Type: Definition Essays
Sample donated: Hugh Poole
Last updated: September 26, 2019
Alec SomersteinProfessor LayishMGMT 150: Ethical Issues in Business January 27, 2018Business Ethics Ethics, or ethical, is a word that is often misused and overused in society, yet every single person deals with ethics and has to make ethical decisions on a daily basis. Many think ethics is doing the ‘right’ thing when a situation or problem arises. However, an ethical thought process could end in an ethical and poor decision, or an unethical and good decision. For example, your neighbor gives you a cake as a gift one day and it is the worst cake you have ever eaten.
The next day they ask you if you enjoyed the cake… and now you are in an ethical dilemma. Lying, as we all know and have been told by our elders constantly as children, is a terrible act and should never be done. Lying to your neighbor and telling them the cake they made was delicious may not be a ‘right’ decision but it is definitely the most ethical one, as it is the nice thing to do and it does not result in any negative consequence. This example, although straightforward and simple, illustrates the complexity of ethics and ethical decision-making. To give an exact definition, according to Merriam-Webster, ethics is “the discipline dealing with moral duty and obligation… a set of moral principles and a consciousness of moral importance.
” Ethics has a strong emphasis on morality and inner thought and consciousness. For that reason, ethical decisions made by an individual are mainly internal and differ person to person as people possess different senses of morality and moral compasses. This also adds to the complexity of ethics, which is why different ‘types’ of ethics can be separated into different groups or areas of study. There are three major areas of study regarding ethics: Meta-ethics, Normative ethics, and Applied ethics. The first two groups are focused on the ‘big picture’ and deal with theoretical meanings and values. The third group, Applied ethics, incorporates the actual decision making processes and results of a person making ethics-based decisions. Business ethics falls into Applied Ethics.
Business ethics examines moral or ethical problems that arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and entire organizations. Business ethics is also the study of policies and practices dealing with controversial issues. Some examples of controversial issues are “insider trading, bribery, discrimination, and corporate social responsibilities.” Also, law determines business ethics and is one of the major factors that go into business decision-making. When laws change, the decisions made by businesses change. The importance of business ethics emreged in the 1960’s as businesses saw changing consumer mentalities as consumers showed concerns with the environment, social causes and corporate responsibility. Business ethics combines what companies must do legally with maintaining a competitive advantage over other businesses.
Firms figure in business ethics in several ways. This is what makes it different than normal ethics. Business ethics has a whole other aspect to it besides the ‘right versus wrong’ concept; morality and legality is paired with the desire to have a competitive advantage, essentially increased profitability. This extra factor changes the way business make decisions immensely. In most cases, business put profitability and competitive advantage first, but in a way where they highlight a decision’s positive moral value. Also, business ethics ensure that a “certain required level of trust exists between consumers and various forms of market participants with businesses.” For example, a wealth manager must put forth the same effort towards the portfolios of friends as they do with small individual investors; this ensures that businesses are equitable.
Ethics classes have been taught for years in college classes. In the past, ethics classes were usually seen in the philosophy or psychology departments, strictly for social science study, and there was ethics in business or in the workplace. However, with unethical business practices becoming more prevalent in society, teaching ethics should be of utmost importance to business schools.
Professor Abe Bakhsheshy, an instructor of Business Ethics at colleges in Utah said “in order to be successful in business you need to collaborate, work in teams, and get the respect of others. If you are unethical, cheating and lying, you lose people’s trust,” which will end your career prospects very quickly. Business ethics will demonstrate to the college student what to do and how to do things correctly and ethically, and most importantly, will teach students what not to do in the workplace. Businesses have more responsibilities now; it is not just to make profits, but business focus on the Triple Bottom Line, where social and environmental actions/responsibilities are just as important as the profit margins.. Business ethics, as stated previously, started to become of interest in the 60’s, and have become increasingly important since.
For example, “since the early 2000s, when the financial markets crashed, people have been demanding more responsibility from business leaders. There was no accountability then and businesses were immune because no one was being held accountable. Now it’s essential to show the future leaders of said businesses the rewards of doing business ethically while still achieving financial reward.” If they do not learn now of ethical decision-making, they will not know for the future. Teaching ethics is something that should not be taken lightly. The best way to teach business ethics is through primary lecturing so students have a basic understanding of business ethics and then through case studies/real life examples. This will give students a much better understanding of business ethics and will help them in the future when dealing with similar situations in their own businesses. There have been many examples of ethical and unethical business situations, especially in the recent past.
Last year, there were many large businesses that dealt with ethical decision-making. One company that displayed ethical decision-making was Equifax. Equifax Inc. is a credit reporting agency.
Headquartered in Georgia, Equifax was founded over a hundred years ago in the late 1800’s. It is one of the three largest credit agencies, along with Transunion and Experian. Equifax has $3.1 billion in yearly revenue and over 9,000 employees.
It is a publicly traded company on the NYSE (EFX) and is an S 500 Component. It offers credit and demographic related data and services to over 88 million businesses all over the world, as well as credit monitoring and fraud prevention services directly to over 800 million individual consumers. On September 7, 2017, Equifax announced a cybercrime of identity theft, possibly impacting over 140 million U.S. consumers. Although the breach was stated to have begun in May, the breach was not found until July 29, according to Equifax CEO Rick Smith.
Hacker(s) accessed included first and last names, Social Security numbers, birth dates, addresses and, in some instances, driver’s license numbers. Credit card numbers for 200,000 U.S. consumers were also accessed.
Equifax hired the services of Mandiant on August 2 to internally investigate the breach. It was unclear exactly when government authorities were notified of the breach, although it known that the company continues to work closely with the FBI in its investigation. Equifax shares dropped 13 percent the day after the breach was made public. Numerous lawsuits have been filed against Equifax as a result of the breach. One case in particular is asking for $70 billion in damages, which would make it the largest class-action suit in U.
S. history. Equifax said the breach was made possible due to a flaw in Apache Struts.
A fix for this issue was released March 7, yet the company did not update on the software before the attack occurred 2 months later. However, this was not its only failure: Equifax had “an insecure network design which lacked sufficient segmentation, potentially inadequate encryption of personally identifiable information (PII), and ineffective breach detection mechanisms.” On September 15, Equifax issued a press release about the breach, its consequences for consumers, and what the company plans to do in response to the attack. The company also announced the immediate departures and replacements of its Chief Information Officer and Chief Security Officer.
On September 28, 2017, new Equifax CEO Paulino do Rego Barros Jr. responded to criticism of Equifax by promising that the company would, from early 2018, allow “all consumers the option of controlling access to their personal credit data,” and that this service would be “offered free, for life.”There are a few aspects of unethical decision-making seen here. Primarily, Equifax knew of the system flaw that ultimately led to the breach and withheld that information until months after the the news came out that the data breach. It was evident that the CEO and other executives were trying to hide this fact as to protect themselves and try to not be accountable of this terrifying data breach, a breach that could very possibly ruin millions of lives as the information stolen was quite sensitive.
It is possible that Equifax was trying to cut corners when not fixing its software even though there was a viable update to fix it. The company did not care of the faulty software in March and did nothing to fix it, as to possibly not pay for it – an unethical decision that put many lives in danger of credit fraud among other terrible things. Secondly, Equifax withheld the breach from the public for months. With something as grand, disastrous, and deleterious as this data breach, Equifax should have told the public as soon as they found out. This is another unethical decision that put people’s livelihoods in danger.
In the beginning of the paper, I talk about how ethical does not necessarily mean good. This can be brought into the Equifax example. It was a good decision for the company to not spend the money on updating faulty software, however it was unethical as it led to a data breach and put hundreds of thousands of people’s information in danger. In conclusion, business ethics is an important and necessary topic for all students to learn about as they will be the future leaders of business and they can only benefit from know ethical versus unethical behaviors and decisions inside a business scope. Works Cited”About.” Equifax, Equifax, Inc.
, 2018, www.equifax.com/personal/.
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