Good governance and understanding of business ethics promotes trust in the senior executives and lead to growth of business. These are contributing factors to strategic planning and improve on skills to attract and retain good business relations. Ethical business practices serve to attract potential customers and prevent losses that may come as a result of legal settlement in a court of law. It also protects a business from incurring losses and other expenses in compensations and other liability issues. (Clarence and Ronald 1998).
There are important elements that support business and this is in terms of qualified personnel and ethical leadership being practiced at the place of work. This is coupled by ethical decision-making skills that link the business world to the society that is being served. Employees are an institutions greatest asset and their concerns and needs should be looked into. Employers and employees should therefore understand the need for their commitment and put all efforts that helps accomplish their personal and business goals and those of the society at large.
The parties should uphold high standard practices that comply with the laws and regulations that are set on each business set-up. A professional code of ethics is laid down and acts as a guideline to proper conduct, discipline and the responsibilities that go with the profession. The conduct of business operators and the stakeholders is within a certain limit. In this they can execute their duties without causing any disruptions to the workers and the community as a whole.
Various operations in a company may lead to enforcement of law and sometimes may have criminal penalties on those that break the law. There are federal and state laws that have major concerns on safety, criminal violation and the status of a companys business as a public company. It is of ethical concern that companies should provide a conducive environment for workers as well as safety measures put in place.
Good business practices is a result of combined efforts of professional values and ethics that help to judge and solve issues in an ethical manner with an interest of the society at heart and in respect to the profession. The success of a business does depend on the aims and objectives of the entrepreneur but further more, it is of great importance that the practices involved are justifiable on an ethical ground. (Clarence and Ronald 1998).
A product for example, captures great concern especially due to the processes involved as well as the final product that reaches the market. In production, ethics is an individual responsibility of those that prepare process and produce the products. The materials used, their acquisition and use in the manufacture count a lot. The materials should be genuinely sought and acquired through proper transactions. Their quality should be defined and their content should be known. All this is in an effort to produce the very best of the product that reaches the consumer in the market.
It is important to mention that the standards of quality are necessary in terms of safety and accuracy of content and other specification. Quality control is an important element in producing high standard of quality, design and manufacture of the product.. The ethical issues that encompass a product need to be considered with a lot of keenness since liability suits or prison terms may arise due to losses or injuries incurred on the consumers.
This may cause a major crisis that a companys reputation and public image may be severely affected. It is therefore the duty of every person concerned to carry out their duties and responsibility that ensures quality standard products. Any defects should be checked through conducting spot checks from the production units and this prevents cases of damage, spilling and contamination that may cause harm to the consumers.
Quality assurance needs careful attention so that safety measures, material and quality specifications are realized in the production process. It is the moral responsibility of a company to prevent injury by providing products that are not defective. Products can be rated according to the quality, content, package, value and the ethical practices involved in production. A product, which is well designed, has good features and good value for the price attracts many customers to buy and use the product. This leads to customer satisfaction and ultimately, customer loyalty. Such a product is bound to do well as long as quality, value and ethical concerns are maintained and much better if the product is improved from time to time. (Jacques, 2002)
Ethics in products and production processes examine the principles that are used to result to the final product that goes into the market. It also looks into analyzing and solving ethical problems that may come about in a business environment. Issues about content, use and details on side effects are given attention. This has been as a result of the increased awareness and demand for ethical products and processes which has led to increased pressures on industries to produce quality and acceptable products.
As a result, product codes of ethics have been given more emphasis. It is now the social responsibility of a company and its employees to participate fully in producing the best product which poses little of no danger to the customers. If there are any warnings on consumption of such a product, ample details should be given as side effects, contraindications or any other possible effects associated.
There are products that may cause harm and are dangerous when consumed. Tobacco and alcohol may be addictive and be a dangerous product that can lead to diseases such as cancer, ulcers, respiratory disorders and many more. This ultimately deteriorates the health condition of the individual and risks the normal functioning of body systems.
On the other hand production of weapons such as bombs, guns and other missiles are also seen to be dangerous to the life and the environment. Any kind of weapon that risks life and existence has raised ethical concerns. It is said that man is producing substances that are bound to cause harm to himself as well as to his environment. Environmental concerns are also addressed in production. There include cases of pollution through carbon emissions, noise and waste disposal. These are potential threats to the environmental flora and fauna.
With increased technological advancement came major ethical problems as is seen in genetically modified foods. GMOs have not been embraced well in a vast majority of religious groups and some countries. They have protested against the incorporation of human and other animal genes into plans as being unethical and unacceptable to them. It has since been seen as a violation and abuse of natural existence of most plants through such scientific discoveries.
Mobile phones have also been used to serve almost every other purpose of communication and have interfered with human interaction and relations. The use of mobile phones has been relied on and the bond that exists between persons has been compromised. This has also been seen in the use of computers and other communication channels that have reduced closeness and face to face relations of people. Use of laboratory animals to test for drug efficacy and administration has been criticized due to the animal rights violation and disturbance. Furthermore, use of target groups as sample assays for experiments such as drug resistance, disease symptoms, responses and management is unethical. Ethical principles demand that no harm, pain or injury should be subjected to such innocent animals that humans have used as experimental objects.
When a product has been found to have any irregularities and causing harm there may be product liability claims by the plaintiff. This may be due to negligence that causes defect in design, manufacturing and lack of details that warn against use of the product. When a problem is anticipated during the process of production, it is necessary to correct the product before it reaches the consumer.
Under strict liability, the liability is held on the manufacturer and the consumer recovers through compensation due to any injury occasioned to him or her. There are factors that are use to justify one to claiming negligence. It is fundamental that one is able to proof that a duty of care was owed to him or her, or a breach of that duty has occurred and as a result injury has been occasioned on him or her. (Clarence and Ronald 1998)
Making a decision on the basis of ethics is however a critical issue because of the complexity of the issues that presents themselves at the workplace and in the market. This is to mean that it is not always easy to solve and make decision on issues that need ethical consideration. At some point, conscience may not be a guiding factor to decision making since thorough, critical and creative analysis of the situation is the determining factor. (Abraham, 2004)
This was illustrated in the Johnson & Johnson Tylenol case in which ethical reasoning can be examined and analyzed. In this case, there was cyanide intoxication in extra strength Tylenol capsules that resulted in the death of three people in Chicago. When the authorities were alerted they were able to take action. During this time the number rose to seven and this was a cause of alarm to the existence and fame of the brand which was a leading pain reliever. (Howard & Smith 2004)
There were issues that the executives were not informed about since it was not clear if the cyanide was put during the manufacturing process or later. There was no reliable source to find out if the deaths were the first to be reported and whether they were limited to the Chicago area. The U.S Food and Drug Administration warned against consumption of the drug while the government gave no specific action. In this case, they thought that local deaths were reported and perhaps not more than seven would die. They considered a temporary stop in sales which would prevent further harm.
The executives of the Johnson & Johnson estimated a recall loss of up to $100 million, which was not covered by insurance. The recall would also mean that Tylenol would never regain its public confidence as well as its 37 percent market share. The news that were heard in the media houses also would lead to a drop in the companys stock as well as competitors being opportunistic in the Tylenols loss. The fact that the company was not willing to expose the consumers to further risk; Johnson & Johnson had to make a decision and ordered a recall of all Tylenol bottles. (Howard & Smith 2004) (Clarence and Ronald 1998).
During this first crisis, the company offered to exchange tablets at no extra cost to all its customers. The brand value deteriorated but the quick action as well as sincere efforts of giving consumer safety by recalling 31 million bottles was a good gesture The company did not rely on the speculations and rumors going round and for this reason they opted to make a decision that was worthwhile. Through this the company enjoyed protection from public warfare and it enjoyed good reputation through the ethical decision arrived at.
.Ethical issues present themselves differently and therefore require a coherent approach of existing situation and the alternatives available should be directed towards the good of the consumers and the society. Tylenol went back to its normal position after six months.
The challenge was far from over and the company later faced a major challenge due to deaths which resulted to an overdose of the drug and its side effects. Bad publicity and huge losses were incurred following all the legal settlements that came due to legal suits. This made the company to make changes in Tylenols label so that they would include all the side effects in it.
In the second crisis, deaths were reported and severe liver damages were linked to over dosage of Tylenol. The content was to be highlighted in the J& Js label and explicitly warning consumers of its side effects. The condition was made harsh by the acetaminophen poisoning which found the company with more than 100 suits in a period of 7 years. In an effort to reduce the damage the public was made aware of the risk involved as well as prescription details for different age groups. Information about side effects on children would be included in the labels, which also warned against overdose of the drug. (Grace, 2003) (Howard & Smith 2004)
It is therefore evident that in managerial practice, ethical aspects, corporate and individual decision making skills are needed in situations that arise in the workplace.
The Tylenol related statistics have been so devastating losses as it still tries to solve the court suits against them but a media wall that does not reveal its huge losses concealed them. The silence about the adverse side effects by the company has led to increased sale of hazardous drugs and more lethal drugs. It is the social responsibility of the company to give every detail about all the possible side effects and giving details about their consumption.
The consumer should be protected because such laxity has been clear evidence that the success of the industry may not be associated to a life saving oriented company but one, which performs corrupt business deals. Outlining the lethal risk is a right of the consumer so that they are guided, warned or instructed on how to use the product. Such information should therefore be revealed to potential consumers regularly. (Jacques, 2002)
Ethical issues should also serve beyond individual interest of owners, stakeholders, employers and customers. Stakeholders are said to have even rights of governance but others have democratic associations that allow for participation of the employees and other stakeholders in the companys operations.
It is however important to realize that ethical issues may differ for companies that operate in different countries. If a company exists in two countries for example, there can be differences in the laws of its home country and that in which it is operating. Some laws are not enforceable in some countries while others may show laxity in enforcing the law.. However, a challenge exists since a company could be in a country with less strict laws or one, which does not forbid some practices. Ethical concerns are therefore found to be irrelevant in such cases because the company is operating in a foreign land. They should abide to the law and respect the rule of that country since they are foreign investors and need to comply with the law.
For example, United States law does not allow companies to pay bribes but in other worlds, bribery is customary. When an investor moves to another country they are bound by the law of that country as no alterations can be made to suit their need to ethical practicability. Such contradictions are difficult ethical issues to analyze, as is the case of child labor which has attracted the attention of great scholars.
It is however noted that in very poor countries and those developing countries they strain to make a living and children are subjected to such labor for lack of resources. Working hours and environmental protection laws are ethical issues that can not be standard in all countries. For example, there are working nations that opt to work for twenty four hours so as to maximize of profits. In the same way industries have to carryout production all year round despite the fact that pollution is taking place. Decision making on business and its operations requires skilled assessment and calculations that are achievable.
Different companies have internal policies that govern the ethical conduct of employees. The statement can be general, broad or may have specifications on behavioral requirements. These are characteristic of a company and provide a guideline on solving common ethical problems and enhancing awareness and application of the ethical policies.
Cooperate governance is a guideline that shows the commitment to monitor policy issues and be involved in decision-making. This will subsequently enhance long-term value of the shareholders and the society. Environmental concerns are of ethical consideration since pollution of water, air and noise pollution are not acceptable in the environment. Waste disposal is also a big challenge.
The ethical issue at hand is at some point difficult to analyze because the business managers and CEOs may not spend their time worrying about environmental pollution since its beyond their control. It becomes more difficult because there is no accurate measure of what extent is pollution especially with carbon emissions and other gases. Waste products have to be disposed but the mere reason that they cannot be put into a store, makes it ethically impractible to avoid dumping them in the environment.
Issues on a product that is needed in the market may raise ethical concerns. One of these would be production of contraception drugs. According to some beliefs and traditions, it is against the code of ethics to produce and use of contraceptives. On the hand the needs of the consumers of the drug count it as a benefit to them as compared to unplanned conception for those who do not use the drug. (Jacques, 2002)
Content of a product may also bring a point of concern. This is especially due to the different ethical backgrounds of different traditions in a country and religious perspective. Tea and other stimulants contain caffeine, which many religious groups detest. A product like sausages may be controversial on religious backgrounds and may actually need coherent ethical decision making before commencing on its production.
Setting up a business for such a venture needs a critical analysis of the target groups as well as the religious background of the people. Other additives that are put in products need to be carefully analyzed and their side effects known. Products such as skin oils need dermatological testing so that they do not cause undesired effects such as bleaching, skin toning, marks or more adversely cause skin cancer. (Ronald, 2004)
Product ethics also require that certain territories are observed while selling or using a product. Smoking or consumption of alcohol near a religious building should be discouraged. At the same time products such as beers should not be sold to young persons or those who are expectant. Warnings which include health risks associated with its consumption should be clearly indicated. A product that causes harm to the consumers should be withdrawn from the market immediately. The company should seek to compensate those affected and try to rebuild on their public image once again. (Grace, 2003), (Clarence and Ronald 1998)
Companies need to have their employees attending seminars, which teach on business conduct, company policies and other studies that help them understand on legal requirements. It is therefore a duty of the employer to ensure continued training and development of their employees. Unethical conduct of employees may arise from those who do not support the corporate policies but rather claim that they require their own judgment to deal with the issue. (Jacques, 2002)
In production, packaging concerns are given priority heat resistant packaging and tamper resistant devices due to existing tampering scares. It is also vital to guard against pilfering, tampering during the actual manufacture, contamination, counterfeiting using technology and use of unique labels. Current issues such as advertising have raised some ethical concerns. This is because of the extent of advertisement, display and practical exposure on some products especially on a television screen.
It has been too explicit and causes consumption or purchase of items, which are not needed by children. This has largely contributed to the downfall of societal ethics and conduct due to elaborate advertisements. They have potential impacts on children who watch these advertisements. One of the major challenges is to confront the ethical issue as it presents itself, deciding on the right thing to do and the uncertainty of the action taken.
Being ethical while conducting businesses as well as vigorously being involved in business profits are not target goals in business setups. Other business goals and strategies should be adopted so that maximum profits can be made.
Product management can be viewed in terms of price, place, type of product and promotions. A product needs to reach a majority in the market by offering good prices, quality, size, color, shape as well as carrying out promotion activities to areas where the product has not penetrated. (Abraham, 2004)
Packaging should be appropriate and attractively done according to the type of product. Due to environmental ethics, the material used for packaging should be recyclable or should be environmentally healthy. Proper instructions about the disposal of the package material should be well indicated. Proper packaging prevents leakage, breakage and protects from any form of contamination.
Human rights, scientific research and ethics need to be understood in a manner that distinguishes the violation or advancement and hence needs to be approached well while making decisions. (Ronald, 2004)
Though major emphasis is placed on moral, social justice issues and at times democracy, the ethical principles require good decision making skills that still promote and protect other rights and policies set. Those products that are used or consumed by human beings and animal require to be properly manufactured with maximum quality and content.
Incase of any side effects the consumers should be made aware as well as any contraindications included. The therapeutic drug index should be used to check the minimum and maximum drug dosage so that they can come up with a proper quantity that is effective. Chemical manufacturing also calls for safety of workers and more importantly protection equipments available to them. (Graema and Newman 2005)
In Bhopal disaster in India, 3000 people perished with 15000 claims of dead persons in the first month. A pesticide plant had released 40 tones of MIC (methyl isocyanides) gas killing approximately 3,800 people and is seen as worlds worst disaster in the industries
Other effects are still felt and this includes cancer, blindness and other difficulties and related health problems. The plant was in densely populated areas and after the tragedy the demand had fallen, losses had been incurred and affected its workers. The company had ignored different danger signs with their alarms not in working order for four years. The company however responded well and helped those who were affected by sending medical experts to save the victims. (Grace, 2003)
The company followed the legal proceedings to settle suits against them.
There were changes in the corporate identity and there was a merger of union carbide and Dow chemical company. Their major concern was to have a clean up exercise for all the waste contamination in the company environs. It was ethical to have concerns on the victims, the environment and also attend case hearings as agreed.
Ethical concerns on abbestos were also looked in to due to cancer caused on lungs, kidney and larynx. Different countries banned its supply in to their countries and this included Canada, France, and the UK controlled handling due to the link of exposure and resultant death. Those that understand the danger of such a product should be keen to keep their distance, protect themselves and their children so that they are safe.
Since prevention is better than cure, individuals working in such companies need to take care of the children and colleagues who are exposed to the dangers. Ethical planning and considerations should be made to make sure that such accidents do not take place in the future. Enough precaution, safety equipment and escape routes should be provided so that incase of such a disaster, those who run can save their lives.
If a policy is set, then a company may have concern for victims, product redress and other modifications and aims at providing products without further defect.
The ethical issues surrounding Tylenol case is seen by the extensive losses incurred in recalling the product and also compensation and legal proceeding. The important factor here is the consumer who should have quality products at all times.
It is an individual and corporate effort to maintain the ethical standards in products and services. The ethnics officer and the management should adhere to quality and other specifications.
In practice, good working conditions, employment terms, safety equipment and social needs of the employees need to be provided. It is also necessary to ensure good and friendly supervision. This can be demonstrated through quality leadership styles to all employees.
Business ethics and governance are fundamental aspects that control the business practices. They need to be enforced and adopted so that quality of products ensures customer satisfaction.
It is important to analyze the existing situation and exercise decision-making options to best suit the consumers, society or the other parties involved.
Expert judgment may also be needed and in such a case an ethics officer may be used. Customer loyalty is built on the confidence of the product, the quality produced and the proper content used to make the final product. (Abraham, 2004)
The management and its employees can practice corporate governance through their individual commitment to safeguarding the companys image and corporate behavior. (Ronald, 2004)
Proper guidelines on making a decision should be laid down so that as problems arise, they are solved and amicably improved.
Research efforts have been conducted and they all aim to distinguish companies with quality care and products adequate information. Further research on side effects is shown in their labels as this may compromise the health status of an individual. Through research on possible health conditions of those that consume the product, analysis about their administration and instruction are shown appropriately and according to age and gender.( Jacques, 2002)
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Clarence C. W, Ronald F.D., (1998). Education, Leadership, and Business Ethics: Essays on the Work of Clarence: Springer Publishers
Grace, B. (2003). Unequal Health: How Inequality Contributes To Health Or Illness. Rowman & Little Field Publishers.
Smith M. S. & Howard, A., (2004). Rivers of blood: serial killers and their victims. Universal Publications
Jacques, C. (2002). Activist Business Ethics: Springer Publishers.
Ronald, D.S.,(2004) Strategic Planning For Public Relations. Routledge Publishers