Business ethics

Business ethics
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Business ethics or corporate ethics is a form of moral ethics that examines the
conduct of people and individuals in a business set up (Weiss, 2014). These norms are the
key guidelines to the way things are done in individual and communal businesses, and it
helps in improving the relationship of the business with its stakeholders. The core
purpose of any company is to maximize shareholder returns, and this is only made
possible by having the business impress its customers effectively and treat them fairly
such that the net sales remain at a high level (Ferrell & Fraedrich, 2015). It is common to
find various ethical issues arising in a business, situations where the management has to
decide on the suitability or morality of actions that will be taken in the business. During
such ethical dilemmas, the officials are expected to make the best decision that is aimed
at winning the affection of the customers (Weiss, 2014). Taking the example of ford, the
car producing company that was faced with an ethical dilemma due to the production of
defective products, the decision made in such a scenario, if proper business ethics are
adhered to, could make the company maintain its high clientele, of which the opposite
also applies.
Case analysis
One of the known business ethics cases of the international companies is the ford
pinto case, in which ford’s design of the Pinto’s fuel tank is defective, in a way that it
makes the Pinto to be highly susceptible to fire accident. Rear-end collisions for the
Pinto, whether minor or major leads to ultimate accidents, making it very unsafe for the
Pinto users. The moral action for Ford in this case is to repair the design to make it
suitable for every vehicle, but apparently this would be very expensive as it would cause
the company over $137 million. If the company chose to turn a blind eye on the case, the cost of
paying for the resulting damages including insurance due to deaths caused would not exceed
$47.5 million.
The who-how framework for business ethics in dealing with the case
Under the Who-How framework of business ethics, the person in which the ethical action
is performed for or against is first evaluated and the protocols are then evaluated (Hoffman et al.,
2014). That is the Who and the How respectively. In this case, it is evident that Ford chose an
unethical decision, taking down lives and health of people for the sake of their profit
maximization. The who in this case is the customers affected by the defect and the how is the
means in which the business reasons out either compensating or doing away with these
customers (Weiss, 2014). The principle of utilitarianism, where the decision is made basing on
the idea that brings about the common good for the larger percentage of the individuals is also
used in this approach. If ford decides to take the more expensive option and make the necessary
changes, they would save the health and the lives of millions of their users. If they would decide
to take the second option, which is paying for upcoming damages and save the cost of the
manufacture changes, they benefit is felt by only a small fraction of the stakeholders, the owners
of the company. In the long-run, however, these beneficiaries would be losers since all the
affected customers would be lost and the reputation of the company lost for a long time. The best
ethical decision for ford is therefore to accept the mistake very fast, spend a lot of cash in
correcting it and it would do them good in future.
Ferrell, O. C., & Fraedrich, J. (2015). Business ethics: Ethical decision making & cases. Nelson
Hoffman, W. M., Frederick, R. E., & Schwartz, M. S. (Eds.). (2014). Business ethics: Readings
and cases in corporate morality. John Wiley & Sons.
Weiss, J. W. (2014). Business ethics: A stakeholder and issues management approach. Berrett-
Koehler Publishers.

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