Business Ethics at British Telecom

Introduction

British Telecom was first introduced in 1980 as a service provided by the Post Office Telecommunications division of the British Post Office Department. On the first of October 1981, Post Office Telecommunications changed its official name to British Telecom. British Telecom became am autonomous state-owned corporation. In 1982, when a license was provided for Mercury Communications, the monopoly of British Telecom in the telecommunications industry was broken.

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In November 1984, 50.2% of the shares of the British Telecommunications plc were sold to the public. The company adopted the trading name ‘BT’ on April 2, 1991. The remaining share of the state in the company was subsequently sold to the public in 1991 and 1993. In 1996, Peter Bonfield was chosen to be the Chief Executive Officer and Chairman of the Executive Committee of BT.

British Telecom is currently the biggest provider of communications service in the United Kingdom. It is also considered as one of the largest companies in the communication industry worldwide. British Telecom is a publicly listed company in the London Stock Exchange and it is included in the FTSE 100 Index.

British Telecom is now officially named as BT Group plc. Before privatization, British Telecom was a state-run telecommunications operator. At present, it is considered as the major fixed line telecommunications and broadband Internet service provider in the United Kingdom. British Telecom’s operations spread in over one hundred seventy countries (The BT Story, March 2009)

Key Principles and Approaches in Business Ethics

In assessing the business ethics practice of a company, it should be examined from different perspectives. These perspectives include the perspective of the employee, the firm itself and the society in general. Most of the time, situations occur that lead to the conflict of interest between parties. In these kinds of situations, when the interest of one party is served, it would mean a disadvantage to another party. Ethicists like Henry Sidgwick suggests that the role of ethics in an organization is to reconcile and harmonize the conflicting interests of the parties involved in the organization.

Other philosophers like Milton Friedman are not in favor about the role of business ethic for the society. These people suggest that the primary function of a business is to maximize the returns for the owners or to its shareholders. Thus, in applying this view, actions that do not add to the profitability and shareholder value must be discouraged.

Proponents of this view believes that companies that put profit maximization as its top priority are the company that are most likely to survive in a competitive marketplace. On the other hand, companies must still be cautious because there are laws and basic moral rules to be followed. Failing to obey these rules might lead to costly fines, revocation of their license or staining the company’s reputation.

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Some people argue that organizations do not have the ability of moral agency. In this regard, ethical behavior should be focused on the individuals that comprise the organization and not on the organization itself.

Other views propose that every business has moral responsibilities not only to its owners or stockholders. These responsibilities do not only talk about obedience to the law. Aside from a company’s stockholders, businesses have moral responsibilities to its stakeholders. These stakeholders are composed of other individual that have interest in the conduct of the business. Employees, customers, suppliers, business partners, local community and the society in general can be considered as a stakeholder (Hartman, 2004)

A so-called social contract theory to business is adapted by some people. In this approach, companies must practice quasi-democracy in which employees and other stakeholders must be given a right to participate in the decision making of the company. However, critics say that this approach overlooks a main idea, that a business is not a mini-state; a business is owned by someone.

The most popular practice that is adopted by most companies with regards to addressing the issues of ethical conduct is the formulations of internal policies that should be followed by its employees. Policies like this can be expressed in very broad and general language or more commonly called as corporate ethics statement. Other companies formulate corporate ethics codes. These are more comprehensive policies that normally include very particular behavioral expectations. Its duty is to provide the company’s requirements to its workers regarding ethical behavior and also it gives guidance on how to handle some of the most frequent ethical issues and problems encountered in the business.

A good practice involving business ethics is to give employees seminars about appropriate business conduct. Discussions in these seminars normally include company’s policies, case studies and other legal requirements. Requiring employees to sign an agreement saying that they will follow the rules of conduct of the company is also a good practice in addressing ethical issues.

Most ethicists propose that an ethics policy should be: clearly supported by the top management and shown by both word and actions; described both orally and in writing with regular reinforcement; possible to be done and performed by the employees; periodically monitored by the top management and regularly inspected for its compliance and improvements; accompanied with clear rules for consequences in cases where disobedience in the ethical policy occurs; neutral and does not incline to a particular group of people (George, 1999)

Business Ethics Practice in British Telecom

British Telecom has adopted a policy where business integrity as its main core. The company is committed to maintain the highest standards of corporate ethics and governance in all its operations worldwide. The company claims that they have been in compliance with the provisions specified in section 1 of the 2003 Combined Code on Corporate Governance.

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The company’s business practice and code of ethics is defined in “The Way We Work”. It is published for its employees and it is also available online for the reference of everyone. The business principles set out in this statement apply to all employees, contractors, agents and other people who represent British Telecom. Another statement, the code of ethics, complements the statement of business practice. The code of ethics involves the basic principles that the officers must follow.

The company’s statement of business practices and code of ethics stresses the company’s commitment in addressing ethical issues. It involves the basic ethical rules of acting within the law, licensing obligations and other regulations that the company must follow. The statements also address the company’s responsibility toward its competitors. The company asserts that they will compete fairly in their market while maintaining honesty and trustworthiness in all of their dealings.

The company is directly against bribery and any other forms of inducements that would affect company’s decision making. Employees are also required to report and record any incident of inducements and bribery. Conflicts should also be avoided as stated in its statement of business practice. The company believes that such conflicts may lead to the division of personal loyalties. Ensuring the trust of other people in the makings of agreements is also mentioned in the code of ethics of the company.

Assessing and managing risks is also a priority of the business. The company also ensures the confidentiality of information that they get from employees and customers. The company also vows to be fair and impartial with regards to any gender or race. The company also recognizes their responsibility towards the health and safety of their people and the people in their environment.

Aside from these, the company also has aspirations and specific commitments not only to its shareholders, but also for its employees, customers, suppliers and in the communities in which the company operates.

In resolving conflicts, the company also provides guidelines and a set of questions that might help the person that is involve in such conflicts. In the search for help and advice, there is a helpdesk available for people who face conflicting demands. It can be made available from their manager or in the company’s intranet.

The company is committed in fighting fraud, financial impropriety, abuse or any other violation in their business principles. Everyone is required to communicate the issues they face in order to measure and appropriately report the performance of the company in addressing problems regarding the principles. Disciplinary actions should be given to those who failed to follow the expectations set out in the company’s statement of business practice and code of ethics (The Way We Work: A statement of business practice, 2008)

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Conclusion

As have seen in this paper, British Telecom is really committed in running the business in the most ethical way possible. The company does not only put focus in the interests of the shareholders. It is also concerned in the interests of its stakeholders such as its employees, customers, suppliers and the community. The ethics policy of the company is clearly supported by the top management. Regular monitoring for updates and improvements is also in practice. Disciplinary actions are available for those who disobeyed the ethical policies. These are also indications that the company performs well in managing the ethical issues that are present in the company.

References

“The BT Story” (2009). Web.

British Telecom Corporate Governance. (2008). “The Way We Work: A statement of business practice”. Web.

George, Richard T. de. (1999). Business Ethics. Prentice Hall.

Hartman, Laura. (2004). Perspectives in Business Ethics. Burr Ridge, IL: McGraw-Hill.

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