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The private sector is faced with numerous ethical issues on a daily basis. Most of these dilemmas come out of managerial approach and personal style of leadership while other have their origins in different day to day situations. The dilemmas come off problems that make decision making the process difficult when business owners have to select between making the correct decision and what looks a corporate loss. When a private institution is confronted with such a situation the profit motive should be strong to influence which the owner will take. However, any decision that has to be made will have some consequences. When these concerns are extremely undesirable many notwithstanding proceeds the business needs to look the other way. Lack of ethics in an institution contributes to structural disappointment, deteriorating client relationship and loss of the created reputation. Businesses need to avoid becoming prey to the things that lead to deterioration of business ethics especially in legal circumstances.
Private businesses are vulnerable to the practice of unethical business practices because they don’t have a central code of conduct which must be followed universally like government organizations. Every organization is run differently by a management chosen by the business entity. Most of the times the owner of the organization is the head of the business and so he does make regulations to be followed. Understanding ethical responsibilities of private organizations will automatically contribute to their reputation, growth and its operations. Before pointing out ethical issues in the private sector we need to first understand what business ethics mean and how it relates to business operations. Business ethics refer to a bunch of rules of dealing with values that relate to the nature of individual’s behavior. The ethics balance profit acquisition and values of the society. The managerial philosophy taken by the head of an organization is one of the main factors lead to an ethical dilemma.
One of the ethical dilemmas that are emerging in the private sector is the greater good dilemma. This dilemma is common in innovation industries. It appears when a private organization is faced with the question of a morally problematic behavior. An example of an action that can bring moral dilemma is animal testing or test tube breeding. The process leads to the production of goods and services that can but it doesn’t need to benefit a lot of people in the long run. While undertaking such an action can be problematic ethically, it is a guarantee that the undertaking will be beneficial in terms of aspired beneficial effects.
An example of a greater good dilemma is the situation where an organization may have an idea for creating a cure to a certain lethal disease that may save many lives in future. However, the process of developing such a cure requires testing to be done on living animals and human beings that may eventually lead to their deaths. The process might also require the application of control groups that are tested with the new medicine and whose members will die at some point. Other activities that fall under greater-good dilemma is pollution of the environment during the production process. If the organization decides to desist from this action, it will not be able to contribute to curing a lot of people and it may miss an opportunity to increase the sales of the company. This ethical issue touches on a number of aspects.
The first area that it touches on is that is touches on the inner code of conduct. The company has to decide which area of interest will bring the greater good to the company at the end of the day. The company runs the risk of going against its set ethical values. Other the interfering with the morals of the company such ethical dilemma create social tension with the neighboring society. The company will find it hard to exist in every part of the society. Engaging in non-ethical issues will make the company lose the social acceptance of at least one part of the group. Lose of social acceptance in return is likely to lead to a reduction of customers which could hit the sales of the business. Greater good dilemmas have unseen consequences which can be characterized as real dilemmas. There is no right and wrong solution since every action has both its own advantages and disadvantages. All of these consequences are serious and morally thought-provoking.
A perfect example of a greater good dilemma is interfering with the social setup of a particular environment. A private company can decide to start a new type of service delivery in a new market with the potentially big market. In doing so the company will have to introduce some practices that are new in the area. Even if the operations of the company may be beneficial to the area where it exists, it might be engaging in practices that are not socially accepted in the area. Take for example a company that promotes entertainment services. Such a company can decide to open an entertainment joint in a completely new area where such services have never existed before. On the ethical point of view, the company will be offering services that do not resonate with every age group. The entertainment services may be in the form of a nightclub. The music that would get played from the joint will be high thereby leading to noise pollution. The noise will act as a disturbance. Another moral issue that may relate to the existence of a nightclub in an area is deterioration of morality among the young. Many nightclubs play vulgar music and are associated with young people engaging in bad behavior. Young people can start copying this behavior and become socially irresponsible people in the society.
Despite negative effects of such a private business entity, there are a few advantages that come with it. The entertainment joint will create job opportunities for the locals. A good number of people will be required to work the joint on different jobs. Other than jobs, the entertainment joint will make urbanize the area and invite different people from different areas. The joint will expose the area to other people. However, ethical issues in business entities have outweighed the benefits and that is why the issues are controversial in the first place. In the case of the example mentioned above, the noise that is produced by the entertainment can be so loud that it can make the surrounding place inhabitable. The joint will also erode social principles of the place because more young people are likely to engage in activities that they witness in the club which is not good for the society. In the long run.
In the long run when this ethical issue will override the benefits that it brings to society because the business will continue to get alienated from the society. When it reaches a stage where the customers of a business start getting concerned with the ethical issues that arise the business needs to reevaluate its policies to enable it to coexist with the surrounding environment. Internally when a business is faced with ethical issues its credibility and trust in the industry decreases. Customers want to deal with companies that they can fully trust and that need be relied upon. When the level of trust decreases it simply means that the company is diminishing. The reputation of such a company will decrease and it will no longer be able to bring in many profits like before. Develop a good reputation is not easy and the business needs to adhere to standards of every stakeholder including the nearby society. Bad reputation leads to increased low sales which in turn leads to a poor financial performance.
In conclusion, business ethics provide a business with structures for handling moral situations or dilemmas. It is important to understand the nature of the business and the various stakeholders that are associated with the business and how they impact to the success of the business. It is important to engage in practices that demonstrate that the business values its customers and wants to retain all of them. While striving to make profits do not take shortcuts that can lead to a compromise in ethical values and bring damage to the credibility and the trust of stakeholders. It is advisable to develop and mission and strong vision that focus on ethics and social responsibility.
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