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Business
Ethics MGT610
VU
LESSON
02
INTRODUCTION
(CONTD.)
Although
ethics is a
normative study of
ethics, the social sciences
engage in a
descriptive study
of
ethics Other fields, such as
the social sciences, also
study ethics; but they do
so
descriptively,
not normatively. That is,
they explain the world
but without reaching
conclusions
about
whether it ought to be the
way it is. Ethics itself, on
the other hand, being
normative,
attempts
to determine whether or not
standards are
correct.
A
normative
study is an
investigation that attempts to reach
normative conclusions--that
is,
conclusions
about what things are good
or bad or about what actions
are right or wrong.
In
short,
a normative study aims to discover
what should be.
A
descriptive
study is one that
does not try to reach any
conclusions about what
things are
truly
good or bad or right or wrong.
Instead, a descriptive study
attempts to describe or
explain
the
world without reaching any
conclusions about whether
the world is as it should
be.
Business
ethics is a specialized study of right
and wrong applied to business
policies,
institutions,
and behaviors. This is an important
study since businesses are
some of the most
influential
institutions within modern
society. Business organizations are
the primary economic
institutions
through which people in modern
societies carry on the tasks
of producing and
distributing
goods and services. They provide
the fundamental structures
within which the
members
of society combine their
scarce resources--land, labor,
capital, and technology--into
usable
goods, and they provide the
channels through which these
goods are distributed in
the
form
of consumer products, employee salaries,
investors' return, and government taxes.
Today
large
corporate organizations dominate
our economies. In 2003, General
Motors, the world's
largest
automobile company, had revenues of
$195.6 billion and employed
more than 325,000
workers;
Wal-Mart, the world's
largest retailer, had sales of
$258.7 billion and
1,400,000
employees;
General Electric, the
world's largest maker of
electrical equipment, had sales
of
$134
billion and 305,000 employees; and IBM,
the world's largest computer
company, had
revenues
of $89 billion and 319,000
employees.'
Modern
corporations are organizations
that the law treats as
immortal fictitious "persons"
who
have
the right to sue and be
sued, own and sell property,
and enter into contracts,
all in their
own
name. As an organization, the
modern corporation consists of (a)
stockholders who
contribute
capital and who own the
corporation but whose
liability for the acts of
the
corporation
is limited to the money they
contributed, (b) directors and
officers who
administer
the
corporation's assets and who
run the corporation through
various levels of
"middle
managers,"
and (c) employees who
provide labor and who do the
basic work related directly
to
the
production of goods and services. To cope
with their complex
coordination and control
problems,
the officers and managers of
large corporations adopt formal
bureaucratic systems of
rules
that link together the
activities of the individual members of
the organization so as to
achieve
certain outcomes or objectives. So
long as the individual
follows these rules,
the
outcome
can be achieved even if the
individual does not know
what it is and does not
care
about
it.
Though
business ethics cover a
variety of topics, there are
three basic types of
issues:
1.
Systemic
issues ─
Questions
rose about the economic,
political, legal, or other
social
systems
within which businesses operate. These
include questions about the
morality of
capitalism
or of the laws, regulations,
industrial structures, and social
practices within
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Business
Ethics MGT610
VU
which
American businesses operate.
2.
Corporate
issues ─
Questions
rose about a particular
company. These include
questions
about
the morality of the
activities, policies, practices, or
organizational structure of an
individual
company taken as a
whole.
3.
Individual
issues ─
Questions
about a particular individual
within an organization and
their
behaviors and decisions. These include
questions about the morality
of the
decisions,
actions, or character of an
individual.
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