Implications of ethics beyond organizational view and influence on individual and corporate decision making

Author: Iloka Benneth Chiemelie

Published: 21st of June, 2014

Introduction

In the modern business, ethics is no longer an ordinary philosophy that is studied in books. Instead, it is now part of every business decision making process as companies are obliged to review their business activities and limit harms to the environment from such activities. Considering that they are different approaches (e.g. individualistic and psychological) leadership, it wouldn’t come as much surprise that literatures on ethical leadership has focused mostly on virtue ethics – which is based on the ethics of character of leaders. Majority of the studies on ethical leadership has focused on the impact on businesses (e.g. profitability through increased brand loyalty), while neglecting the impacts beyond businesses. Thus, understanding the impact beyond businesses and how sense of responsibility affects the action of leaders (as individuals) and businesses (as a unit) is the center of this discussion.

Implications of ethics to organization: a view beyond the business side

Takala (1998) presented one of the most comprehensive argument on how ethics impacts on organizations beyond its borders by stating that “the virtue of responsibility or justice as is fundamental to moral philosophies of virtue ethics allows people to recognize as well as respect others’ rights, which emerges as the foundation of defined obligations and sense of duty exercised for the welfare and happiness of other people (Arjoon, 2000, p. 162). Thus, ethics allows both business leaders and followers to respect the rights of other people (whether in the organization or outside the organization); promoting equality, harmony, respect, and togetherness in the process. It could be said that, ethics has a positive impact beyond the organization by reducing conflicts due to lack of respect for other people’s rights.

Since ethics entails doing the right thing at the right time, it also reduces negative impact of corporate activities on the society. For instance, an ethical system will ensure that the company doesn’t emit and spill toxic materials into the system; doesn’t poison the air; doesn’t undertake business activities in ways that contradicts with local cultures and belief, and so on. Thus, ethics can be said to have positive impact on sustainability (Arjoon, 2000, p. 162) by eliminating dangers that business activities pose to overall sustainability of the environment.

Influence of sense of responsibility on individual and corporate decisions

On the individual sense, responsibility for others calls to mind the fact that individuals are not independent. This is because for actions or conversations to occur, individual engage in face-to-face interaction with other, and it is necessary to bear in mind that these orders also have needs that must be meet. The face ushers in the primordial discourse whose first word is the obligational word (Plato, 1993). Thus, sense of responsibility influences individual decisions by highlighting that the needs of other people cannot be denied just because of existing rights or simply because these other people exist. The very existence of others makes individuals morally responsible and this responsibility is both limitless and undeniable. In essence, ethics influences individual decision making by highlighting that “others” exist and such decisions should reflect the needs of others (communism and centralized) instead of the liberal individualism, utilitarianism, or deontological nepotism.

Influence of ethics in corporate decision making focuses more on the unavoidability of failing into law (Levinas, 1998), once a multiplicity comes into play. Bauman (1993, p. 113), made known that this is the point decision makers depart from the realm of “proper morality” and enters into the realm of “social order.” Rules and regulation are important when it comes to maintaining social order (Durkheim, 1887 quoted in Giddens, 1971, p. 70) and they are many ethical rules for corporations across the world. In essence, the influence here is that ethical decision making in the organization are those based on respect and value for the laws and cultures of the society that such businesses exist. As such, ethical decision making in the business sense allow businesses to undertake their activities in ways that doesn’t violate existing laws of the state.

Conclusion

In conclusion, ethical practices should focus more on those that promote values and solidarity in the communities, instead of those that express heroism in ethical sense of liberal individualism. Ethics is important for both individual and corporations. This is because it allows individuals to include other people’s feeling in their decision making process, while ushering the right path for corporations to obey the laws and cultures of the society they operate in.

References

Arjoon, S.: 2000,  Virtue Theory as a Dynamic Theory of Business, Journal of Business Ethics 31, 65–76.

Giddens, A.: 1971, Capitalism and Modern Social Theory: An Analysis of the Writings of Marx, Durkheim and Max Weber (Cambridge University Press, Cambridge).

Levinas, E.: 1991/1998, Entre Nous: On Thinking of The Other (European Perspectives). Translated by Michael B. Smith and Barbara Harshav (Columbia Univ Press).

Plato: 1993, ‘Republic’ translated with an introduction by Desmond Lee (Penguin, London).

Takala, T.: 1998,  Plato on Leadership, Journal of Business Ethics 17, 785–798.