Business Ethics and Managers’ Responsibilities

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Introduction

In this paper, seven articles that are related to the issues of ethics in management have been reviewed. The paper focuses on the moral responsibilities of managers, moral dilemmas, the ideas of absolutism and relativism, and the ethics of reflective action research. It is concluded that the managers are under growing pressure to ensure the ethical nature of their conduct in various spheres of their activities including research, but they can benefit from this requirement.

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Literature Review: Managers as Moral and Ethical Agents

Responsibilities and Imperatives

The idea that power corrupts is not a new one, but it can be challenged. For example, Badaracco (1992) describes such an observation as “grim” and “unrealistic” (p.64). The author demonstrates that managers are expected to deal with numerous moral dilemmas, which indicates that to be successful, they need an understanding of ethics. Badaracco (1992) does not deny the existence of immoral practices in business, but he insists that morality is a requirement for a business person because he or she is expected to be ethical and committed on four levels: as a person, economic agent (serving the stakeholder), company leader (given the power over employees), and the citizen of the world. Similarly, Holt (2006) counters the view according to which ethical conduct of managers is not their responsibility or duty as long as their practice is lawful. Rather, Holt (2006) insists that moral practice is “integral to good managerial practice” (p. 1659). Holt (2006) suggests that phronesis (an Aristotlean term, the “practical wisdom,” ability to sense the limits that are set by the society) is a quality that is important for business practice and that can greatly improve its outcomes by providing the “user” with public acclaim and useful insight into the most effective means of conversation.

Lovegrove (2014) develops the idea that managers can and should stick to ethical conduct and insists that it would be useful for them to study ethical theory and philosophy and train to use it in practice. Lovegrove (2014) reviews a book by Joseph Gilbert and demonstrates that the tools which it contains are capable of improving a manager’s ability to resolve ethical dilemmas.

The years of the articles’ creation appear to indicate that the demand for the ethical responsibility of managers has been growing. Such is the observation of Ibrahim, Angelidis, and Tomic (2009). Their study demonstrates that managers believe that ethics is important for a company and that codes of ethics can and should be developed to facilitate the resolution of important dilemmas (Ibrahim et al., 2009, pp. 348-349). To sum up, ethical conduct is currently regarded as a responsibility of managers; they embrace this view and develop tools to help them carry out this responsibility.

Differences and Rationale for Decisions

Moral dilemmas are the issues, the solution to which is not obvious. In business, they can involve the problem of firing a friend or a single mother or, for example, offering a bribe in order to allow your workers to keep their workplaces (Badaracco, 1992; McDonald, 2010). Moral issues are controversial, and they tend to be offered different solutions in different contexts. For example, firing a single mother of five children is an unethical decision. However, if she causes conflicts, refuses to respect her colleagues, and is unwilling to cease aggressive behavior and start to cooperate, firing may be a necessary decision. This case demonstrates situational relativity, in which moral dilemma depends on the situational context (McDonald, 2010).

Moving Towards a More Relativist Perspective

Holt (2006) analyzes Aristotle’s observation of people avoiding to follow moral rules blindly and criticizes the view that the specifics of activities are irrelevant for their moral value, that is, he opposes absolutism. On the other hand, McDonald (2010) insists that absolutism does not presuppose the elimination or ignoring of multiple moral views and practices. He does assert that, according to the absolutistic approach, there must be some universal standards, but they are supposed to be based on the requirements of human nature and survival. It is not clear, though, who is expected to judge human nature.

Relativism highlights the fact that moral norms differ across groups, circumstances, and centuries and invites us to consider them equal. Relativism is diversity-friendly and suggests assessing the moral value of activity within the context. For instance, bribery is illegal everywhere but, surprisingly, “facilitation payments” to people of power are often considered a requirement in some countries (McDonald, 2010, p. 448). The danger of developing unethical decisions through relativism is apparent, but it is noteworthy that the relativity can diminish when the topic and the area of ethics application (for example, industry) is defined (McDonald, 2010). For instance, careful handling of information is more important for a governmental agency than for a grocery store. General considerations are more likely to benefit from relativism, but they are hardly practically applicable, and in practice, it may be more logical to develop the guidelines for particular recurrent issues (Ibrahim et al., 2009). As a result, relativism can and should be regarded as a philosophy that promotes learning your business partner from another socio-cultural group, but it is not as imperative to commit crimes in the view of one’s country.

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Reflexive Action Research

Action research (AR) presupposes the combination of action and research that is carried out as “insider research” (McKay & Marshall, 2001). As a result, it is a process that is immediately practical and is concerned with applying, testing, and improving various solutions. For example, a study of the communication issues between the managers and the employees that are carried out by themselves (possibly, with the help and consultation of an outsider) can be considered an AR. To make the research reflective, the people involved need to think critically “examining critically the assumptions underlying our actions, the impact of those actions, and from a broader perspective, what passes as good management practice” (Cunliffe, 2004, p. 407). Naturally, AR raises the issue of objectivity, which is why an outsider, who should be an active research specialist, is suggested for the improvement of the study. If the study is collaborative, there are the issues of ownership, rewards, and responsibility and these ethical issues need to be resolved with the help of discussions and meetings. Ethical conduct is important for managers in every field of activity, including research.

Conclusion

Modern managers are apparently under greater pressure to ensure ethical conduct in every one of their practices (including research), and nowadays, unethical business activities hardly receive any support in the theory of management. However, the relative nature of ethics and morals persists, and it can be claimed that the guidelines differ within various socio-cultural and situational contexts. To assist managers in understanding moral guidelines and resolving ethical dilemmas, theorists work to provide them with suitable tools and training.

References

Badaracco, J.L. (1992). Business ethics: Four spheres of executive responsibility. California Management Review, 34(3), 64-79.

Cunliffe, A. L. (2004). On becoming a critically reflexive practitioner. Journal of Management Education, 28(4), 407-426.

Holt, R. (2006). Principals and practice: Rhetoric and the moral character of managers. Human Relations, 59(12), 1659-1680.

Ibrahim, N., Angelidis, J., & Tomic, I. (2009). Managers’ Attitudes Toward Codes of Ethics: Are There Gender Differences? Journal Of Business Ethic, 90(S3), 343-353. Web.

Lovegrove, I. (2014). Ethics for managers: philosophical foundations and business realities. Action Learning: Research And Practice, 11(1), 113-118. Web.

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McDonald, G. (2010) Ethical relativism vs absolutism: research implications. European Business Review, 22(4), 446-464.

McKay, J. and Marshall, P. (2001). The dual imperatives of action research. Information Technology & People, 14(1), 46-59.

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