Business Ethics

Ethics is one of the main branches of philosophy and can be called the science of moral reality. It tries to elucidate moral problems through cognitive exercise. Ethics can also be understood as a philosophy on morality, good, evil and duty. It makes specific judgments about what is right or wrong, which is to say, it makes claims about what ought to be done or what ought not to be done. Business ethics can be examined from various perspectives, including the perspective of the employee, the commercial enterprise, and society as a whole. Very often, situations arise in which there is conflict between one and more of the parties, such that serving the interest of one party is a detriment to the other(s). For example, a particular outcome might be good for the employee, whereas, it would be bad for the company, society, or vice versa. Business ethics as the principles and standards that determine acceptable conduct in business organizations. The acceptability of behavior in business is determined by customers, competitors, government regulators, interest groups, and the public, as well as each individuals personal moral principles and values. Many specialists think also Peter Drucker that there is no difference between day by day ethics and business ethics. An outgoing person, an ambitious one or a liar behaves the same way in the office, as well as he does outside of it, therefore we cannot imitate or differentiate clearly this conduct, hence the necessity of business ethics must not be proven. The most basic ethical and social responsibility concerns have been codified by laws and regulations that encourage businesses to conform to societys standards, values, and attitudes. For example, after accounting scandals at a number of wellknown firms in the early 2000s shook public confidence in the integrity of Corporate America, the reputations of every U.S. company suffered regardless of their association with the scandals. To help restore confidence in corporations and markets, Congress passed the Sarbanes-Oxley Act, which criminalized securities fraud and stiffened penalties for corporate fraud. At a minimum, managers are expected to obey all laws and regulations. Most legal issues arise as choices that society deems unethical, irresponsible, or otherwise unacceptable. However, all actions deemed unethical by society are not necessarily illegal, and both legal and ethical concerns change over time. Business law refers to the laws and regulations that govern the conduct of business. Many problems and conflicts in business can be avoided if owners, managers, and employees know more about business law and the legal system. Business ethics, social responsibility, and laws together act as a compliance system, requiring that businesses and employees act responsibly in society.

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The Role of Ethics in Business

Well-publicized incidents of unethical and illegal activityranging from accounting fraud to using the Internet to steal another persons credit-card number, from deceptive advertising of food and diet products to unfair competitive practices in the computer software industry strengthen the publics perceptions that ethical standards and the level of trust in business need to be raised. However, it is important to understand that business ethics goes beyond legal issues. Ethical conduct builds trust among individuals and in business relationships, which validates and promotes confidence in business relationships. Establishing trust and confidence is much more difficult in organizations that have reputations for acting unethically.

Recognizing Ethical Issues in Business

To understand business ethics recognize ethical issues is the most important step. An ethical issue is an identifiable problem, situation, or opportunity that requires a person to choose from among several actions that may be evaluated as right or wrong, ethical or unethical. In business, such a choice often involves weighing monetary profit against what a person considers appropriate conduct. Ethics is also related to the culture in which a business operates. In the United States, for example, it would be inappropriate for a businessperson to bring an elaborately wrapped gift to a prospective client on their first meetingthe gift could be viewed as a bribe. In Japan, however, it is considered impolite not to bring a gift. Experience with the culture in which a business operates is critical to understanding what is ethical or unethical. Ethical issues can be more complex now than in the past. The vast number of news-format investigative programs has increased consumer and employee awareness of organizational misconduct. In addition, the multitude of cable channels and Internet resources has improved the awareness of ethical problems among the general public. Many ethical issues in business can be categorized in the context of their relation with abusive and intimidating behavior, conflicts of interest, fairness and honesty, communications, and business associations. Abusive and Intimidating Behavior Abusive or intimidating behavior is the second most common ethical problem for employees. These concepts can mean anything from physical threats, false accusations, being annoying, profanity, insults, yelling, harshness, ignoring someone, to unreasonableness; and the meaning of these words can differ by person. Abusive behavior can be placed on a continuum from a minor distraction to a disruption of the workplace. For example, what one person may define as yelling
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might be anothers definition of normal speech. Civility in our society is a concern, and the workplace is no exception. The productivity level of many organizations has been diminished by the time spent unraveling abusive relationships. Conflict of Interest A conflict of interest, the most common ethical issue identified by employees, exists when a person must choose whether to advance his or her own personal interests or those of others. For example, a manager in a corporation is supposed to ensure that the company is profitable so that its stockholder-owners receive a return on their investment. In other words, the manager has a responsibility to investors. If he instead makes decisions that give her more power or money but do not help the company, then he has a conflict of interest he is acting to benefit herself at the expense of her company and is not fulfilling her responsibilities as an employee. To avoid conflicts of interest, employees must be able to separate their personal financial interests from their business dealings. Fairness and Honesty Fairness and honesty are at the heart of business ethics and relate to the general values of decision makers. At a minimum, businesspersons are expected to follow all applicable laws and regulations. However, beyond obeying the law, they are expected not to harm customers, employees, clients, or competitors knowingly through deception, misrepresentation, coercion, or discrimination. Honesty and fairness can relate to how the employees use the resources of the organization. Communications Communications is another area in which ethical concerns may arise. False and misleading advertising, as well as deceptive personal-selling tactics, anger consumers and can lead to the failure of a business. Truthfulness about product safety and quality are also important to consumers. Claims about dietary supplements and weight-loss products can be particularly problematic. Business Relationships The behavior of businesspersons toward customers, suppliers, and others in their workplace may also generate ethical concerns. Ethical behavior within a business involves keeping company secrets, meeting obligations and responsibilities, and avoiding undue pressure that may force others to act unethically. Managers, in particular, because of the authority of their position, have the opportunity to influence employees actions. For example, a manager might influence employees to use pirated computer software to save costs. The use of illegal software puts the employee and the company at legal risk, but employees may feel pressured to do so by their superiors authority.
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It is the responsibility of managers to create a work environment that helps the organization achieve its objectives and fulfill its responsibilities. However, the methods that managers use to enforce these responsibilities should not compromise employee rights. Organizational pressures may encourage a person to engage in activities that he or she might otherwise view as unethical, such as invading others privacy or stealing a competitors secrets.

Corporate social responsibility

In the classical view, "The only social responsibility in business management is to maximize profits", but in terms of socio-economic, "social responsibility beyond profit management, including protecting and enhancing the welfare of society as a whole. The World Business Council for Sustainable Development in its publication Making Good Business Sense by Lord Holme and Richard Watts, used the following definition, Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large. The concept of corporate social responsibility means and responsibility to be a bear to public organizations, but also required companies to comply with legal and ethical standards both in the public and private. CSR is about how companies manage the business processes to produce an overall positive impact on society. Many consumers and social advocates believe that businesses should not only make a profit but also consider the social implications of their activities. We define social responsibility as a businesss obligation to maximize its positive impact and minimize its negative impact on society. Although many people use the terms social responsibility and ethics interchangeably, they do not mean the same thing. Business ethics relates to an individuals or a work groups decisions that society evaluates as right or wrong, whereas social responsibility is a broader concept that concerns the impact of the entire businesss activities on society. Corporate citizenship is the extent to which businesses meet the legal, ethical, economic, and voluntary responsibilities placed on them by their various stakeholders. It involves the activities and organizational processes adopted by businesses to meet their social responsibilities. A commitment to corporate citizenship by a firm indicates a strategic focus on fulfilling the social responsibilities expected of it by its stakeholders. Corporate citizenship involves action and measurement of the extent to which a firm embraces the corporate citizenship philosophy and then follows through by implementing citizenship and social responsibility initiatives.

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Corporate Social Responsibility in Bangladesh CSR concepts and practices in Bangladesh have a long history of philanthropic activities from time immemorial. These philanthropic activities included donations to different charitable organizations, poor people and religious institutions. Till now, most of the businesses in Bangladesh are family owned and first generation businesses. They are involved in community development work in the form of charity without having any definite policy regarding the expenses or any concrete motive regarding financial gains in many instances. Moreover, most of the SMEs fall under the informal sector having low management structure and resources to address the social and environmental issues. The discussions on CSR practices in Bangladesh in its modern global terms, are relatively new, but not so for the concept itself. Because, being a part of the global market, it is difficult to ignore CSR standard specifically in the export sector. In general, it is true that in Bangladesh, the status of labor rights practices, environmental management and transparency in corporate governance are not satisfactory, largely due to poor enforcement of existing laws and inadequate pressure from civil society and interest groups like Consumer Forums. CSR in Bangladesh can also contribute a lot to community development. The corporate house can develop the community by creating employment, providing primary education, contribution to infrastructure development like road and high-ways and addressing environmental concerns. This is more relevant for a country like Bangladesh where the government interventions in these fields augmented by corporate alliance can go a long way in developing the economy, society and environment. Lack of enforcement of Industrial Laws and Regulations, weak unions, absence of consumer rights groups and high level of corruption within the regulatory bodies make CSR violation rampant in Bangladesh. Two most significant foreign exchange sources are the RMG sector and the overseas manpower export. Unbelievably low compensation, working hours, health/hygiene/sanitation conditions, fire safety and various types of abuse are so common and to the extent of inhumanity that will shock any conscientious individual to the core. Recently, the RMG sector employees have embarked on an industry wide movement to establish their rights. In addition, private sector entrepreneurs lack expertise and are not efficient and competent enough to take advantage of the open economy. The government has recognized the need for educating the private sector and is undertaking some programs. However, this is not done on a large scale and nor is the potential exploited sufficiently for NGOs to be involved to educate the private sector on business ethics and issues of CSR. Corporate Social Responsibility Activities of BSRM Group BSRM has pioneered a whole range of modern methods for quality assurance and excelled itself in strategic marketing, consumer research, products innovation and development. BSRM is a symbol of quality in the arena of Steel Re-Rolling whose products are widely recognized to be of international standards. In steel Industry in Bangladesh, BSRM is often use as the synonyms of Durability, strength, Reliability, and Economical.
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BSRM Group of Companies is involved for the welfare of the society since its inception in 1952. They have donated to a number of socio-cultural organizations, educational institutions and religious seminaries over the years. After BSRM Steels Ltd. came in to existence, they decided to re-organize their CSR activities. Similar to our effort in 2009, they have donated a significant number of road dividers to the Chittagong and Dhaka Metropolitan police authorities including other division and district. Another CSR activity is the BSRM School. It was established in 2005 in the heart of a slum at Bayezid Bostami area in Chittagong, for the benefit of the poor people who live in the near vicinity. The majority of the population in that area falls under the category of the poorest of poor, many of them working as rickshaw pullers, day laborers or employed at menial jobs in small shops. The schools mission is to provide free education to the children of this particular slum. No fee of any sort is charged from the students. At present, there are 330 students enrolled in the school and plans are underway to expand the premises in order to give opportunity to a greater number of children. In the year of 2010, they donated for Nimtoli fire incident victims. They also distributed 10,000 blankets among the poor and needy people this winter. They organized blood donation program. To enrich the quality of education and research they donated an expensive UTM device to the Civil Engineering Department of BUET.

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References
1. Carmina Simion Simescu Martinho Nunes, University Valahia Targovite, Romania and Alexandra Simion Simescu, University of Philosophy, Bucharest, Romania Ethics and corporate social responsibility - a strategic approach within the organization, Studies and Scientific Researches - Economic Edition, no. 15, 2010, O. C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 6th ed. (Boston: Houghton Mifflin, 2005), Baker Mallen, article on Corporate social responsibility - What does it mean?- Published June 8, 2004 Holme Lord and Watts Richard, Making Good Business Sense published by The World Business Council for Sustainable Development Probir Mondol Edward, Why Corporate social Responsibility?- The Context of Bangladesh Published by Corporate Social Responsibility Bangladesh Foundation, July 20, 2009

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