MGT 216 Week 1 Individual Assignment Ethics Issues
MGT 216 Week 1 Individual Assignment Ethics Issues
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Date Created: 11/12/15
Ethical Issues Paper Business Ethics Business ethics refers to practices in business which is fair honest and just In an ethical business executives and shareholders would not profit financially by laying excessive costs of burdens on others Where personal ethics come down to moral questions such as right and wrong business ethics can have much wider and more farreaching consequences Business ethics include such issues as treatment of employees sustainable practices honest labeling product safety fair competitive practices and management of financial risk One ethical issue for businesses right now has to do with nancial reporting After the debacle of Enron and Arthur Andersen in the late 90 s companies have been held to higher standards of ethics in their accounting practices The SarbanesOxley Act of 2002 requires stricter internal controls defines required independent audits and increases personal responsibility for failures in accounting practices for senior executives Even though companies are held to higher standards they can still be more or less ethical in their financial reporting and their management of risk For example in t he current economic climate we ve seen many banks fail because they allowed themselves to become overexposed to risky mortgages and other real estate investment The lack of foresight and selfmonitoring on the part of these banks has led in large part to the current recession Another ethical issue is the treatment of employees Labor unions in many industries have taken employee rights a long way and yet some large corporations are still strongly antiunion WalMart is one of the main practitioners of unionbusting its poor treatment of employees is one of the reasons that it can keep its prices so low Some of its unethical practices include stocking its stores with products made in US and overseas sweatshops pricing corporate health insurance so high that most employees can t afford it and keeping pay rates and promotions so low that employee turnover remains high which in its turn prevents union organization Store wars nd WalMart employees also complain of unpaid overtime illegal appropriation of breaks and being Ethical Issues Paper locked into warehouses over night to prevent theft Greenhouse 2002 This becomes a major factor in communities that have a WalMart as the number of people they employ and the low pay rates and lack of benefits affects the overall standard of living in the area Because the presence of a WallMart tends to lead to the extinction of small businesses people in the community have fewer options for work and become more likely to accept the low pay rates and terrible working conditions A final issue in ethics has to do with environmentalism Companies are known to externalize costs which means incurring longterm costs but making someone else pay for them An example of this is in disposition of waste products Companies that dump toxic ef uent into rivers use resources unsustainably or pump huge amounts of carbon dioxide into our already over warmed planet are behaving unethically They are creating costs to society and profiting from them but they are not paying the costs themselves Instead they are pushing those costs onto other people When legislation gets in the way of these unethical practices some companies simply pay the fines which cost less than giving up the revenues associated with them In other cases no legislation exists and yet the practices are clearly wrong For example consider strip mining in which huge swaths of earth are removed and highly toxic chemicals such as arsenic are used to leach minerals from the soil This practice is very destructive to the earth but since the costs of cleanup are not completely borne by the company that profits from it it still continues Business ethics concern everyone Companies especially megacorporations have a lot of power to shape the world we live in With their financial power they can even shape legislation or determine who our leaders are If they do not act ethically then a lot of damage will be done With an ethical stance however in which they voluntarily repair their own environmental damage treat their employees fairly and are honest about their financial transactions our communities can be enhanced by businesses Ethical Issues Paper References Greenhouse S 2002 Suits say WalMart forces workers to toil off the clock Retrieved January 9 2010 from httpWWWsullivancountvcomid2wa1 martnot paidhtm Store Wars When WalMart comes to town nd Retrieved January 9 2010 from httDWWWDbsorgitvsstorewarsstores3html What is SarbanesOxley nd Retrieved January 9 2010 from httpWWWtech faqcomsarbanesoxleyshtml
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