chamber of Medical Doctors, Union of
Chamber of Merchants and Craftsmen have been engaging in such studies. It is sometimes
seen that ethical rules about the behaviors of professional members are written in regulations
like the standards of auditing members.
In its general sense, ethical code is an organizational declaration published by the
organizations. This declaration explains obligations and responsibilities of organizations to
their partners (customers) and to the people they are responsible for. Ethical code is the total
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of behavior principles specific to each organization. These principles help employees
understand, what all these rules are for, in what way they affect their behaviors, what kind of
sanctions there are if they do not obey these rules, and in some cases when these rules become
insufficient and when employees have to take a decision, this code guides them how to
behave. Ethical code provides a framework for employees to approach work life and
organizational functioning with a pragmatic view. Generally, values and principles mentioned
within this framework, by giving examples from uncertainties and gaps to occur in practice;
help related people and directors to take decisions in compliance with the organizational
principles and values. For instance, it may not be included in the legislation of an organization
how a board of directors can be fair. Therefore, how an institution can be fair should be
standardized and should be known by everybody with this form.
In order to form an ethical code, there are different phases. First, ethical principles of
the organization should be determined and standards should also be determined on how to
implement these principles, then this code should be implemented and supervised. So, ethical
code forming should be carried out in a system and sequence. First, it should be specified who
will determine this code. In some organizations, commissions at level of permanent boards
and which are set up by decision of board of directors, create the ethical behavior principles of
the organizations and determine the standards. These commissions are generally called “social
responsibility commissions” or “public market” commissions. These commissions have two
functions within the organization: First, these commissions help ethical issues to be on the
agenda of the decision-makers who are at the highest level in the organization. Secondly, in
the process of adherence to ethical rules, they provide a symbolic communication between the
employees and customers. (Northcraft and Neale, 1990, p. 206)
Organizations can either set up a board to form ethical behavior principles or they can
authorize only one person about this issue. These are the issues regarding organizational
values and ethics management. Therefore, board of directors should always be informed about
these values, should control whether these principles are implemented and should be
volunteer to do so. On the other hand, the functioning of the person they authorized and of the
boards will not be on time and will lose its requirement.
When the authorized people are determined, we can go into the phase of formation of
ethical code. The greatest mistake organizations make while forming their ethical code is to
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copy the ethical code of other organizations and apply it to theirs. Such a thing can only be
done with the purpose of opinion exchange. To apply a standard ethical code or to apply the
ethical code of another organization will undoubtedly be insufficient in responding to the
needs of your organization. So, first of all, you have to determine in what issues your
employees need guidance. Furthermore, ethical problems of all levels should be determined in
the organization and, if needed, for every level different guiding ethical codes should be
determined. These ethic principles define the value system of the organization, puts down the
objectives of the organization and, in this point, since the objectives and value system of
every organization is different from each other, each organization has to develop its own ethic
principles.
When the problems within the organization are determined, a research should be
carried out. We should communicate with firms which were formerly faced with the same
problems and should understand what kind of a system they had developed. At this point,
using a previously tried model would be more efficient for the resolution of the problem.
However, it should be restated that it would be a big mistake to adopt a different
organization’s model without first determining the problems of your organization. First, you
should set out the objectives and values of your organization, and then you can use other’s
solutions as a resource.
Ethical code which you think as appropriate for your organization’s structure should be
tested before. Code prepared for different levels of problems can be applied to special groups
selected from that level and observations can be assessed by someone else. For the code
prepared generally, groups may be formed by choosing people from different positions and
departments and it can be observed how this code is perceived in different positions.
According to the results of the observations, it should be concluded whether these principles
are suitable or not and if necessary, new ethical principles should be determined.
After determining the ethical codes, you should ensure that this code should be known
by everybody. You have to inform your all employees, suppliers and customers and to your
partners, if they exist, that you company has an ethical code. Ethical codes should be handed
out as leaflets in the organization or it should be announced via Internet. Furthermore, it
should be reported to other related body or persons via Internet.
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Formation of the ethical code will mean nothing, if it will not be implemented. Ethical
code should certainly be implemented. Ethical code will mean nothing, if they are not handed
out as documents to employees or if they are not explained to them clearly. To this end, ethics
education programs may be applied. Thus, employees of the organization become wellinformed about the ethical principles and they will also be informed about them in practice.
Finally, authorized people about the issue should control whether this ethical code is
implemented or not. In annual assessments, ethical code should be mentioned and a report
should be presented to board of directors on the benefits and deficiencies of the code.
12.5.4
HOW IS ETHICAL CODE DEVELOPED?
Developing ethical code, it will be helpful to apply a democratic and participative
method and to make code prepared by a committee selected through election. However, it is
obvious that unapplied ethical code will make all these efforts turn out to be nothing.
Moreover, it may be expected that the organization may be damaged more if current ethical
code is not applied. For this reason, necessary precautions should be taken to implement
ethical code.
The ethical program to ensure ethical behaviors implemented in an organization is
composed of the 12 steps explained below.
1. Vision Statement: Vision statement explains in what situation the organization is
expected to be in the future. Vision helps employees and managers review and test their
decisions. Employees and managers should ask themselves this question: “Shall my action or
decision contribute to my organization’s realizing its vision?”
2. Values Statement: Values statement puts down the general principles of the expected
behaviors. Values define the standards which provide decisions and actions to be expected
behaviors.
3. Organizational Ethical Principles: Organizational ethical principles are specific
principles which show what is expected and required in an institution. Ethical principles
should clearly set out what the employees are expected to do. Ethical principles should also
explain what the consequences will be when these standards are not met.
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4. Ethics Officials: Ethics officials ensure the adoption and implementation of the
ethical system. These officials monitor the implementation of the values and ethical principles
adopted in the organization and they determine the behaviors which are not in compliance
with these principles, prevent and explain these unethical behaviors. Ethics officials generally
inform the unethical behaviors, guide the employees while monitoring their strategies and
mechanisms and they also report unethical behaviors.
5. Ethical Committees: Ethical committee is a committee which encourages employees
to share the ethical principles of the organization and which also audits ethic officials. This
committee is the place where ethical principles take their final form and it is the authorized
body where ethical policies are reviewed or amended.
6. Ethical Communication Strategy: If the employees are aware of what kind of
behaviors are expected from them and what sources they possess, ethics officials should
create a strict ethical communication strategy. Such a strategy helps employees know, when
they require, how to behave. An effective ethical communication strategy encourages
employees to be informed about the values, standards and organizational ethical principles;
and also to behave according to these.
7. Ethics Education: Ethics education teaches employees what is expected from them
within the organization. In addition, ethics education programs show employee how the
values and standards learned by employees, hypothetically, can be applied to the concrete
situations of real life.
8. Ethics Help Line: Help lines should not be used for solely reporting unethical
behaviors. Help lines should be used to explain ethical policies which are not clear enough
and for the purpose of guiding employees while taking ethical decisions.
9. Assessment and Awarding: In many organizations, the behaviors of the employees
are shaped according to what is assessed or which behaviors are awarded. If, in an
organization, the ethical behaviors of the employees assessed and awarded, or unethical
behaviors are specified and punished; employees will believe that values and ethical
principles are important for the organization.
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10. Supervision and Monitoring: It is not enough to supervise and monitor the
behaviors of the employees. It is of great importance for the employees to adopt and
internalize the organizational values and ethical principles. Do the employees think that these
principles are correct and suitable? Do the employees believe that all the workers implement
these principles at the same level?
11. Performance Measurement: Performance measurement is to control whether ethical
code developed is implemented. Indeed, another role of control should be mentioned, here.
Control will assure that the performance of employees is evaluated regarding the ethical
standards of organization. “Ethical performance is measured by observing employees and
using questionnaire technique.” (Ferrel, Fraderich, p. 175)
Observation is vital in this issue. It is essential to determine whether an individual does
his/her job properly and in compliance with ethical standards. “For instance, role playing
technique is used by many corporations in the training of their salespeople and executives.”
(Örgütlerde Etik Davranışlar, Yrd. Doç. Dr. Çiğdem Kırel, 2000, p. 9) Ethical issues may be
explained to individuals and the results may be kept in video format. Thus, both the
participant and the observer can evaluate the consequences of ethical dilemmas.
Questionnaires studying the ethical perceptions of employees and executives about their
organization and the rates of ethical and unethical activities of organization and industry put
the general evaluation of ethical performance forward. If it is determined that the rate of any
unethical behavior rises, management may understand what kind of behavior emerges why,
therefore.
12. Ethical Leadership: The success of the ethical program in organizations depends on
the success of leadership. Leaders shape the organizational climate and determine the
standards. If the managers are reliable and honest, if their motivation is high about ethics and
their expectations are clear, if they are sensitive about ethics and if they take decisions by
ethical judgment, ethical problems will decrease automatically.
According to Capital Magazine, there are eight steps in forming an ethical code:
1. Choose a leader: If a high-level manager, in particular the CEO, is not ready to
introduce the ethics of business policy, the chance of the ethical code to be useful is not very
high.
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2. The Board of Directors should support: Institutional values and ethics are subjects
related to management. The board of directors should be enthusiastic about both having such
a policy and receiving regular reports on implementation of the ethical code.
3. Why are people uncomfortable?: It should not be sufficient to apply a standard
ethical code or to copy someone else’s ethical code. What is important is to discover in which
subjects the employees need guidance.
4. Choose a tried model: Use a framework which points the issues affecting different
units of the organization. Among these different units there are shareholders, employees,
customers, suppliers, local/national society and even the competitors.
5. Ethical code of the company: Ethical code should be either handed out as leaflets
within the company or over the intranet. Existing policies such as giving or receiving presents
or special use of software should be included, and guidance for the functioning of the ethical
code should also be covered.
6. First try: Ethical code needs to be tried. This can be realized by a sample group
chosen from different places and positions. An objective eye from outside may assess the
results.
7. Ensure the code to be known: Send the ethical code to all employees, suppliers and
the others. Inform the society that your company has an ethical code, and the application
program covers the whole company. For instance, put it on your website or send it to risk
capital partners or other partners.
8. Ensure its functioning: Presents the examples about your ethical code’s
implementation in education programs within or outside the company. Managers are to sign
the code regularly and to establish a reviewing mechanism. Appoint someone responsible for
ethical code.
12.5.5
ETHICAL BEHAVIOR MODEL IN ORGANIZATIONS
Organizations have value systems which determine their behaviors, just like individuals.
An organization develops a common value system in compliance with its principles.
Organizations, which make decisions that result in unethical examples, are also responsible
for their behaviors. For instance, in 1982, a company, called Beechnut, experienced a great
scandal regarding “apple juice”. After it became obvious that apple juice was made up of
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sugar beet and same contents, Beechnut was embarrassed and it suffered a vast loss in profits.
The event had also shaken the trust of people.
Organizations can also be in different levels of ethical development, just as individuals.
The lowest level is the one in which illegal behaviors are only related to the organization.
Unless a law is violated, the organization is free to behave as it wants.
In the second level, there are ethical rules. However, these rules are only guiding rules.
Namely whether to obey or not, depends on the organization. A behavior can be tolerated
even if it is not appropriate but legal. The behavior aims to make short term benefits.
The third level of the organization’s ethical behavior is the level in which ethical
decision-making process and the decision-making process of the company are combined. The
correctness of the decisions is proved when there is an ethical behavior. It is observed that
ethical aims and principles are adopted. The organization cannot reach that level unless it does
not comprehend what the techniques and principles are.
An organization lives in close contact with society and the decisions they take affect
others as well as them. Therefore, the organization has to know affects of the results of their
behaviors on their values. It should foresee what kind of results may threaten their existence
or facilitate their surviving.
As previously mentioned, directors should behave considering their responsibility areas
such as personal life, shareholders, social environment and society. No one can expect
directors to behave in a way, when there is no organization culture without an ethical
character.
Ethical behavior models in organizations involve complex structures which may affect
each other. In order to display this structure more properly, it would be better to explain
clearly the factors which may determine the ethical behaviors in the organization. The
following figure is also a kind of summary in order to understand fully what is explained
about ethical behavior till here.
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Cultural Effects
 Family
 Education
 Religion
 Press/Entertainment
Organizational Effects
 Ethic Codes
 Organization Culture
 Role Models
 Perceived Pressure to reach the results
 Awarding and Punishing
Political-Legal
Economic Effects
Figure 1 Ethical Behavior Model in Organization
Role Expectations- (Individuals: personality, values, ethic values, to promote the
history, gender) ethical behavior
Bibliography: Robert Kreitner, Angelo Kinicki, Organizational Behavior, (New York: Irwin
Mc. Graw Hill, 1997, p. 79)
As you see in the figure, individual decision-makers are the center of ethical behaviors.
Individual factors such as personal characteristics, values, ethics and gender also affect ethical
behaviors. Awarding or strengthening certain behaviors or punishing others are considered as
ethical or unethical behavior by individuals. Particularly, women and men show different
ethical adjustment behaviors towards organizational behavior. People take different roles in
their lives as directors or employees. How they will play their roles is shaped by cultural,
organizational and general environmental factors. Studies have shown that, directors at middle
or lower levels, are kept under pressure about unethical behaviors. These are generally
focused on organizational effects. It is observed that, employees who find out unethical
behaviors stemming from organizational effects feel dissatisfaction and lose their trust against
the organization.
Ethical or unethical behaviors are a result of individual-situation effect. Therefore, it
would be better to discuss the ethical climate of the organization and the ethical principles of
the decision-makers.
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12.5.6
ORGANIZATIONAL ETHICS AND SOCIAL RESPONSIBILITY
Ethics affects the individual behavior in workplace. Social responsibility is related to
the attitude of the organization to the groups and individuals in its social environment because
organizations have to consider the interests of the society while they are conducting their
activities in the business world. This is called “the social responsibility of the organizations”.
Ethical principles in organizations can be institutionalized in different ways. The aim of
developing ethical principles is to set up same kinds of behaviors within a legal framework. In
some organizations, commissions at permanent boards’ level create the ethical behavior
models of organizations and determine the standards. These commissions are generally called
as “social responsibility commissions” or “public market commissions”. These commissions
have two functions within the organization: First, these commissions ensure ethical issues to
be on the agenda of the decision-makers who are at the highest level in the organization.
Secondly, in the process of adherence to ethical rules, they provide a symbolic
communication between the employees and customers. (Northcraft and Neale, 1990, p.206)
The second mechanism in the institutionalization of ethical behavior within the
organization is the promotion of the ethical principles. In the organization, these ethical
principles define the value system of the organization, determine the organizational objectives
and direct the organization to take decisions in compliance with these principles. (Northcraft
and Neale, 1990, p.207)
The third mechanism in the institutionalization of ethical behaviors, which is application
of ethics education, has become widespread recently. In a research carried out by WalthamBentley College Ethic Center in America in which 279 big companies and 1985 people
participated, 20% of the subjects has mentioned that they organize seminars and workshops in
order to promote ethical behaviors properly. Furthermore, many famous companies attach
great importance to the issue of ethics so as to improve their damaged image. Organizations
arrange their formal ethical programs to refrain from problems of public relations, to increase
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the morale and productivity of the employees and to make their organizations more reliable.
(Northcraft and Neale, 1990, p.207)
Although, both in Europe and America, ethical principles exist for a long time, it is
known that these principles are insufficient in practice and sanctions are ineffective.
According to Pocock, in organizations, individual efforts which will raise awareness in
sensitivity towards professional ethics are urgently needed. As for the application of ethical
principles developed by organizations, there may be some problems regarding the
determination of employees who do not obey these principles and regarding the belief that
competition opportunities will disappear if these ethical principles are adopted. (McKenna,
1994, p. 254)
Generally within public, it is believed that the concepts “trade” and “ethics” cannot be
used together. This opinion is based on three misunderstandings. First of them is the
hypothesis in which money and ethics cannot stand together. According to this hypothesis,
earning money is the symbol of success and you cannot earn money without making a
concession. Secondly, all ethical problems have simple solutions. Right and wrong are always
explicit and clear. This hypothesis leads us to see the events either as black or white and
prevents us from seeing the gray side of the event when taking ethical decisions. The third
hypothesis is that ethics is a simple subject which requires obeying the range of principles and
legal arrangements. In fact, legal problems are not generally ethical problems. For instance, an
organization may behave legally but not ethically. (Lamberton and Minor, 1995, p. 328)
Business means money, profit and success. For some people, the business world is just
made up of these elements and these people have developed certain opinions about business
world. Among these, there are some which are generally accepted and determine the behavior,
such as the captain who saves his ship, do whatever you like unless you are not caught,
everyone may cheat in work life, is there anyone who has become rich by truthfulness so far,
everyone does that why shall not I? (McHugh, 1996, p. 11) However, the aim of trade is to
serve to public, not just to gain money. Profit is the prize of providing good service to public.
Profit is the instrument of providing service and its measure. Profit is not an objective, itself.
(McHugh, 1996, p. 17)
Recently, in TV ads, the ad of a furniture white goods manufacturer is very attractive
for it highlights the ethical values in business market. In related ad, a sentence of the founder
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of the manufacturing firm is used as selling motto. This motto is like that: “I would rather lose
money than lose people’s trust”. This motto is very much important since it emphasizes that
continuity in business life depends on the trust of people in you.
One of basic ethical principles of organizations is the concept of “social responsibility”.
Social responsibility of an organization can be explained in a very broad sense. Not giving
harm to the society and serving to the benefit of the society lie within the core of the concept
of social responsibility. Basic policies of the organization reflect this social responsibility in
society with its products, activities and the behavior of its employees. Within the framework
of social responsibility, organizations support the following basic activity (effectiveness)
areas. (Eskin, 1999)
1. Social aid: Implementation of innovations, housing aid, and supporting educational
studies.
2. Supporting disadvantageous people: Providing the employment of disabled people,
avoiding discriminatory policies.
3. Relations of employees: Union relations, sharing of profit with employees,
encouraging the participation of employees in management, increasing the benefits they will
get after retirement.
4. Protection of the environment: Prevention of environmental pollution, recycling of
wastes, usage of alternative fuels.
5. Product quality: Keeping the quality of the products at the highest level, respect to
customer rights and protection of the customers who are economically disadvantaged
12.5.7
HOW IS ETHICAL CODE IMPLEMENTED?
a-)The contribution of organization: The capability of organization to plan the ethical
standards and to apply those is crucial and it generally relies on the conditions of
organization. If the organization does not find its performance ethically satisfactory,
management may want to reorganize the methods that decisions are taken through. For
example, centralization in important decision making may be adopted to avoid ethical
dilemmas among subordinates. Besides, top management can be influential in developing
organizational culture and implementing more ethical values in organization. While doing
this, positive behaviors may be met with rewards and negative behaviors may be met with
sanctions. That means, initial role in disseminating ethics in organization belongs to again
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organization itself. Limitations to be put into effect and the ethical code to be determined by
applying them will have a permanent and binding influence.
b-) Motivation: Motivation is the act of individuals on behalf of their own desires and
needs to attain a certain goal. In an organization, motivation is assured through behaviors
encouraging employees to attain organizational goals. In this regard, disseminating ethical
code, motivation means must be used to encourage individuals act towards ethical principles
set up and to motivate them in this way. For instance, by rewarding ethical behaviors and
providing opportunity to attain individual goals, ethical codes and applications will both
position every organization better ethically and make employees be more efficient and ethical.
From this point, the plan prepared to motivate employees should be just and include incentive
elements. Two things draw attention here. First, something that motivates an employee may
not motivate another. Secondly, pay and salaries are not the single source of motivation for
employees though they are important. Moreover, motivation can increase commitment so
drawbacks like absenteeism, conflict, loafing, and tardiness can be avoided. So, a rational
motivation system affects individuals’ behaviors and directs their behaviors, and improves
ethical behaviors by transforming them into social habit.
c-) Communication: Executives cannot motivate employees without a special
communication system, they cannot force employees to do what they want; that is, it cannot
suit ethical principles. Communication guides ethical standards and entails actions to make
functional departments of the enterprise connect to each other. Almost every person has
judgments difficult to change. The negative influences of these judgments show themselves
most in communication because, mostly, they do not depend on a rational basis. Adding
selective perception factor, perceiving some messages or a part of messages intentionally or
not, communication effectiveness is notably impeded. The fact that people pretend as if they
do not hear what they do not like or want to epitomizes of this case. This kind of behaviors
may cause unethical behaviors and adversely affect reliability and commitment. In this regard,
communication is significant in implementing ethical behaviors.
Communication among organizations is important in developing ethical standards and
activities. Bribery, fraudulent pricing, deceptive sale methods are a way that marketing
department can apply. However, unethical behaviors can be avoided through developing
ethical principles and disseminating them by communication means in an organization. That’s
why top management must set up, not only among organizations, but also among departments
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like production, sales, finance, marketing, and human resources in an organization an open
communication system, it must assure ethical standards developed.
d-) Associating culture with ethics: Ethical behavior can be improved through
developing organizational standards related to behaviors. These standards appear as an
arrangement of ethical rules. Individuals who have different culture and past may have
different ethical mentalities. Employees have difficulty in determining which behavior is
accepted in the company unless same policies and standards are applied.
Ethical rules cannot solve every ethical problem but sets rules directing employees. The
management of ethical behaviors in organizations and associating them with organizational
culture are constituted at three steps: understanding the current ethical culture by executives in
their organization, engaging in activities to improve ethical culture, and strengthening ethical
behaviors.
1. Understanding the current ethical culture: All organizations whether they are aware
or not have ethical culture. “These ethical values and norms they own guide organizations’
decisions and behaviors.” (S. A. Waters, E. Bird, The Moral Dimension of Organizational
Culture, Journal of Business Ethics 6, 1987, p. 15-22) That’s why the understanding of
current ethical culture by organizations is the first step in ethical behavior management.
Typical business values in decision making process include goals like maximum profit,
majority of market share, and return of these as investment. Other values in decision making
are derived from ethical theories defined earlier. Decision makers who take utilitarian theory
in the organization as basis take the quality and safety of the product, and the environmental
effects in production process into account in this step or the “rights” theory applies the honest
behavior values of employees, consumers, and customers. Leaders also play an important role
in making current organizational ethical values implemented and creating awareness of them.
2. Improving ethical culture: The change of ethical values of people and culture is
essential in an organization to improve ethical culture. If each employee in an organization is
bold and tough enough in an organization, s/he may fight with unethical behaviors and may
tend to behave ethically.
Organizations and executives use several appropriate methods to improve ethical
culture. They are developing ethical code, constituting guiding policies and decision
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procedures, that is, preparing organizational plans and developing ethical performance
standards, and providing ethics education.
As it is mentioned, ethical codes are written statements used to define behaviors that are
not processed by organizations due to unethical behaviors. These codes are set upon ethical
theories defined earlier. Illegal conducts and unethical behaviors like bribery can be prevented
by these codes.
Ethical codes written are important in the process of changing ethical values. So, all
employees learn which behaviors are right and which are unwanted. Applying ethical codes
are as important as improving them.
A significant way of improving ethical culture is that executives change or improve
policies. Policies must be in written form and appropriate for all employees.
“Thinkers state that one of the important issues in the performance evaluation process of
organizations is improving their ethical performance standards.” (R. D. Gatewood, A. S.
Caroll, Assessment of Ethical Performance of Organization Members, A Conceptual
Framework, Academy of Management Review 16, 1991, p. 667-680) This kind of standards
causes wanted behaviors emerge by adopting voluntary and involuntary behaviors.
(1) After 80s, the ethics education of employees has gradually gained importance. The
goal of education is assisting them to prevent administrative and social sanctions in avoiding
unethical and illegal behaviors to occur in organizations. Ethics education is handled more
detailed later.
3. Strengthening ethical behaviors: Executives studying on developing and
strengthening ethical behaviors have agreed on underlining three fields:
 Teaching ethical values of organizational culture to new employees,
 Utilizing various means affecting behaviors in ethical guidance,
 Institutionalizing ethical behaviors in organizational culture
It is important to explain the values of organizational culture to potential employees
before hiring them and to make them adopt the values. Thus, new employees who understand
what is right and what is wrong may have the chance to assess before they get the job.
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Executives may affect all employees’ behaviors in ethical guidance. They may use
ethical performance standards to determine employees’ ethical performances. So, employees
can learn which behaviors will be rewarded and which ones will be punished. Ethical
behaviors should be institutionalized concerning organizational culture. Permanency proves
that these behaviors or codes are institutionalized.
12.5.8
CORRECTIVE ACTION
Corrective action is rewarding employees who obey organizational principles and
standards and punishing the ones who do not obey them. When employees comply with the
organizational standards, their efforts are noticed and they are rewarded with means like
bonus, promotion. However, when employees deviate from these standards, they may be
reprimanded, they may be transferred to somewhere else, they may be suspended from work,
or they may be, as final solution, fired. That is, when something goes wrong in an
organization, it is a must to take deterrent precautions in compliance with current standards.
Undoubtedly, ethical rules have to be supported by top management and all executives who
audit employees. When rules are strictly applied and become a part of organizational culture,
ethical standards within the organization will be permanent.
Unless corrective action is applied against an organizationally or socially unethical
behavior, it is highly probable that such behaviors will keep on to be shown.
One of the precautions to be taken in correcting unethical behaviors in an organization
is strengthening organizational commitment. “The organization has to declare its commitment
to ethical values both to employees and to shareholders.” (Robert A. Giacalore, A. Neil
Asworth, From School Service to Community Service, 1968, p. 31-33) Most of the ethical
problems will be solved providing that organizational commitment is assured.
Considering Turkey, it is found that Turkish executives display some unethical
behaviors related to their personalities and management styles. Some examples taken from a
study of Şencan are given below:
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 Particularism is valid in Turkey. That is, executives and businesses do not trust to
people except family and close friends.
 Bribery and bankruptcy are so widespread.
 The people have a common belief that they cannot make something they deserve made
without giving bribe.
 Differentiating duty and personal relations is difficult.
 Easy gain and motive and ambition of being rich are so widespread.
 There is no collaboration, attainment of goals together, or job discipline.
 Conservatism is so widespread.
 Objecting to high positions is mostly done due to emotions and the desire to satisfy
inferiority.
 Honest actions are so rare.
Taking these into consideration, it appears that corrective ethical code should be
profoundly applied in Turkey. When people do not have confidence in each other, problems
can only and only be solved by sticking to the ethical principles. As the importance of
commitment to ethical elements in recruitment is understood, ethics has taken its deserved
place in job interviews.
12.5.9
ETHICS EDUCATION
Ethics education is a rapidly spreading study in institutions together with that ethics has
gained importance. Especially multinational corporations need intensive ethics education to
make individuals who have different cultures accept their own ethical standards. Ethics
education also eases the application of ethical code in institutions. Ethical standards are more
easily understood thanks to ethics education and ethics education ensures individuals make
ethical decisions on certain issues without having to utilize ethical standards. Although
conscience decides on ethics, ethical development can be provided through education. Ethics
education has been handled more seriously after 1980s. Another side of ethics education is
changing individual’s basic personality. As the importance of personality for ethical behaviors
is known, this side of education is significant.
It can be said that why individuals engage in unethical behaviors to attain their goals
stems from various reasons like greediness and ideological reasons. However, among these,
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one of the most significant effects is nescience. So, it is very important that individuals be
informed about ethical values and principles through well-prepared education studies.
The aim of ethics education is, beyond the norms and rules of the society in which the
individual lives, attending to problem of on which principles an ideal society can be formed
by reasoning. The principles wanted to be attained include behaving right and just to suit
basic human rights and human dignity without considering the society in which the individual
lives, the belief system they belong to, and the characteristics they have. Moreover, another
aim should be making people judge themselves on their own regarding ethics and morality.
Every person should give his/her own correct decisions.
Ethics education is handled in two levels. One level is pre-service education programs
that ethical values of a profession are taught to students in addition to that profession’s
knowledge and capabilities; second one is internal service programs that working individuals,
both as manager and one being managed, gain the ethical values of the profession they
conduct in business life.
12.6 INTERNATIONALIZATION
AND
CULTURES
IN
BUSINESS ETHICS
Values, as an integral component of cultures, were a theme that was discussed at the
conference. While ethical values are deeply bound within a culture, it is often difficult to
make them visible or to understand them. For instance, in international cooperation, it might
be easy to recognize and learn the surface-level phenomena of a culture, such as artifacts and
rituals, but the core values behind those rituals may be difficult for a representative of another
culture to understand.
In the global economy, there is an increasing need for different nations, companies and
individuals to work together in co-operative efforts. This emerging global perspective
emphasizes the need for individuals to behave competently within a different cultural
environment. However, individuals should understand that ethical values may exist in one
culture which are different from the ethical values in their own society. Although different,
these values might also be considered right and good.
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As business teachers, we believe that we are in an important position to influence intercultural understanding among our students. Furthermore, we strongly believe that we have a
responsibility to develop such teaching and to foster a cross-cultural perspective. The crucial
question is, how should this be taught? We believe that theoretical teaching is not enough,
which brings the practical side of teaching into focus. Inter-cultural understanding could be
developed through interactions and partnerships between universities, schools and firms from
different cultures. Based on this interaction, we believe it is possible to develop shared
meanings about norms, attitudes and even values. The partnership should be one of
continuous co-operation because shared values develop as a process and in this way students
can learn through experience (Kolb 1984). The main idea is that learners should develop a
deep understanding of their own values and then have opportunities to experience the values
of another culture. We assume, here, that individuals have the ability to grow and develop
through self-knowledge and their own experiences. Closeness between partners, whether
physical or some other type (e.g. internet or other media), is required for the development of
common understanding. This requirement becomes a challenge for both curriculum
development and student exchange programs. But it is not just students whose understanding
of different cultures is a concern. It seems important to us that we also focus on teachers.
Without their competence and willingness to understand different cultures, it is difficult to
believe that much progress will occur.
At this point, we want to discuss the value-basis of international co-operation. By this
we mean that the co-operative partners should aim for equality and a climate of humanness. It
seems important to us that all partners should be treated with respect, trust and acceptance.
Knowles (1990) emphasizes this aspect when creating a model of good learning. We also
mean that partners should not try to use power against each other. Such power can be based
on the size or the economic wealth of one of the cultures. Common understanding requires an
"ideal speech situation", in which genuine consensus is achieved without the operation of
power (Burrell & Morgan 1989, 295). We believe that one of the basic requirements in cooperation is to understand and accept such relational values as equality, empathy, trust and
fairness rather than to try to agree on substantive values.
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12.6.1
CONSIDERATIONS ABOUT EVALUATING VALUES OF
ANOTHER CULTURE
In developing a paradigm for international co-operation, first, it is important to
determine the values of another culture and then to try to understand those values. A problem
which arises from this paradigm is whether it is possible to accept all the values of other
cultures. One of the questions discussed at the conference was, "how do we define good or
bad values and how can the knowledge of these values be acquired?" The question is
problematic, and there are several ethical approaches which have been used in an attempt to
answer it.
For example, the objectivistic approach claims that a human being understands ethical
good by rational reasoning. According to this there exists a common idea of good outside a
human being, which idea is universal and static. This objectivistic approach is originally
based on the ideas of Plato (Räikkä et al. 1995, 51), and modern ethical theories, such as
utilitarianism and deontology, are aimed at universal values. Thus, they consider morals from
the objective viewpoint. The deontology-utilitarianism model provides a foundation in ethical
decision making (Brady & Dunn 1995). The essential question here, is whether we ever can
know what the universal idea of good is like, or if there even exists a universality of the
concept of good. Cultural absolutionism proposes that there are no neutral, universal human
rights principles: all values and morals are culture-specific (Howard 1993). Modern theories
are very abstract, and in practice it seems to us it is difficult to apply these principles. For
example, a consistent advocate of utilitarianism has difficulties in allocating scarce resources.
How will he/she determine if a heart-operation should be done for a person older than 80
years if this doesn't maximize the greatest common utility? The problem is how to calculate
the common greatest utility.
On the other hand, the subjectivist approach claims that there exists no objective idea of
good. The opinion of an individual is good and right for this individual and there are no
means to compare different viewpoints (Räikkä et al. 1995, 53). This can lead to the extreme
relativism, which doesn't sound reasonable to us. We believe that there might exist a few socalled strong ethical values, which are important for human beings and most human beings
can accept. These kinds of values probably include survival (respect of life) and some kind of
co-operation between human beings. Based on these values, it might be possible for some
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common norms to evolve, but the commonality may be eroded by culture specific ethical
values.
One of the conference presentations asserted that companies should "think global and
act local". That means that while businesses should respect different cultures, they should act
from a coherent ethical platform. Each firm has to identify the values which management
wants to promote and these will become the ethical platform for the future behavior of that
firm. The idea is to try to combine different moral values, so that actors understand and accept
the basic values of their organization, but they are able to apply these values within the
context of the local culture. This becomes problematic, however, when trying to determine
what are right and good values, especially when a conflict exists between the global and local
values. After all, an actor (e.g. a manager) must be able to make decisions by considering
different global and local values. So, we conclude that actors themselves and their
characteristics influence these situations. At the moment, there is an increasing interest in
virtue ethics (cf. Airaksinen 1987, 228 - 241, MacIntyre 1996), and this theme was discussed
in the conference. Virtue ethics emphasizes the character of an actor, and virtues like courage
or honesty are characteristics that can be developed and taught, at least to some degree (Heller
1990, 131). To us, virtue ethics seems to be a suitable approach to specific professional roles
and positions (like a manager, a teacher, an accountant, a lawyer etc.), where contextual and
situational aspects should be considered. But can there be any shared acceptance among
human beings of basic human virtues? Cultures in different places and times have emphasized
many virtues which differ from each other. MacIntyre (1996, 186) suggests that there is no
single, central, core conceptions of the virtues which might make claim for universal
allegiance. He assumes that virtues always require the acceptance of a common body of
standards and features upon which a society's moral and social life is judged. This leads us to
think that a social community (e.g. organization) is a place (physical or virtual) where
members co-operatively try to achieve the standards of excellence which are appropriate to
that form of activity (MacIntyre 1996, 187). For instance, as business teachers, we should
consider virtues connected to the profession of a business teacher among other business
teachers, or even among all of the teachers and professors in our own schools or universities.
This, however, raises another question concerning how virtues of adults in an organization are
developed or should be developed. Our assumption is that human beings have the ability to
evolve their own values and moral development, as well as their self-awareness. In this way
they understand ethical and other social necessities and can begin to develop ethically good
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characteristics. The meanings that are attributed to one's existence and the virtues that are
needed for such an existence come from the human beings themselves. The ability to raise
these meanings to a conscious level generally requires interaction with other human beings,
who provide a common, interactive way of developing and learning virtues. The members of
a community might do this by pondering their historical traditions and reflecting upon those
virtues which are most strongly stressed within that tradition. By doing this, they might
develop a consensus on which virtues are still relevant and ways in which they might
strengthen them. The common action in this process makes it possible to "cross the bridge"
between a single human and a community (Engeström 1995).
12.6.2
COMMUNICATION AND VALUES
A value-based approach to business-ethics seems to be dependent on the organization's
ability to communicate. This means that the members of an organization need to understand
the basic values of their organization (Elmark 1996) and they need to have opportunities to
reflect upon them together. The trend towards participative leadership, team management and
learning organization theories might offer opportunities for shared and equal communications
about values (e.g. Argyris & Schön 1978, Engeström 1995, Katzenbach & Smith 1993).
In Finnish schools, there has been an increasing discussion about values and valuebased management. This discussion has its roots in the professional ethics of a teacher.
However, the discussion about values in business among business teachers has been much
rarer. Within the American educational system, there is an interest in ethics and business
ethics, but the implementation of this interest is also very weak. Standards for accrediting
business schools include ethical issues in the curriculum, but they tend to be stressed less
frequently than other concepts. It is interesting to note that in the American popular culture,
there is an increasing move toward re-evaluating morals within society. This is evidenced by
the popularity of such books as The Moral Compass (Bennett 1995) which stresses the moral
stories and traditions of American culture. We can examine the proverbs of different cultures
to glimpse their core values. This is an interesting way of determining the historical emphasis
that a culture has placed on various virtues, however, many of these virtues may seem
irrelevant today.
We believe that it is important for all of us to consider the implicit and explicit
assumptions that lie behind our educational systems and bring those assumptions into any
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discussions we have on the existence and development of our values. If this debate is not
enlarged to include a discussion concerning values in business life, there is a danger that the
discussion will be limited within a "closed system", meaning only the professional ethics of
teachers. The question concerning values in business is difficult. At the conference, there was
an interesting presentation about the ways in which different values in business could be
combined. According to this approach, the core values for business (and other human
practices, too) are human dignity, love, trust, prudence and survival. Other values supporting
these values can be divided to environmental, economical, social and human values. Firms
can achieve success by following these values in the long run and the combination of these
values creates synergy. This could provide some guidelines for considering business
education values from a broad perspective that emphasizes more than just economical values.
A final topic of interest focused on communication and the use of language, especially
the increasing use of business language in schools. How does the use of business language
change the reality of schools and education? It is through language that human beings
construct their social realities and their cultures, and therefore, it is through language that
humans can be locked into or unlocked from these realities (Burrell & Morgan 1989, 295 299). As an example of this is the increasing use of the concept of a customer instead of a
student. If students are customers, are they active participants constructing the reality of a
school or are they just "objects of marketing"? In addition, the concept of a customer might
limit the broad educational task of schools. In our opinion, we should critically reflect upon
the language we use in schools.
12.7 THE APPLICATION FIELDS OF ETHICS
12.7.1
ETHICS IN MEDICINE
Medicine has been existed in the human life since the beginning of the history of
humanity. The illnesses were regarded as incurable and they generally resulted in death. In the
meantime, human being gave importance to the existence of the society, community or the
clan which they belonged to rather than their existence as an individual one by one and aims
at the continuity of the community. The foundation of medicine as laid in the Ancient Greek.
Curiosity of the human being directs to the human body as well as the philosophy and
astronomy. But the period before The Ancient Greek turned into be a period that should be
82
analyzed as what we experience today is the reminiscent of the things that happened at that
time. In the Primitive Times the causes of the illness were identified as the bad soul and the
witches were responsible for the treatment. The patients, thought to be under the control of
bad soul, were tortured by the witches in various ways. The witches had nothing to lose. They
would become hero or take away the pain of the hopeless people who are under the control of
the bad souls.
In the Ancient Greek rationalist approach and science paved the way to medicine. The
curiosity about the human body cause the anatomy to appear as a science and the human body
was examined. Dead bodies were examined, the structure of the human body was studied and
the first Atlas of Anatomy was composed. Contrary to the previous times in fighting against
the diseases, the causes of the illnesses were investigated and the people search for the
method of treatments although they were very simple. The medicines from the nature
amazingly succeed in treating the diseases which witches failed to do. Hippocrates, the owner
of the oath that is made by the doctors before starting to carry on their profession, laid the
foundation of the modern medicine.
In summary it can be said that rationalism wasn’t dominant in the Medieval Europe.
Religious functionaries searched for the remedies in The Holy Books in a period when
diseases were plaguing the people. Meanwhile the positivism gained importance within the
Muslim communities and especially within Turks, and they made use of those improvements
in the field of medicine. Ibn-i Sina (Avicenna) is accepted as one of the biggest man in
medicine. When the secrets of the human body deciphered, the motivation needed for the
further secrets was also provided so the modern medicine started to improve in the lights of
the rationalism.
Today ethics is an important concept in many subjects but the necessity of it in
medicine is felt more than the others. Ethics is defined as follows: ’’Ethics, the study of the
problems of the actions of individual in their personal life or the social life, is a major branch
of philosophy’’. This definition includes many elements addressing the medicine. The actions
of the individual while representing the health of the person also involve three major
debatable questions. Ethics, as a branch of philosophy, questions the actions of the individuals
in issue of euthanasia, human cloning, and abortion and aims to design a roadmap for the
humanity. In the framework of the study of the social life, ethic tries to establish a series of
rules regarding to the commercial policies of the drug companies.
83
Now we will focus on euthanasia, human cloning and abortion, in other words, the
subjects that affect the human life. Euthanasia is the right to terminate one’s own life. The
most important question here is whether euthanasia is ethical on the perspective of the
medicine or not? Because if this process is done by someone other than the doctor, that is
murderer, if the patient kills himself that is suicide. Today euthanasia is forbidden in many
countries.
Euthanasia is legal only in Netherlands as there are no legal arrangements regarding to
it. The most interesting example for this issue was experienced in Spain in 1991. An author, in
the advanced stage of ALS (Amyotrophic Lateral Sclerosis) wanted his friends to terminate
his life, in other words to carry out euthanasia, and because of the legal loophole the people
involved in the process didn’t receive any punishment. But it was discussed for a long period
of time whether euthanasia was the fundamental right of that patient or not and whether that
was an ethical action or not. Another example of this type was experienced in England. A
family doctor carried out euthanasia by administering lethal drug overdoses to his terminally
ill patients, who had no hope of cure. The doctor, who had carried out euthanasia without
informing the patients or their relatives, was then arrested and
sentenced to life
imprisonment for numerous murders. What is interesting here is unlike the rest of the society
the relatives of the patients didn’t hate or accuse him. In the public prosecution that they
couldn’t prevent, relatives of the patients claimed that in fact the doctor ended the pains of the
patients so helped them.
Ethics contradicts itself in this matter. There is no problem related to the moral values of
the individuals. The sides are aware that euthanasia is the last thing they can do, and the
doctors end the pains of the patients by carrying out euthanasia, and as taking away the pain is
one of the main objectives of their profession, nothing is wrong according to the medical
ethics. But on the other hand the violation of the right to live, which is the one of the
fundamental rights of the individual, is called as ‘’murder’’ in almost every laws .In the future
there will be discussions on euthanasia from an ethical perspective and it will turn into be a
right claimed by the people.
Another issue which is widely subject to debates among medical authorities is whether
the human cloning is ethical or not. Although the discussions not limited to medical
authorities diverts the issue, in principle it should be discussed in the medical environment.
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Although the medicine has the adequate technology infrastructure for human cloning, they are
waiting for the results of the discussions and the final decision. In theory human cloning is
possible. This situation, as the basis of the stem cell studies, will facilitate the human life in
some respects. Religious functionaries think that if this issue is represented as a ethical
problem, human cloning can be prevented .All sides participate in the argument by proposing
their theses on the issue.
Today another important issue that is discussed in the medical environment is abortion.
Today it is still discussed whether abortion, terminating the pregnancy and end the life of
fetus deliberately within the first ten weeks, is ethical or not. In US in the elections, parties
express their ideas on the issue and request ballot from the voters and the issue is always
under discussion. According to almost every law it is accepted that
the fetus that is in the
mother’s more than 10 weeks is a human person so the abortion will be regarded as murder
after ten weeks. First of all we want to make something clear: Abortion which is made in
order to protect the life and the health of the baby and mother is excluded from the ethical
discussions about this issue.
The policies adopted by the pharmaceutical companies have been under discussion from
the ethical point of view. The pharmaceutical companies are in a sector which is stranded at a
place between the social policies and their commercial purposes. In a situation like that it is
impossible to give utmost importance, or at least protecting the human life and health .Human
life and the health are the centre of pharmaceutical sector the so ethical dimension of the
policies of the companies discussed. In this sector there are lots of conspiracy theories and
well-known facts about this matter. For example malaria, a disease nearly disappearing in rest
of the world and seen as trivial, kills thousands of people in Africa and the low-cost drugs are
sold at an outrageously high price and that is the reason for which pharmaceutical companies
are criticized. Along with these well known facts, there are also some conspiracy theories.
The biggest conspiracy theory is related to the cancer patient. It is always said that
although many types of cancer can be prevented thanks to the gene treatment, and numerous
studies have been completed successfully .But because of the pharmaceutical companies these
treatment methods are not carried out. Moreover another terrifying conspiracy theory is that
the pharmaceutical companies produce the viral diseases in their own laboratories. Art of
medicine is as old as the history of the humanity and it seems that the discussions about the
ethical rules tried to be established will continue to be on the agenda of the world.
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12.7.2
ETHICS IN SPORT
Sport, the leading activity that attracts the crowds, means the reflection of the harmony
of the human body and intelligence in its purest term. Sport, in the way it is known today,
appeared when the idea of competition added to human activities. The human being competed
with himself, but sometimes he competed with another human being at the same time and
during this process, the improvement created by the competition became visible. In the early
years of the century, the world record for 100 meters was over 15 seconds but now it reduced
to 8-9 seconds, which is the clear evidence of the human improvement. The first examples of
sport organizations were the Olympic Games. The Olympic Games were dedicated to the
gods thousands of years ago. But what they serve as today? It isn’t hard to say, at least for the
major sports attracting the crowds, which they are actually far away from their real objectives.
Today sport is a huge industry. Tiger Woods, the sportsman who earns most, earns more
than many of the international companies in a year. Formula 1 authorities sign million-dollarcommercial contracts. States invest million dollars for the infrastructure and security systems
for the Olympic Games and World Cups taking place every four year and expect huge amount
of money from these events. Only the Barcelona-Real Madrid matches, watched by millions
twice a year in the Spanish League, provide the broadcaster million dollars income. Thus
supporting the idea that the sport and trade are separate and that the sport is only a means of
entertainment is unacceptable under the circumstances of today.
Is it necessary sports, no more a personal activity, have ethical rules? It is possible to get
various answers to these questions but we will emphasize the two basic ones. First of them is
the answer of sportsman who is interested in sport as an individual .As it is impossible to talk
about ethical rules for the individuals, it is difficult to determine their relation with the
existence of ethics in the sport. On the other hand, we should underline the ethical elements of
the sports attracting big crowds.
In theory any kind of ethical code can be formed about a community consisting of
people. Therefore, as the sport is an issue concerning people, we can talk about an ethical
code or general ethical norms. Amateur spirit requires respect for the rival, which is a moral
value that should be discussed within the framework of ethics. The rival is the indispensable
element for most of the sports. While analyzing the sport from an ethical point of view, it is
86
important suspicious components of it should be eliminated and sport should be the
representation of the fair competition. The sport has also economic aspect, besides winning
sometimes losing means earning money but it is beyond the ethics and it related to the moral
principles of the individual. In general the sport and sportsman should be free from the all the
ethical deficiency of the competition. Today sport becomes an activity that includes different
subjects such as economy, politic and it should be discussed from the ethical point of view.
12.7.3
ETHICS IN GLOBAL ECONOMY
Business ethics, in my view, can simply be defined in terms of social and ecological
responsibility of business. According to this definition, business ethics requires that business
decisions should not be made exclusively from the narrow, economical perspective, but also
the social and ecological concerns should be taken into account. This means that people who
work in the business life should consider how their economical decisions affect other people,
environment or the society on the whole. In other words, it means that the interests of all the
relevant parties or "stakeholders" are acknowledged and weighed.
This view can be contrasted with the claim that the responsibility of business is limited
to the interests of the shareholders. Thus, the managers of corporations should focus merely
on the economical factors in their decision making. As Milton Friedman has famously argued
"the social responsibility of business is to increase its profits".
The "stakeholder" approach to business is especially made known by Kenneth
Goodpaster who defines the term as follows: "A stakeholder in an organization is (by
definition) any group or individual who can affect or is affected by the achievement of the
organization's objectives." As examples of such stakeholder groups Goodpaster mentions
employees, suppliers, customers, competitors, governments and communities.
Many textbooks of business ethics seem to be primarily concerned with the
responsibility of individual firms and their managers. Social and ecological responsibility of
business, or the rights and duties of various stakeholder groups, are discussed from this point
of view. These books deal with problems and practices such as employee rights, advertising
or environmental issues that are in the interests of most companies. It seems, thus, that
business ethics strongly concentrates on the question of how individual business executives
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and single firms can improve their performance in ethical matters in the context of business
life.
This approach has, however, recently been criticized as inappropriate for the
circumstances of global economical competition of today. David Korten, for instance, has
argued that it is not realistic to expect that social and ecological problems could be resolved
by increasing the social responsibility of managers. Korten believes that many managers
acknowledge their responsibility. The problem is the global economical system that makes it
impossible for them to act as they think they should. In Korten's view, the global economical
systems work in a way that has been characterized as a "race to the bottom". This means that
corporations, and societies that want to have corporations and employment, are forced to
compete with lower salaries, taxation, safety regulations and standards for environmental
protection. In this kind of system, it is very difficult or even impossible to act in a way that
would benefit not only the shareholders but all the stakeholders and the society on the whole.
As Korten argues, "As local settings are opened to the global economy, it becomes possible,
and highly profitable, for a firm to take advantage of the differences between localities with
regard to wages, market potential, employment standards, taxes, environmental regulations,
local facilities, and human resources. This means arranging its global operations to produce
products where cost are lowest, sell them where markets are more lucrative, and shift the
resulting profits to where the tax rates are least burdensome."
If this is the case, the alternatives of individual managers are indeed very limited. What
is needed is not the discussion of the responsibility of individual corporations or managers,
but, rather, the discussion of the moral acceptability of the institutional frameworks within
which the global economy works. It is not the moral responsibility of individual mangers but
the general rules of the global economy that we should be concerned of.
I do not believe, however, that the situation is so unequivocal even for individual
corporations and their managers as Korten assumes. Corporations and entire sectors of
industry have created various systems of their own which help including ethical questions in
their decision making procedures. One of the best examples is the Responsible Care program
of the Chemical Industries Association. This initiative started in Canada on 1984 and spread
steadily around the world. The aim of the program is, as Erik Schokkaert and Johan
Eyckmans define it, “to improve performance through a public commitment of its members to
observe a set of guiding principles. These include operating to the best practice of the
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industry, concern for continuous improvement in health, safety and environmental policy, and
releasing all relevant information about activities to employees, customers and the public in
general. No formal sanctions are included in Responsible Care but it is obvious that members
cannot afford violate one of the principles since comparisons between companies are
published."
What is essential in this program, from the viewpoint of business ethics, is that it is not
concerned with single questions or problems but the entire course of action. It regards all
business activities from the perspective of health, safety and environmental issues. The effects
of the business operations to these issues are examined in every level of the organization and
the suppliers, subcontractors and other cooperators are also expected to follow the principles
of the program.
RC-program provides a good example of the serious concern for environmental issues
in today's business world. It seems, however, that the social responsibility is not as generally
acknowledged. Yet the social issues could be dealt with much in the same way. Social
questions could also be examined in every level of the organization and the responsibility of
the social effects of business activities could be included in the normal decision making
procedures of an organization. In fact, I think that there even exist programs which could
include social responsibility in their agenda.
One of such programs is a well known management technique, called Total Quality
Management (TQM). The principles of TQM can and do include many issues that have
usually been seen as the concern of business ethics. TQM principles emphasize, for instance,
long-term commitment to customers, employees, suppliers, cooperators and society on the
whole. They also require paying attention to the protection of environment and to the health
and safety of the citizens. These factors are examined when evaluating the performance of the
organization. They form a part of the criterion that determines the quality of its business
activities.
As in the RC-program also in the TQM -philosophy it is essential that the entire course
of action is considered. Total quality management techniques are designed to improve
performance, not only the external quality of the products. Thus, the "quality" is not related
only to the completed products or services but to entire performance of a corporation: the
organization and its strategies, policies and activities in general can be evaluated from this
89
perspective. Moreover, the factors that form the quality are to be observed in every level of
the organization and the suppliers, subcontractors and cooperators can also be required to
follow the given principles.
However, even if "quality" is in principle defined very widely in TQM, in practice it is
still often understood in quite a narrow way, as an external characteristic of the products or
services. The performance on the whole, during the entire process and through the entire
organization including also suppliers and cooperators, is not always examined from this
perspective. Nevertheless, I think that when properly understood, TQM can provide a useful
means to include ethical issues in the everyday decision making procedures of corporations.
As the RC-program, it also offers a way to improve the performance in ethical matters and
provides a criterion for evaluating the quality of the organization in its strategies, policies and
operations on the whole.
I think, however, that even though single firms and entire sectors of industry can do a
lot in ethical matters, question of the broader frameworks for business activities is still
important. Questions about the individual morality are beside the point if the moral
acceptability and satisfactoriness of these frameworks is not considered. Therefore, it is
necessary to ask about the conditions under which individual managers and corporations must
operate. Are the institutional arrangements within which the global economy works morally
acceptable and satisfactory? Do they encourage individual corporations and their managers to
take the social and ecological responsibility seriously or do they rather encourage making
decisions from the narrow economical perspective? What kind of institutional arrangements
would be required to make global economy work in a way that benefits all stakeholders and
the society on the whole?
The formulation of ethically satisfactory frameworks is the task that requires
international political cooperation. As Alistair Macleod has pointed out, the contribution of
individual firms or individual business executives to improvement of the moral quality of
business activities, is not always enough, but "the morally necessary change sometimes
requires the concerted action over time of many different individuals and organizations,
generally with the government playing the crucial role of facilitating or orchestrating such
action." In the circumstances of global economy, such facilitating actions must also be made
in the global political level.
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It is not easy, of course, to create such general rules or arrangements neither ethically
nor politically. Yet, the situation is not hopeless. In recent years there have been discussion
and even some agreement between different cultures and religions about the principles of
global ethics. Moreover, there have also been discussions about the need of "global
governance”, which is about the common, political action aimed at the control of global
ecological, economical and social problems. The developments in both directions are most
welcome. Global business needs global ethics and global politics if it is supposed to benefit
all stakeholders and the society on the whole.
12.7.4
ETHICS IN POLITICS
Every job has their descriptions to define their importance. The description of a job is
used as a map which is used to find the right way for reaching somewhere. Reaching
somewhere is very important in all parts of life. For organizations, establishing the goals is the
right way. On the other hand, reaching an important or significant position in an organization
should be the right way for a manager or employee. Right way is the critical problem for all
people or all organization, because in all parts of life, everybody needs to know some
protective laws to protect them from external forces. These laws, which should be prepared by
legal forces, are not always written. Sometimes ethical rules can regulate relationships
between people and organizations. The ethical rules are used as a light in a dark night to find
the way and reach the right position.
Every jobs or duties, which we can diversify with other example of the related items,
have some ethical rules and these rules are known by related sides of the works. For example,
assume a person, who is work in the medical sector, especially who is a doctor, must learn the
ethical approaches of the science and rules, which has been created in a long time period. A
patient is the must non-defensive creature in the world. The doctor, who does not know
anything about the rules of ethics, or does not want to apply to his or her job, can reach a lot
of benefits from his or her patients, but these benefits are not ethical probably. Assume a
person is a manager in a huge organization. The manager has all rights to direct the
organization, and he or she is only responsible to shareholders, who do not know all
information about the organization probably. If the manager forgets his or her duty, that is
explained as the maximization of wealth of shareholders, and creates new duties, which can
be explained as the maximization of wealth of managers, to him or her, the process will not be
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ethical in a sense of main purpose of the job. We can diversify these examples with different
kind of jobs, but at this point, we can give a core example to define the awful results of
unethical processes. This example is related to a job or science, which we are always related
and we are always talk about it. This is politics, which is written the first pages of papers and
first topics of news.
The political sciences have been developed after the improving of free thinking process.
Before the free thinking process, the politics is way to reach more money, more power and
more soldiers. The authority created with the power and the politics was used as a tool to
reach that power in the limited represented groups. Other people who were living in villages
and had no power without their working were not the core side of politics. After the free
thinking process, especially after the industry revolution, the politics were focused to the
people who have more numbers but less poverty. They must be persuaded to more work in all
industries. This persuasion process sometimes pointed an enemy, which was not directly
related to those people. They had to work more hard, because the enemy never felt
compassion to them. The right system was the current system immediately. The persuasion
system sometimes worked with the sense of humanity. People must think their children and
they must work hard. They must create a safety future for their children. There were a lot of
way to reach more power and more wealth with using politics from the people, who had no
idea about that game. The system, which had worked perfectly for a long time, created its
substitute and that new creation was called socialism. The political activities reached a new
form. From that point the new political environment has been divided into two main parts,
which are the main topics of politics. These new situation has created the new form of world.
These new form is not our main topic, but for understand the ethical situation of politics, the
information about the historical background of political conditions of world in a short
explanation.
The ethical dimensions of politics must be related to the social responsibilities. We can
explain this concept as a mathematical topic. There are two cells, which we can express; the
first cell’s topic is related to social responsibilities, the second cell is ethics in topics. The
concept of social responsibilities explains the general formation of responsibility ideas and
ethics in topics explain more specified items. As a result, the cell of social responsibilities
covers the cell of ethical topics.
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The social responsibilities are created by more rules in the science of politics. The
results of actions, which are done by politicians, have the widest effects on all communities.
With a wider thought, an action of a politician can affect the other communities’ members. At
this point, we must explain another concept, which is related to effects of action on different
communities. This is butterfly effect. The concept of butterfly effect is the effect of far away
factors to unrelated sides. Applying the butterfly effect to political science can be exampled
with an event as follow: The decision of a political authority is Australia should affect a
person, who lives in Turkey. For example, Australian government decide to change the time
period of non-citizen workers because of political reasons, the family, who lives in Turkey, of
a worker, who works in Australia, should lose its financial abilities or wealth because of less
working period of time of Turkish worker. On the other hand, there are so many different and
more serious political decisions, which can be evaluate in the concept of butterfly effect, can
cause more important changes of other or unrelated people’s life. As a result, social
responsibility is formed bigger and more diversified in the range of politics.
How can we reach ethical situation in politics from social responsibility? There are no
more special rules to change rules from social responsibility to ethical application in the
science of politics. The ethical rules have general concepts, which are used to define the
working process in politics. The political applications are generally differentiated from the
science of politics. In the real life, politicians can tell lie. In a normal situation, telling a lie is
not ethical for all people, who believe in some ethical rules, but if a politician tells lie, the
effect of lies should be more harmful. At this point, we can explain this situation with two
examples. The first one is most famous lie in the political life, which has been started for a
long time. The 42nd president of the United States of America is Bill Clinton. He was very
successful with the quantitative measures. In the period of Bill Clinton presidency, the
unemployment level of the United States reached the lowest level. The general economic
variables are more positive and the foreign vision of the United States was not negatively
occurred as these days, but when people talks about the term of Bill Clinton presidency term,
they will probably talk about the scandal of Monica Lewinsky. The sex scandal was a big
impact on the presidency of Bill Clinton. All details about the scandal were talked. Everybody
wanted an explanation from the president. The waited explanation was occurred but there
were some details, which was the reason of question marks in the mind of all people. Bill
Clinton rejected the relationship between him and Monica Lewinsky, and president repeated
this explanation in the formal meetings. At this point, there were two possible choices. The
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first one was: the president had not been in a relationship between him and Monica Lewinsky.
The second choice was: the president of the United States was telling lie. Michalle Starr, who
is a free judge, started to search the truth and the results should be the end of Bill Clinton
presidency. At the end of investigation, the president apologized from all people. The second
example, which is related to telling lie by politicians, is related to the prime minister of
Hungary. The prime minister of Hungary declared something about their economic policies,
which they had told lie. After these explanations, huge meetings were done by a lot of
participants. Everybody can tell a lie but effects of that lie are never huge as politicians’.
After reaching the concept of social responsibility, we can move to the concept of
ethical obligations. The ethical rules are created in the political improvement process. In these
days, the concept of ethics is discussed by people
12.7.5
ETHICS IN WORKPLACE
1. Recognize that managing ethics is a process
Ethics is a matter of values and associated behaviors. Values are discerned through the
process of ongoing reflection. Therefore, ethics programs may seem more process-oriented
than most management practices. Managers tend to be skeptical of process-oriented activities,
and instead prefer processes focused on deliverables with measurements. However,
experienced managers realize that the deliverables of standard management practices
(planning, organizing, motivating, controlling) are only tangible representations of very
process-oriented practices. For example, the process of strategic planning is much more
important than the plan produced by the process. The same is true for ethics management.
Ethics programs do produce deliverables, e.g., codes, policies and procedures, budget items,
meeting minutes, authorization forms, newsletters, etc. However, the most important aspect
from an ethics management program is the process of reflection and dialogue that produces
these deliverables.
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2. The bottom line of an ethics program is accomplishing preferred behaviors in the
workplace
As with any management practice, the most important outcome is behaviors preferred
by the organization. The best of ethical values and intentions are relatively meaningless unless
they generate fair and just behaviors in the workplace. That's why practices that generate lists
of ethical values, or codes of ethics, must also generate policies, procedures and training that
translate those values to appropriate behaviors.
3. The best way to handle ethical dilemmas is to avoid their occurrence in the first
place
That's why practices such as developing codes of ethics and codes of conduct are so
important. Their development sensitizes employees to ethical considerations and minimizes
the chances of unethical behavior occurring in the first place.
4. Make ethics decisions in groups, and make decisions public, as appropriate
This usually produces better quality decisions by including diverse interests and
perspectives, and increases the credibility of the decision process and outcome by reducing
suspicion of unfair bias.
5. Integrate ethics management with other management practices
When developing the values statement during strategic planning, include ethical values
preferred in the workplace. When developing personnel policies, reflect on what ethical
values you'd like to be most prominent in the organization's culture and then design policies to
produce these behaviors.
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6. Use cross-functional teams when developing and implementing the ethics
management program
It’s vital that the organization’s employees feel a sense of participation and ownership
in the program if they are to adhere to its ethical values. Therefore, include employees in
developing and operating the program.
7. Value forgiveness
This may sound rather religious or preachy to some, but it’s probably the most
important component of any management practice. An ethics management program may at
first actually increase the number of ethical issues to be dealt with because people are more
sensitive to their occurrence. Consequently, there may be more occasions to address people’s
unethical behavior. The most important ingredient for remaining ethical is trying to be ethical.
Therefore, help people recognize and address their mistakes and then support them to
continue to try operate ethically.
8. Note that trying to operate ethically and making a few mistakes is better than not
trying at all
Some organizations have become widely known as operating in a highly ethical manner,
e.g., Ben and Jerrys, Johnson and Johnson, Aveda, Hewlett Packard, etc. Unfortunately, it
seems that when an organization achieves this strong public image, it's placed on a pedestal
by some business ethics writers. All organizations are comprised of people and people are not
perfect. However, when a mistake is made by any of these organizations, the organization has
a long way to fall. In our increasingly critical society, these organizations are accused of being
hypocritical and they are soon pilloried by social critics. Consequently, some leaders may fear
sticking their necks out publicly to announce an ethics management program. This is
extremely unfortunate. It's the trying that counts and brings peace of mind -- not achieving an
heroic status in society.
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12.7.5.1
Key Roles and Responsibilities in Ethics Management
Depending on the size of the organization, certain roles may prove useful in managing
ethics in the workplace. These can be full-time roles or part-time functions assumed by
someone already in the organization. Small organizations certainly will not have the resources
to implement each the following roles using different people in the organization. However,
the following functions points out responsibilities that should be included somewhere in the
organization.
1. The organization's chief executive must fully support the program
If the chief executive isn't fully behind the program, employees will certainly notice -and this apparent hypocrisy may cause such cynicism that the organization may be worse off
than having no formal ethics program at all. Therefore, the chief executive should announce
the program, and champion its development and implementation. Most important, the chief
executive should consistently aspire to lead in an ethical manner. If a mistake is made, admit
it.
2. Consider establishing an ethics committee at the board level
The committee would be charged to oversee development and operation of the ethics
management program.
3. Consider establishing an ethics management committee
It would be charged with implementing and administrating an ethics management
program, including administrating and training about policies and procedures, and resolving
ethical dilemmas. The committee should be comprised of senior officers.
4. Consider assigning/developing an ethics officer
This role is becoming more common, particularly in larger and more progressive
organizations. The ethics officer is usually trained about matters of ethics in the workplace,
particularly about resolving ethical dilemmas.
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5. Consider establishing an ombudsperson
The ombudsperson is responsible to help coordinate development of the policies and
procedures to institutionalize moral values in the workplace. This position usually is directly
responsible for resolving ethical dilemmas by interpreting policies and procedures.
6. Note that one person must ultimately be responsible for managing the ethics
management program.
12.7.6
ETHICS IN MANAGEMENT (PLANNING, ORGANIZING,
LEADING, CONTROLLING)
Management is the most important aspect of business life. In literature, management is
defined by its functions and area of activities. We want to talk about functions of management
and its relations to ethics after the topic of managerial activities. In literature, management
defined as an art and science. The science part of management is defined by lots of academic
papers, books and theses. In management schools, especially Department of Business
Administration is related to find the right definition of management concept as a scientific
field. These researches are diversified by its fields and markets. For example, the scientific
explanation of production management is differentiated by its detailed research field from the
management of marketing, or management of marketing is differentiated from the
management of finance. Briefly, we can explain these detailed differences: Production
management is a basic way of quantitative research management and the decision of
production manager with the constraints of time, resource and labor. All these quantitative
data should be the output of Excel or Minitab work. Moreover, the assessment of production
executive may depend on some heuristic decisions. Heuristic decisions are affected by the
previous decisions of the production executive. The data which a marketing executive must
have related to his/her product are the data to present it to the executive. Under the light of
those data, it assists to determine when the product should be presented to the market or in
which stage of the life cycle the product is. For the finance executive, what is essential is the
accurate interpretation of data.
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Now we must talk about the other side of the definition of management. Management is
an art and needs the skills which are suitable for direct the others. All scientific investigations
try to solve the problem of directing the others. But there is not enough explanation which is
defined the nature and the rules of directing the others. At this point, the concept of
management as an art must be discussed. The management in an organization; is the most
important tool to create a strong body. All organizations do not need to reach the profit or
escape from loss, some organizations can be created for communities and profit/loss decision
is not important for them. All kinds of organizations must bee directed and this function is
done by management.
Sometimes, ethics in management is discussed in media with the topics of accounting
scandals, sexual harassments and other scandals.
The real topics of ethics in management are not covered these kinds of scandals. All
steps of management can be evaluated with ethics, because all actions of people are related to
ethics.
Ethics in management comes from the main ethical concepts. For example, the justice
and honesty of managers are parts of main ethical attitudes. Especially at the stage of
decision, ethics is very important topic. Hiring or lay of an employee, decision of pricing the
wages, using resources, and other managerial activities must be apart of ethical decisions.
The main interest of managerial ethics is the routine transactions of managers and
organizations, the relationships between managers and employees or managers and customers.
The design of a product or monitoring the life cycle of a product financial transaction is the
key term of defining the managerial ethics.
Managers who work in multinational organizations use their power to reach the
successful position of their organizations. What are these kinds of powers? The first one is the
economic power of organizations. Economic power is the ability of controlling the demand,
directing the quality of product or service and price of goods. At the same time, economic
power is the source of other powers. The second one is the social and cultural power. Social
and cultural power is the source of directing or coordinating the other cultures. The third one
is technological power. This power is the advantage of firms which use huge amount of
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money for their research and development departments. The fourth one is political power.
Political power of organization is used for shaping or directing the political environment with
the economic tools of organizations. The fifth one is the power on physical environment. This
is related to use the natural resources. On the other hand, domestic improvements are the
results of this power. The sixth and the last one is the power on individuals. Individuals who
are in the accessing area of the organizations might shape their decision, because of this
power.
Managers, use the natural and human resources for their personal or organizations
benefits in their economic activities. Powers of managers can reorganize the shape of and the
size of their organizations. Reorganization must be under the control of social authorities. If
the balance between the power of managers and social authorities is destroyed, the unwritten
rules must be used by managers who are under the control of social responsibilities.
There is no importance of the choice of managers, which is related to the ethical
approaches. The most important event in this process is the attitudes of managers behind the
actual events. Ethical analysis is a real and actual systematic process, not randomly evaluated.
Result of an action gives information to evaluate ethical results. Employees, who want
to work in an organization, can search the ethical attitudes of the organization with the
economic power of the organization. For example, if a management of an organization leads
its employees for a short term benefit in a process of long term objectives, management can
create a place which has some shortcuts of ethics. This should be a reason of rejection of the
job by candidates. At first we must say this; ethical problems are not legal problems. If
managers do not interest their employees as good as their customers, this should be an
unethical process of the managers.
To measure the unethical situations of managers, we can measure the rest of the
organization, which is the result of shortcuts of ethics. Ethical problems are not legal
problems, but at the end of this process, financial and legal problems should be seen.
Managers who tell lie and steel are not good people to work with them for employees. Shortterm benefits can be reached by telling lie or steeling, but the long-term benefits can not be
earned with these method. In the view of employees, less productivity, illnesses and other
situations should be result of unethical attitudes of managers.
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At this point, we must talk about the managerial functions the organizations. We
evaluate the ethical situations in all managerial functions step by step. Four topics of
management are the functions. These are planning, organizing, leading, controlling. Planning
is the first step and the most important function of management. All managers have forecasted
information for future operations. These operations should be the topics of planning
production, human resource management or finance. Plan the operations in a topical order are
related to the skills of a manager. What should be the ethical approaches of managers in the
process of planning? Managers must need to know the purpose of the transactions. If a
manager answers “What is the main purpose of my organization?”, he or she will probably
start to plan. There must be some ethical constraints about planning. For example, a new
product created and the production process has some handicaps about pollution.
There are two alternative plans. The first one has an environmental approach and high
establishment costs because of the cleaning system which decreases the effects of dangerous
outcomes of production.
The second alternative has no environmental approach, for this reason the costs are
lower than the first plan, but the outcomes of production will probably be dangerous for
environmental and will be the reason of pollution. The legal authorities or government can
regulate the plan of manager with lacus because of the pollution, which is the result of
outcomes of production. The regulation of managers has different types. First of all, using
high pollution taxes can be a barrier to establish a production plan, which is dangerous for
environment. The second method should be the auditing of organizations by related
government agencies for regulation the organizations. If there are not special regulation plans
for managers, which is established by governments or legal authorities, which kind of rules
work as a regulator for managers? The right answer is related to ethical decisions of
managers, who are socially responsible. In our example, a manager who selects the first
alternative to protect the environment, despite the high costs, has positive evaluation in terms
of ethics. The second alternative should be selected but we never explain with positive ethics
which is a result of social responsibilities. Production planning is just an example about this
topic.
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The second managerial function is organizing. The organizing is first function of
management on the action field. After planning is done, managers must create an action body,
to reach the objective. The ethical structure of the manager is important for defining the
organizing function.
The third management function is leading. A project was planned by managers after that
the organizing function is started. Leading function is the art side of the management.
The fourth management function is controlling. Controlling the whole groups and
activities of the organization is related to the size of the organization. Using ethical rules is
important.
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