The Essay On Practical Approaches To Business Ethics And Corporate Governance.

Write an essay on an aspect of professional/business ethics. An indicative essay topic is: “Explain how moral and/or spiritual commitments may influence the decisions, directions and implicit assumptions of leaders and organisations. 

Business ethics and relationship building

Business ethics is an is a kind of pragmatic ethics which examines moral principles or ethical issues that takes place within business environment. It is applicable in every aspect of business conduct where the range of ethical issues reflects the amount to which business is professed to be in odds with social and non-economic values (Amakobe, 2016). Issues in business ethics and conflicts along with successes revolves around relationship building where effective relationship edifice has become primary concern for most of the contemporary organisations (Ferrell, Fraedrich, & Ferrell, 2014). This essay proposes to find different aspects related to professional ethics and corporate governance to compare and contrast the opinions regarding aforementioned topic and its relevancy to contemporary organisations.

Spiritual leadership intrinsically motivates and inspire employees through faith and vision of service provided to key stakeholders along with setting a corporate culture according to the values of altruistic love for producing highly motivated, productive and committed workforce. The spiritual commitments tap to the core needs of both employees as well as leader’s well-being to create a value congruence and vision across the empowered teams and organisational level. These further fosters higher performance level, organisational commitment, social responsibility and financial outcomes- triple bottom line (Jr, Gabreil, & Vanquez, 2018). However, Ferrell, et al. (2014) puts in front more practical approach to ethics in business. Moral, according to the authors are personal philosophy regarding what is wrong and what is right. The authors pinpoints that although moral views can be used while taking business ethical decisions, principles act as a pervasive boundary under which behaviour must not be violated thereby defining ethics as a behaviour within groups value. 

The significance of spiritual commitments is acquiring a considerable position in contemporary workplaces and as an emerging concept in business management. Present literature believes that “spiritual” do not always means “religious”. Agbim, Ayatse & Oriarewo (2013) accepts that unethical business practices within business circle is gaining much attention in government and academia. Most of the ethical codes of conduct, code of practice and punitive measures are being applied to control the menace. Nevertheless, the authors argue that despite the fact that spiritual commitments influence people choices and assumptions with others in a positive way, spirituality while making ethical decisions is not been explored by present business sufficiently. Therefore, the current practices indicate that spiritual values, ethical behaviour, and virtues are inter-related to some extent. On contrary, today’s firms believe in formal systems of control and accountability of ethical as well as responsible behaviour, also known as corporate governance (Pless & Maak, 2011). Adda, Azigwe & Awuni (2016) further ascertains that while business ethics includes moral obligations and behavioural guidance, corporate governance proves to be an integrative management concept that establishes responsible behaviour among organisations leaders. 

Spiritual leadership and corporate culture

Under the theory of corporate governance, board of directors or the leaders of organisation provides over sightedness for taking critical decisions like ethical decision related to relationship with stakeholders, risk management, internal control and executive compensation. Thereby making ethical leadership associated with corporate governance. Indeed, this statement can be proven by cases seen in present organisations which leads the marketplace due to ethical stances seen in their ethical business decisions along with corporate responsibility (Ferrell, Fraedrich, & Ferrell, 2014). Even Adda, et al. (2016) supports the above viewpoint and adds further that ethical behaviour in business along with corporate social responsibility can bring critical benefits to the businesses. The notion behind businesses having social responsibility than making profits only for its stakeholders has been evolving around since past few decades. This can be due to the reason behind firms taking accountability as a significant part in corporate governance. Accountability states how closely workplace decisions are aligned to firm’s strategic direction and compliance with legal and ethical considerations (Ferrell, Fraedrich, & Ferrell, 2014).

Similar viewpoint is shared by Singh & Singh (2013) where the authors state that, moral statement may assert particular action of certain manner that may be professional or unprofessional, making distinctions between bad and good characters or ethical assumptions. However, in the context of professional ethics and professionalism, business enterprises do hold ethical and corporate responsibilities towards society, including economic mission gaining and creating value for stakeholders. Thus, Fry & Egel (2015) calls for spiritual leadership after recognising change in professional and personal lives of business leaders. The authors agree that integration of spiritual commitments with organisational decisions may lead to positive changes along with workplace effectiveness. There are few evidences that shows spiritual programs not only leads to beneficial outcomes like commitment and job satisfaction, but also shows workplace productivity and reduced absenteeism. Employee who are spiritually committed and remains influenced due to moral commitments show fearless attitude and more ethical stances while following directions for future growth. Most significantly, the organisational efficiency is the emerging concept within research and spiritual decisions made for complying business ethics may result in bringing competitive advantage for the firms (Agbim, Ayatse, & Oriarewo, 2013). 

Ethical decision and misconduct that damages stakeholders, impact organisations reputation in terms of consumer confidence and investors. As their decision and perception begins taking the toll, overall value of the firm drops thereby exposing firms to consumer criticism and increased damages (Ferrell, Fraedrich, & Ferrell, 2014). Therefore, Fryer (2015) underpins ethics theory for contemporary workplaces to capture any arising complex phenomenon. The three-generation topology given by the author gives the starting point for exploring few rights that needs to be considered by today’s organisations. On the contrary, Ferrell, et al. (2014) believes that many organisations decisions are influenced by stakeholders and any consequent damages stemming out of ethical misconduct and economic disruptions are more difficult to overcome than overcoming any financial performance.  Moreover, stakeholders are negatively affected by corresponding shifts in perceptions of organisation’s reputation. The authors do not neglect negative publicity influences and reveals that to maintain confidence and trust of stakeholders, top level management are expected to behave ethically and in transparent manner, providing any deceptive information to stakeholders.  

Corporate governance and ethical behavior

In literature, personal spiritual leadership models are been discussed extensively by researchers as it forms a theoretical basis that shows leaders with the path towards spiritual and moral deepening and practical implementation in both personal as well as in organisational context. However, personal spiritual leadership focuses majorly on inner life rather than combining creation of hope and trust to gain others commitment (Fry & Egel, 2015). Hence, more practical approach to business ethics needs to be applied especially in organisational context. Since contemporary organisations have to face various forms of ethical dilemmas each day, they need to focus more upon corporate governance and strategic performance measurements to maximise triple bottom line. Modern workplaces give more stress to enhanced business models like planning compensation for goal achievement, accountability and transparency, enhancing shareholders relations, risk management and ethical programs that validates their consideration for employee well-being and corporate responsibility (Ferrell, Fraedrich, & Ferrell, 2014). 

The above essay indicates that modern businesses requires more practical approach for managing ethical dilemmas and misconduct pertaining to everyday business activities. Though, current literature emphasises on spiritual commitments and moral consideration to influence decision, directions and implicit assumptions, it can also be noted that practical understanding of professional ethics is also significant. Business ethics are nothing but implementation of ethics in professional practice that proves businesses can be ethical and still become profit earning. Thus, more and more organisations show interest in application of ethical practices while carrying business dealing and motivating workforce. This paper concludes on agreeing upon practical and professional approach for maintaining ethics in businesses. Spiritual and religious approach can be considered somehow, but ethical codes and code of conduct seems to be more practical solution that can help organisations in aligning their business activities equally within each organisational level thereby giving moral support to employees for performing ethically.   

References

Singh, K. T., & Singh, M. S. (2013). Ethics in Corporate Social Responsibility. Journal of Business and Management, 09(02), 16-21.

Adda, G., Azigwe, J. B., & Awuni, A. R. (2016). Business Ethics and Corporate Social Responsibility For Business Success And Growth. European Journal of Business and Innovation Research, 04(06), 26-42.

Agbim, K. C., Ayatse, F. A., & Oriarewo, G. O. (2013). Spirituality, Ethical Behaviour and Ethical Business: The Impact of Relatedness. Journal of Business Management & Social Sciences Research, 76-86.

Amakobe, D. F. (2016). Business Ethics. Retrieved from https://www.researchgate.net/publication/308926602_Business_Ethics

Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2014). Business Ethics (10th ed.). US: Stamford, CT : Cengage Learning.

Fry, L. W., & Egel, E. (2015). What Is Spiritual Leadership? Retrieved from https://iispiritualleadership.com/spiritual-leadership/

Fryer, M. (2015). Ethics Theory and Business Practice. Great Britain: SAGE Publications Ltd.

Jr, F. H., Gabreil, M. L., & Vanquez, D. A. (2018). Triple bottom line and sustainable performance measurement in industrial companies. Revista de Gestão, 25(04), 413-425.

Pless, N. M., & Maak, T. (2011). Responsible Leadership: Pathways to the Future. Journal of Business Ethics, 98(01), 3-13.