Business Corruption as a Major Ethical Issue

Table of Contents

Business Corruption as a Major Ethical Issue 3

Introduction_ 3

Discussion_ 3

Corruption: Ethics and Morality in Business 3

Business Corruption_ 4

Business Corruption and Business Ethics 5

1. a) Kohlberg’s theory of cognitive moral development 7
2. b) Consequentialism_ 7
3. c) Deontological ethical theory_ 8

Application of theories 9

Prevention Of Business corruption_ 12

Conclusion_ 12

References 14

 

Business Corruption as a Major Ethical Issue

Introduction

Business corruption is one of the worst scourges of our society, affecting both the public and private sectors, the effects are devastating: it can overthrow countries, distort markets, finance wars, limiting aid to development, erosion of democracy and human rights limit investment, encourage organized crime (Miller, 2010). Business corruption undermines the dignity of a person, group or nation, example of this is lies, deceit, bribery, etc. As we see the business corruption is not so far from our daily lives, it is something that we ourselves use to achieve our ends and goals even want to harm other people not caring. This is something that is growing and every passing day society is accepting business corruption as normal, why is it so difficult to detect a business corruption case and do something about it. Business corruption is inherent to civilization, but at this stage of globalization and digitization of the economy, rather than being able to find ways and mechanisms to nullify, business corruption has not stopped growing. But the reality is that despite these mechanisms, most of them volunteers, business corruption has not been eliminated (Miller, 2005). In this paper, we would try to develop a knowledge based framework to understand the motives and consequences of business business corruption through an ethical perspective. In analysing the ethics of business business corruption, this paper will focus on 3 different ethical theories; Kohlberg’s theory of cognitive moral development, Consequentialism and Deontological ethical theories. Each theory represents different standpoints and arguments in as to the motives behind business business corruption.

 

Discussion

Corruption: Ethics and Morality in Business

The concept of ethics and morality are subject to different uses depending on the author, time or philosophical. It is therefore necessary to identify the characteristics of both terms in order to establish relevant distinctions and similarities. Morality refers to all those rules of conduct which are imposed by society, are transmitted from generation to generation, they evolve over time and have strong differences with respect to the norms of another society and another historical era (Larmour, 2001). The ultimate objective of these moral rules is to guide the conduct of the members of that society.

 

Business Corruption

Business corruption  is “the abuse for personal gain of the delegated power.” (Langford, 1994) Abuse can be perpetrated by an individual decision makers in the public or private sector; initiated by such person or caused by a third party who wants to influence the decision making process. Business corruption is as old as the very emergence of society. The emergence of social classes entailed differences between them, the hierarchical organization of property, privileges, economic and political subjugation, the desire for power and the benefits to those who sported reported. As the first community where the work product is shared equally and peaceful coexistence among its members characterized disappears; begins to emerge surplus production, exchanged and concentrated on a few.   Business corruption has evolved as societies have evolved, it’s been the most rudimentary forms and unsophisticated to higher stages with dire consequences by undermining the economy of the country. Reading the classics teaches us that, in various forms, business corruption has always been a thriving business. Throughout history there have been outbursts of anger of victims of business corruption that have long suffered in silence consequences and one day decide to eradicate them. It has been the most frequent cause of revolutions (Lambsdorff, 2007).

The new element is that today, for various reasons, business corruption is less tolerated than in the past and at the same time, is widespread. One of those reasons is the ease with which people circulate, goods and capital. The globalization of the economy has created, moreover, huge enrichment opportunities, both legal and illegal. But modern economy requires guarantees in a legal framework, in order to restore the confidence needed for long-term investments, which has often been undermined by business corruption (Klitgaard, 2000).

The problem is that it is easier to recognize than to define business corruption. Even when he appears in the governmental structure, business corruption tends to be a private matter, for the simple reason that formal institutions are always excuses, valid or not, to justify their charges. The most serious form of business corruption is one that is institutionalized: the more corrupt obtained with smuggling, black market and intimidation can easily bribe the judges, police and other officials to facilitate their dirty business (Klitgaard, 1991). It’s a vicious circle, the larger the number of constraints, red tape and arbitrary rules that have to be met, the greater the temptation to bribe managers to streamline the effort.

 

Business Corruption and Business Ethics

Business corruption is an evil that afflicts everyone, it is neutral and does not discriminate country, social class, race or religion. But what is business corruption? According to its denotative definition of business corruption is “disturbing and disrupting the way of anything,” from the standpoint of the church is “Every form of taking or wrongfully retain the good of others, but does not contradict the provisions of civil law, deliberately retaining provided goods or objects lost, defraud in the course of trade, paying unfair wages, raise prices, tax fraud, shoddy work, etc (Hopkins, 2002).

Business corruption from the ethical point is nothing but the practice of skipping ethical rules generally accepted in society. Those rules that every human group adopts and establishes because it considers essential to stimulate collective action, to survive, to develop and civilize their coexistence (Heidenheimer, 2012). As business corruption can be considered deception, injustice, abuse of any kind. It is also considered business corruption scandal and social conditions that do not contribute to the common good.

Business corruption covers a wide range of offenses, from the embezzlement of public funds to the transgression of the police. It refers to both activities in the country and abroad, can be staged in the public or private sector, may involve bribery of public sector authorities, higher or lower rank, domestic or foreign, as may also involve bribery of private employees. You may also involving embezzlement, misappropriation of funds or other diversion of property by a public official or an employee of a private company (Crank, 2004). In addition to these crimes, the term encompasses business corruption nepotism and favoritism in terms of recruitment and promotion in the public sector.

Business corruption has been one of the major ethical issues facing the world in modern times and there has been a lot of debate in regards to the motives of the companies that participate in it. Some even argue that business corruption is not solely down to lack of honesty but more as a tool that is required to survive in the current market due to increased competition, market conditions etc. We can say then that Business business corruption has always existed since ancient times and has gone through all the Economic and Social Formations, their formulas are as old as politics itself, what is new is the sophistication and clever artifice of advances science and technology (Baker, 2005).

 

1. Kohlberg’s theory of cognitive moral development

One of the best known and cited theories of moral development of Lawrence Kohlberg. This author divides moral development into three levels. Each of these levels is divided into different stages (Anechiarico, 2008). The cognitive moral development theory divided into three levels: Pre-conventional, conventional and Post-conventional.

 

1. Consequentialism

Consequentialism or Utilitarianism is an ethical doctrine explicitly formulated in the late eighteenth century and since then has had many supporters, particularly in the English-speaking world. As its name suggests, its substance is to define the correctness of any action by its utility, that is, for the results or consequences resulting from it. Hence this doctrine is also known by the name of consequentialism (Abed, 2013).

Utilitarianism thus expresses a desire for freedom, is a form of liberalism. Economic liberalism and social liberalism: Indeed, in England, two streams, the influence of Bentham develops births. The need for freedom born in the late seventeenth and eighteenth century develops and is expressed more clearly in the nineteenth century (Abed, 2013). From this perspective, two streams are born: economic liberalism that will take care of capitalism in the twentieth century, and social liberalism to be made in the course of the nineteenth century, socialism and later communism.

 

1. Deontological ethical theory

Deontological ethical theories focus on the virtue of choices by different criteria other than the outcomes of the choices. Most deontologists argue that some choices are not justified by their outcomes and that no matter how noble the outcomes or effects of the choices are, some choices are morally wrong (Miller, 2010). Ethics morality defends the use of a priori rules. For these theories have an intuitive understanding of morality, rules and rights having a substantive character.

The ethics, therefore, focuses on the duties and obligations, usually by making a list of rules that must be met. Therefore, rights and standards are substantive, they have value in themselves and not as mere instruments. In recent years there have been developed trying a new ethical current from a set of human rights. Deontological Theory faces the extreme difficulty of the plot development from a very general principles to particular applications to a particular decision problem (Miller, 2005).  While utilitarianism evaluate rules in terms of its consequences, deontological theories focus on the behavior or actions of individuals. Therefore, the key to ethics is the inherent rightness or wrongness of human conduct.

Deontological theories thus formulated different primary precepts. From these basic precepts, more particular rules that apply to specific problems are deducted. The ethics evaluates the ethics of a particular action based on the adaptation of the behavior to a system of precepts or rules. The different sets of standards derived from other higher order, and that do not explicitly consider the principle of the calculation of utility, are therefore non-utilitarian (Larmour, 2001). Some authors such as Rawls himself, to classify significant ethical theories, distinguished only two groups: utilitarian and deontological theories.

 

Application of theories

Ethical theories, over time, have evolved substantially. They are important as a way of thinking, to raise an issue. We can distinguish basic theories as the deontological and utilitarian power. Also influential is the Kantian philosophy.The two most applicable deontological theories to business practice are the shareholder theory and the stakeholder theory. The theory is applicable to business business corruption (Langford, 1994). Most deontological theories like those of Immanuel Kant argue that morality of an action relies on its fidelity to a standard.

It was not a forum to talk about business corruption, which we all know is at the top. Everyday there is a new scandal revealing that not enough legal measures that governments are empeñad to achieve zero business corruption. Only managed to reduce business corruption if we take seriously the task of building ethics statewide and private enterprise cultures. The global economic crisis has revealed the fullness behind the economic meltdown caused by a handful of adventurers of lacking ethics and finances dominated by unbridled lust for power and money, was the failure of ethics in higher education schools in the world (Lambsdorff, 2007).

Being ethical is the priority today for individuals and businesses.Ethics aims at getting the right either to the company. This is a group of people united around a common good and the pursuit of economic, personal, and intellectual growth of the human, psychological and ethical capital and increase the capital and compliance officer of the company the benefit to the environment social surrounding (Klitgaard, 2000). The company looks at the firm as an economic engine to produce profits, but also should be regarded as a community of people who are looking for a comprehensive wellness and, most importantly, as an ethical community that makes socially responsible values.  The lack of ethics can have different results: a redistribution of wealth, elimination of incentives for the improvement of society, production, and all kinds of harmful effects on society, injuries, malnutrition, decreased available wealth , etc. Davis (1992) discusses the different types of risks and errors when making moral decisions. Adopting concepts from statistical, this author considers two types of errors possible when a decision is made:

• Type I: a truth is rejected as false.
• Type II: a lie is accepted as true (Klitgaard, 1991).

 

The moral style is defined by the degree to which one of the error types is accepted. This concept of moral style is transferable to marketing, forming two types of moral styles that are not equally acceptable, but on the contrary, one is preferable to the other from the point of view of ethics.

• Type I: No product launches and marketing activities are performed to be sure the correct understanding by the public, and does not produce harmful effects on people, society and the environment.
• Type II: marketing activities are performed and products are launched to the market, while not clearly demonstrated to be harmful to people or the ecosystem (Hopkins, 2002).

 

Many companies and organizations in general, now make decisions with moral style of type II according to this classification. It is therefore necessary for safety and quality of life, the change of style in decision making. A new mindset on how to decide which would prevent errors and damage while acting strategically anticipating problems, avoiding them. This reorientation of how to decide which spans the enterprise, its multiple functions, requires a new style in the ethical decision making style that we have previously defined as Type I.

For some, the problem is essentially moral, serious lack of awareness of the officials who serve the state that leads to harness the power in their own right or things that were entrusted to him, knowing the basic rules of political representation. For this sector the solution of the problem lies in the plane of the selection and control of officials and the moral education of the whole society can be an indispensable basis for the fight against this scourge (Heidenheimer, 2012).

Others are skeptical, pointing out that this perspective on society coexist various systems of rules, so that an act that violates some other suits; and argue that the cause is structural, as an organizational system in which an official decision has broad powers with great discretion and no transparency, leads to business corruption, which is one of the basic forms of power without control (Crank, 2004). These positions proposed solutions both in organizational terms and in communication, as in achieving the desired transparency plays a key role the new public space created by the mass media.

Ethics considers a moral community as an “institution” because it has a purpose and legitimate systems of values ​​that embody defined in the organizational culture through self-regulation. This self-regulation, embodied in the Code of Ethics, and enhances long-term viability of the institution, as it reduces the costs of internal and external coordination, promotes strong employee identification with the goals and values, and creates an environment of strong motivation (Baker, 2005).

Moreover, companies can enhance the proper management of the state through cooperation in projects that effectively contribute to improving the quality of life of the population. In a globalized and fragmented world at the same time, people need an effective state action to provide that security, infrastructure and basic services. Example Policy Actions Corporate responsibility is your cooperation in public sector projects that are regional or national interest, or the provision of advice from employees at public companies for resolving administrative, technical or social problems public administration (Anechiarico, 2008).

 

Prevention Of Business corruption

How do we prevent business corruption? Maybe it seems a difficult question with an answer and even unanswered, however, there is a solution. The best weapon against business corruption is education. To this we must prepare children, youth, everyday people to not grow up in an environment of ignorance regarding business corruption, since for these, corrupt, abuse their power and easily fooled (Abed, 2013). If you learn well you can vaccinate is business corruption of this evil. We must teach them to be shared the values ​​of honesty, solidarity, respect for truth, justice, kindness and charity

To prevent business corruption should make you live in an atmosphere of camaraderie and solidarity that only thus can address this problem background and find real solutions to the problems of business corruption that the world has suffered and will continue to suffer. To combat business corruption worldwide is important that all nations and countries of the world to unite and work together to fight business corruption, as each country alone can not fight it. For this it is important to avoid disputes, conflicts and problems that may be among them (Miller, 2010).

 

Conclusion

Business corruption as a social fact, can not be predicted, so it is impossible to arrive at a unique solution to disarticulate. It is necessary that all means are used, not only from the point of view of legal sanction (penalty), but with considerable strength and importance take a firm step regarding this issue from the institutional educational and family background. That is, you can not leave it to the third issue, it is necessary from the school and from the family achieve control of business corruption (Miller, 2005). Give clear to future generations of ethical and moral standards. Of good and evil, because it is necessary that we achieve unify an ethics and social morality, ie not all the same. Because this state of emptiness, where the only value is money, leads to decay, deterioration as human beings and have a well defined goal, that society as such is destroyed, creating a state of extreme individualism in slowly the whole society is heading (Abed, 2013).

Business business corruption will just end up hurting more people than it benefits and it will be considered unacceptable in most societies. When an ethical theory, for example, prescribes keeping promises, is because it considers it a duty imposed on the subject, regardless of the actual consequences. A classic utilitarian ask calculating the consequences of not meeting a specific promise, while the ethics proclaims that there is always a promise (Anechiarico, 2008). One solution that I see would be the most successful for effective posture change in society, is that which has to do with education not only at average levels but from an early age, ie from baseline , we must ensure that children are aware of the good and the bad, how to react to situations of business corruption because they are the future men of power and they are the ones who must make the decisions that they direct the course of our lives. The thing to remember is that our active role must be based on control of it to not leave the company, feeling dejected for not achieving our goal can only be achieved through a joint participation in the company.

 

References

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