Business Goals versus Personal Values

Ethical conflicts in business sometimes occur when a company pursues goals or uses methods that are unacceptable to some of its employees. "Whistle-blowing" may be one outcome, if an employee "goes public" with a complaint after failing to convince the company to correct an alleged abuse. Another recourse for employees caught in these situations is a lawsuit, as happened in the following case.

A pilot for Eastern Airlines charged in court that he had been given undesirable flight assignments and was suspended from work for insisting, without success, that certain safety improvements should be made on cockpit equipment that later was implicated in a fatal airplane crash.

The ethical dilemma here arose because the company's goals and methods required the employee to follow orders that he believed would harm himself, other employees, the company, and the general public. His own ethical compass was at odds with the goals and methods of the company.

Cross-cultural contradictions

Some of the knottiest ethical problems occur as corporations do business in other societies where ethical standards differ from those at home. Today, the policy-makers and strategic planners in all multinational corporations, regardless of the nation where they are headquartered, face this kind of ethical dilemma.

US sleepwear manufacturers discovered that the chemicals used to flameproof children’s pajamas might cause cancer if absorbed through the child’s skin. When these pajamas were banned from sale in the US, some manufacturers sold the pajama material to distributors in other nations where there were no legal restrictions against its use.

This episode raises the issue of ethical relativism. Should ethical principles take their meaning strictly from the way each society defines ethics? What or whose ethical standards should be the guide?

As business becomes increasingly global, and as more and more corporations penetrate overseas markets where cultures and ethical traditions vary, these questions will occur more frequently. Employees and managers need ethical guidance from clearly stated company policy if they are to avoid psychological stresses. A company must not use local custom as an excuse for violating laws of corporate policies; it should conduct its business according to a higher standard.

Some who study international business ethics say that such higher standards of ethics already exist. They point to numerous treaties and codes of conduct for regulating the activities of multinational corporations regarding environmental protection, equitable treatment of employees, laws against bribery, and protection of basic human rights in the workplace.

Focus on text comprehension

1. Answer the following questions using information from the text.

1. What is ethics? What questions does it involve?

2. Why does ethics play such an active role in our lives?

3. What does business ethics focus on?

4. What examples of business ethics questions can you give?

5. How are ethics and law connected?

6. Does unethical necessarily mean illegal? Justify your answer.

7. What ethical problems can be caused by personal gain?

8. Who is called an ethical egoist? What traits of character does he/she possess?

9. Why are companies with low profits more prone to commit unethical acts?

10. Is unstable financial position the only reason for illegal and unethical business behavior? Justify your answer.

11. When does such practice as price-fixing occur? Why is it considered to be unethical?

12. What other unethical business practices can you name?

13. What can happen if the goals a company pursues or the methods it uses are unacceptable to some employees?

14. Why are the knottiest ethical problems related to corporations doing business in societies that have other ethical standards?

15. How should companies deal with this ethical dilemma?

2. Comment on the following statements using information from the text.

1. Law cannot exist without ethics.

2. Legality cannot be relied upon blindly as an infallible standard for action.

3. Ethical egoists are a danger to the company.

4. Competitive pressures make companies resort to unethical business practices.

5. Local custom cannot be an excuse for unethical business behavior.