Ethical Expectations and Public Values


Ethical expectations are a vital part of the business environment. The public expects business to be ethical and wants corporate managers to apply ethical principles—in other words, guidelines about what is right and wrong, fair and unfair, and morally correct—when they make business decisions.

In the global arena, ethical standards—and even what is meant by ethics—can vary from one society to another. In spite of differences in ethical meanings, cultural variation does not automatically rule out common ethical agreement being reached among people of different societies.

Human rights issues have become more prominent and important for business. For many years that pressure was exerted on South Africa’s political leaders to halt racially discriminatory practices of apartheid and its business leaders to challenge the South African government’s enforcement of the policy.

The question is not, ‘Should business be ethical?’ nor is it, ‘Should business be economically different?’ Society wants business to be both at the same time. Ethical behavior is a key aspect of corporate social performance. To maintain public support and credibility—that is, business legitimacy—businesses must find ways to balance and integrate these two social demands: high economic performance and high ethical standards. When a company and its employees act ethically in dealings with other stakeholders, they are improving the organization’s contribution as a social actor. When they fail to act ethically, there is the risk of losing the public support an organization needs to be credible and successful.

Business leaders are faced with the continuing challenge of meeting public expectations that are, themselves, always changing. Yesterday’s acceptable behavior may not be tolerated today. Many forms of harassment and discrimination were once common. Today, however, social standards make such actions unacceptable. Public expectations of service and ethical behavior are as relevant to a business as customer expectations regarding products such as automobiles and computers.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

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The Blue-sky Laws


Government regulation and intervention is very pervasive in our daily lives, especially in business activities. That intervention is both supportive and restrictive. Also, it is constantly changing. The intent of government is generally to provide justice, orderliness, and fairness. A realistic observer may also perceive a governmental desire to play Robin Hood. Some entrepreneurs will find themselves the objects of Robin’s beneficence. Most owner-managers see too much of his ever-present Merry Men.

Entrepreneurs usually don’t concern themselves much with the creation and enforcement of government regulations. Being realistic, they just want to know the rules. They ask how it works and then go on about the business of building their enterprise. Because entrepreneurs need all the help they can get, they will use the rules and regulations that can in any way help the business. If the rules are not helpful they will avoid getting into a position where the rules interfere with the progress of the business. The problem for entrepreneurs is that the regulatory bureaucracy is so massive and complex that they have trouble understanding the rules.

The specialists who devote their professional lives to understanding rules and providing guidance to the rest of us must concentrate on a small segment of the rules to be able to keep up with the changes and the latest nuances in interpretation. This results in the need for many specialists. Despite the burden on time and financial resources, however, it is most prudent to obtain sufficient advice and guidance at least to avoid the wrath and interference of the regulators.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Knowing about Cartel


A cartel is a group of firms combining to restrict output and raise price, the aim being to balance as a collective monopoly. Each firm in a cartel agrees to produce less than it would under unrestrained competition, in order to drive the price up so that all in the group will benefit.

Cartels can only raise prices by cutting firm outputs. But at the higher prices, member firms are motivated to produce even more than at competitive equilibrium. So the more successful the cartel, the greater the incentive to chisel. Carters therefore require enforcement devices to prevent chiseling. In a number of European countries, the law may treat a cartel agreement as a legality enforceable contract. Some jurisdictions take a neutral position: the cartel agreement is not unlawful, but the power of the state will not enforce it. Finally, the law may be actively hostile to cartels as “consipiracies in restraint of trade.” In such a situation a cartel would require enforcement devices that are both effective and secret—an unlikely combination when any detected chiseler can complain to the authorities.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight