Ethical Issues faced by CEO’s
Business ethics or corporate ethics
have become an integral part of the corporate world. Business ethics is defined
as the study that deals with evaluating businesses’ decision-making processes
based on moral principles. This concept basically aims to promote the business
practice for operators to maintain balance between honest or fair operations
and profitability.
The application of this concept in
business had eventually become complex as companies expand their operations to
foreign countries; ethics-related issues appear to vary depending on the
business site or location. Nonetheless, ethics had been recognized as an
important element of successful business operations. This had been emphasized
further by scandalous business cases due to lack of business ethics. Ethics in
business establishes an entities reliability and reputation with its clients.
Certainly nobody would want to be in business with a company or another person
who is known to be a fraud. Ethics provide necessary boundaries that will
ensure fair practices and opportunities for different industries.
All companies have
obligations for shareholders as well as stakeholders. CEO of the company has to
take decisions to meet obligations for both parties. CEO of the company is key
decision maker. Taking
ethical decisions may not be in the best interest for them but they have to
take them for the benefit of company. Recent events have
demonstrated the destructive effects that occur when the leadership of a
company does not behave ethically. One might wonder why highly educated,
successful, and business savvy corporate professionals at Enron, Tyco, WorldCom,
and Adelphia got themselves into such a big mess. The main problem lies in profound lack of
ethical issues.
In case of fall of Enron, executives took wrong decisions
and may have involved in illegal decisions. The company started out
successfully; however, due to insufficient practice of ethical business
operation, the company eventually failed and went bankrupt. Furthermore, the
management’s poor decisions due to inadequate critical thinking skills also led
the organization to become financially unstable. The Mc-Graw Hill Companies, a
leading firm in financial and education services, have listed out various
ethical codes for the organization. They range from CEO’s, Directors to
employees. They have tackled this problem by making CEO’s responsible for reporting
the financial statements.
Business ethics are very
important in Hospitality industry. The
main objective is to serve people or tourists, a service that is morally
acceptable should be delivered. This form of business also makes use of natural
or environmental resources for its operation; the protection and conservation
of these resources on the other hand require ethical protocols. In the
hospitality industry, understanding the differences among customers is
essential for success. This makes ethical consideration very important. This
aspect of the industry emphasizes the role of ethical considerations.
Specifically, reduction of various types of pollution, prevention of
environmental damages and the provision of support to environment-oriented agencies
are part of this movement.
We can conclude that a business
that lacks ethical principles is bound to fail sooner or later. It is a hardcore fact that no
company can be a successful organization without the presence of ethics in its
composition. Hence, it is the responsibility of CEO of the company to make sure
that they run profitable business without compromising with ethics.
Citations
·
Code of Ethics for Chief Executive
Officer and Senior Financial Officer. The Mc-Graw Hill Companies. 28 Jan. 2004.
·
Importance of Ethics in Business.
Henry Posters.
August 2003.
·
ABB
anti-desertification project helps protect power supplies in northern china.
ABB Press Releases. 7 Dec. 2009.
·
The Power of Ethical Management. Kenneth Blanchard and Norman
Vincent Peale. New York: William Morrow
and Company, Inc., 1988.
·
Executive Pay and the Financial
Crisis: A Refresher Course. Michael Corkery. Wall Street Journal Blog. 18 Sep.
2009.
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