Role of Ethics in Business Essay

The issue of ethics has always been present in the field of business. At times, business ethics are considered as a justified approach by many who believe in ethics; however, at the same time many who do not agree differ with strong arguments. With regard to the problem under discussion I would like to put forward few of my arguments in favor of copy rights. Hence would like to adopt anti-piracy approach and will certainly support observance of strong ethics in business. Ethics means the ability of a person to follow the right conscience during difficult times, whatever the situation may demand. He should not give in to the unethical practices to gain short term goals and profits. Business ethics also called corporate ethics is a form of applied ethics or professional ethics that examine ethical principles and 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 organization. Before, setting the stage for my arguments, the most important argument which I would like to quote are many of Hadiths of the Holy Prophet (PBUH) in which he has stressed at many occasions on business ethics. His sayings, wherein he has been stressing Muslims to keep promises and not to sell the products on wrongful swearing and twisting of facts. His stress on the character building and his own personality which was an embodiment of fairness and truthfulness has been the biggest asset which created immense goodwill and reputation: when he was hired by Hazrat Khadija to look after her business before both got married. As a person and as a businessman he was recognized as Sadiq and Amin. Therefore, the point of emphasis is that in our religion and culture, strict observance to business ethos is not a new phenomenon. Supporting Arguments: Observance of Ethics in Business

A critical analysis would reveal that existing piracy tactics have natural and historical background. However, topmost reasons are: the non-affordability of the public to purchase expensive software, particularly in third world countries and lack of research in most of the world regions. However, nothing can be quoted to justify the unethical acts of piracy.

Ethical Argument Against Software Piracy. There have been circumstances when supporters of piracy have been advocating, promoting and supporting the piracy on the grounds that they are providing cheaper material then original price of the original owner to the customers. They may even seem a little noble for doing so, after all, they are protecting the consumer right. This case is actually a very weak argument to advocate piracy as ethical. Even though on the surface it may seem that the pirate is doing the right thing, they are really concerned about the price wouldn’t it be more prudent to contact the original owner?

Of course, they will not because the company prices products according to what they believe they can sell them for, if they don’t sell, then obviously they are overpriced, so why should the pirate be ethically correct in adjusting the price to what they believe it should be? If pirating and selling illegal copies of software at lower prices is acceptable , then what prevents other people from stealing cars and following the same logic? Furthermore, one would expect these good doers to pay the profits of the sales back to the publishers, which is most likely not to happen. Most companies now a days offer demos of their commercial products, some like WinZip extending to 45 days. If you copy a software product and you like it, then the developers who have spent thousands of hours working on it deserve to be compensated for their efforts, (Biron, Jeff. The Ethics of Piracy).

Expenditure of Multi-National Companies on R& D. Every year the reputed companies like Microsoft, Google and Apple spend millions of Dollars in this field. Highly advance materials and programs are developed to market. Such things if seen dispassionately do not come free of cost. First, these companies have to employ a huge force of program developers, researchers, technicians and designers and they pay them. Second, these companies work under existing laws of the land hence are supposed to pay huge sums of taxes on annual basis and are even required to get their products patent or enlisted/ registered. After doing so much of intellectual, physical and financial labour these companies fix price of finalized product before marketing/ introducing. So will it look them justified that a product which they have produced after expending millions of dollars and months of hard work should be pirated by a second or third party/ country for the sake of few dollars?

Creation of Corporate Goodwill – Reputed Stature. Apart from achieving corporate goals, a business has certain responsibilities towards the society, stake holders, employees etc. By running the business in an ethical manner, we not only earn good reputation in the global corporate arena but also create a positive and amiable working environment among investors and employees. So to maintain a long term relationship, we shouldn’t resort to unethical practices. For the time being if it is considered right, a neutral analysis reports that the piracy business runs in billions and this all goes as a loss to the original owners/ organizations. Think for a while due to so many piracy ventures, many companies and private owners are earning billions.

Again if we take the example of Microsoft, imagine if the same amount is earned originally by Microsoft, it will be spent on eradication of many diseases, poverty alleviation, and promotion of literacy through Bill Gates Foundation. At the other hand one must think what Chinese and private pirates of India are giving to humanity? If we talk of Pakistan, example of Super Asia Manufacturing Company can be easily sited. Lot of their products have been copied, certainly unregistered and third rated, with somewhat homophonic or similar names. Due to this Super Asia is suffering in lacks of rupees. What those pirates are giving to the society, third rated stuff on the plea of cheaper products; while Super Asia would have spent much more then what they are spending presently for eradication of Hepatitis C in Pakistan. (My personal interaction with CEO of Super Asia during our study tour in 2011, students ex Staff Course 2009, Command and Staff College Quetta).

Responsibilities of Original Manufactures / Owners. Likewise, all those multinational companies whose stuff is being pirated are also not absolved from few of fundamental responsibilities to inherently observe business ethics in their companies. And the principal factor to my mind is the internal ethical environment of the organization. Let’s take the example of suppliers to a particular manufacturer/ developer: A business cannot claim to be ethical firm if it ignores unethical practices by its suppliers, e.g. a.Use of child labour and forced labour.

b.Production in sweatshops.
c.Violation of the basic rights of workers, or inhumane working environment. d.Ignoring health, safety and environmental standards.

An ethical business has to be concerned with the behavior of all business that operates in the supply chain and should comprehensively address behavior of each one of them. Few of those to whom I consider responsible to be held accountable are:- a.Suppliers.

d.Sales Agents.
e.To an extent customers are also responsible for abetting the pirates/ piracy, may be directly or indirectly, by purchasing and promoting pirated products.

Following Ethics in Business is Not a Loss in the Long Run. However, it must be kept in mind, though apparently following business ethics may look difficult but there are visible and concrete gains having followed the tough road to ethical business strategy. Being good is good business (Dame Anita Roddick, 1942-2007). Few of those gains which I consider to be an advantage are:- a.Higher revenues – demand form positive consumer support. b.Improved brand and business awareness and recognition.

c.Better employee motivation and recruitment – the employees of better intellect / professional acumen are attracted due to unique, noncontroversial and clean stature of the organization. d.New sources of finance – particularly form those investors who believe in and strongly stress on business ethics. (This point may look more pertinent to Europe and USA etc. since in our country, unfortunately, there is no such approach or a sound concept of consumer rights. Basing on which one should discriminate in a good or bad organization: who is following business ethics and who is not?). Certainly it can be easily concluded that following ethics makes a company distinct and more reputed then others. e.By following robust business ethics companies earn valuable goodwill, which reposes customers trust on such companies. By doing so such companies earn an iconic stature, Microsoft, Nestle, Nike, Nokia and many more such companies are a strong case in the point.

As of this stage in the discussion it can be summarized that by following business ethics, apparently for some pint of time organizations may suffer temporary revenue loses, however, sensible and responsible citizens round the world do differentiate between pirated stuff and original versions, and most of the time they do act responsibly by purchasing subject stuff.

People are Entitled to The Fruits of Their Labour. Perhaps the most powerful intuition supporting property rights is that people are entitled to the fruits of their labour. What a person produces with her own intelligence, efforts and perseverance ought to belong to her and to no one else. John Locke’s version of this labour justification for property derives property rights in the product of labour from prior property rights in one’s body. A person’s labour and its product are inseparable, and so ownership of one can be secured only by owning the other. Hence if a person is to own her body and thus its labour, she must also own what she joins her labour with—namely, the product of her labour. (John Lock, Second Treaties of Government, chap, 5)

Economic Argument Against Software Piracy. Software Piracy leads to decreased profits, and that leads to less money being invested in research and developing the product further. Developers also lose motivation to give it their best. What is worst that the pirates affect the accuracy of studies conducted by these companies to enhance the software, and that in turn harms the customer who buys the product legally, (Tech it Easy, The case against software piracy.) Rather the customer also faces higher prices as a result of decreasing sales and the need to gain the profits lost to piracy, (Biron, Jeff. The Ethics of Piracy).

A business that makes noting but money is a poor kind of business (Henry Ford). A joint study performed by the BSA and IDC (International Data Corporation) shows many interesting results about the impact of piracy on global market. A simple decrease of piracy by 10% over the next four years could introduce up to 2.4 Million new jobs. Logically, rampant piracy in a country would also mean less investors willing to set shop in that country and thus less technological experience and monetary profit. It is estimated that over the next four years, the amount of money spent on software related purchases will reach USD 300 billion. Over the same period of time, USD 200 billion would be lost to piracy, (Business Software Alliance, Third Annual BSA and IDC Global Software Piracy Study 2006.)

Summing Up. At the end would like to say that business ethics are being followed as a corporate culture, which is must rather than an option. Generally it is intrinsic; however, at times most of the companies are being compelled also to follow these norms, mainly due to the efforts of consumer rights groups and prevalent globalization which is spreading more and more awareness on the issue. However, there is a need to act responsibly at national and international level. Those organizations, who adopt the culture of ethics, add moral and positive business norms as part of their organization and individual culture are renowned, successful and benefited in the long run.