For many years there were no laws or treaties supporting workers’ rights, health, safety or their environmental conditions. The idea of protecting labor rights began to attract more attention since the Middle Ages (Hernandez, 1985). The very first country to adopt the law on limitation of the child labor was England.
(Kamal & Deegan, 2013) after the rights on safety and health protection went into effect, countries such as France, the Netherlands, and Switzerland began to support and improve their labor rights too. They also stated, that in the 19th century, many labor movements tried to combat child labor, improve working conditions, limit working hours, and seek an equal treatment as well as the minimum wage. Unfortunately, in some places of the world, people still fight for their rights. In today’s world, countries such Bangladesh, China, Vietnam, Brazil, Indonesia are some of the worst labor offenders. Citizens of these countries are suffering the most because they try to make living by working for pennies in terrible conditions and risking their own health. Child labor may be seen as cheap and productive, but there are ethical issues involved (Todaro & James, 1992).
Ethical issues involved in each of the cases mentioned above, except the web data mining. It is a huge industry of collecting and analyzing personal data for different purposes with or without permission. Some individuals may be offended because their privacy is violated. Accordingly, to what has mentioned above, it is important to emphasize the fact that ethical issues still exist and people suffer from them. This paper will accentuate how can companies’ ethical behavior positively affect morals and economics of the global market.
In order to answer this question, a literature review will be used. Academic articles on ethical behavior and its positive influence will represent the literature. A given question is important to discuss and elaborate on a public as lack of business ethics is a problem, which is always seen as a terrible thing.
However, it is also important to fully embrace the perspective and notice the benefits of an ethical behavior of businesses. The paper will focus on the ethical problems currently existing in the world, factors that still make people consume products or services from the companies that have such ethical problems, and what is the positive side of the ethical behavior. A reader will be introduced to the present labor issues in Bangladesh and to the concerning problem of the current century of technology – our personal data security.
The second section of the paper, a theoretical framework will mainly focus on the general background of the two problems, what are the causes, and whether it can be considered as morally acceptable or not. In the third section, arguments for and against will be provided as well as some recommendations. The fourth section will cover information about the type of moral dilemma.
Lack of ethical behavior in a global market has become an increasing concern for institutions, economies, and societies especially. In order to be efficient, make profits, lower costs of production, attract more customers, and gain competitive advantage; businesses do not guarantee ethical behavior. Furthermore, they create opportunities and incentives for ethical lapses (Sethi, 1994). Illegal behavior includes different types financial fraud, corruption, bribery, conflict of interests, or price fixing, which all belong to the financial misconduct. Unfortunately, the list of ethical issues may continue, there are abuse, sexual harassment, discrimination, child labor, poor conditions of the workplace environment, low wages and a variety of other moral concerns.
In April 2017, a newscast from Delhi announced that the managerial court accused a woman of the offenses under five sections. Two of these sections are: cruelty to the juvenile and employing a child in hazardous employment. It was alleged that the woman has kept a child as a domestic help and made him work two shifts a day. Moreover, the lady was mistreating the child by beating him. However, a Delhi court has revoked an order framing charges against the woman and the reason for this was a lack of the valid proof to any of the offenses. Additionally, the problem of ethical rules was raised by Columbia University in November 2017.
They were concerned by the fact that brain implants are advancing and human confidentiality and free will can be violated. They stated that the government and various corporations are teaming up with hackers to manipulate and control people by destroying their individual privacy, identity, and autonomy. According to the facts motioned above, the lack of ethical behavior remains to be a problem. There are always two broad sides of the issue. The market advocates take one standpoint.
They believe that the free market helps society to “allocate scarce goods and necessary burdens” (Wempe & Frooman, 2016) (as cited by Elster 1992). The market moralists have an opposite point of view. Wempe and Frooman (2016) found two reasons for market moralists to take their position. First, numerous market decisions are not free and they result in the unjustifiable distribution of products and services. Second, if certain goods or social activities purchased and sold on the market, there is a high chance of their value to be corrupted or degraded. And what point of view to support decides the management of the business.
The management defines the ethical direction and creates the working culture (Gunthorpe, 1997). Also, Gunthorpe (1997) states that they may choose not to follow ethical standards because it can negatively affect the profitability of a corporation, which results in a lower return on the firm’s stock and leads to unsatisfied stakeholders. Sethi (1994) believes that businesses attempt to make as large as possible their private gains by internalizing every conceivable revenue and externalizing every conceivable cost. When businesses try to achieve it, they may consider an option of admitting unacceptable business practices. Firms may establish production plants or cooperate with factories of developing countries where the economy is not in the best condition. Where usage of child labor and low wages is a norm.
The collapse of Rana Plaza factory in Bangladesh is an example of the issue. The factory was supplying global brands and it was under the responsibility of the local owner who was accused in the murder of more than a thousand of workers. The collapse occurred because of the poor working conditions.
Employees have warned authorities of the building breakages several times, but no one took an action. Workers received low wages, worked in bad conditions, and were treated poorly. Companies understand that people living in such countries are needed any money and are willing to work for pennies, in order to support their families. Thus, firms benefit from the position of the poor people Miles (1993). Pursuing a goal of reducing production costs or any other expenses, businesses seek to attract more customers by lowering prices of their goods or services. Since consumers have a bargaining power of refusing to pay higher prices for identical or even the same products or services that they can buy at lower prices somewhere else Sethi (1994).
Under those circumstances, industrial and corporate businesses that support unacceptable business practices face penalties. According to Gunthorpe (1997), if corporations are caught engaging in illegal behavior, financial markets charge a one-day penalty of approximately 1.3% and a seven –day penalty is about 2.3%. Unfortunately, these dominant firms are not able to always control ethical lapses of dishonest firms Sethi (1994).
(Peterson & Seligman, 2004) state that the word morality is brought from the Latin moralitas, which means proper behavior or manner. Moral values stimulate prosocial behavior, including the practice of disinterested and selfless concern for the well-being of others (Zak, 2011). Not to mention, the study of Jordan, Brown, Treviño &Finkelstein (2013) remarked that an ethical leadership is positively connected to the leader’s cognitive moral development.
An ethical leadership’s core values are the leader’s and his subordinates’ personal characteristics, which involve honesty, caring, fairness, and reliability (Kalshoven, Den Hartog & De Hoogh, 2011). With regards to the facts mentioned above, making businesses more ethical would initially come through the changes in administrative behavior (Sethi, 1994). He also believes that the large majority of corporations are the market moralists, so they follow ethical standards.
The market moralists have instrumental values, which are interpersonal or social. Furthermore, this means that they are endeavoring to seek a goal being courageous, honest, and ambitious (Zak, 2011). Sethi (1994) states that the perfect competition keeps firms honest due to the fact that in a perfect competition businesses sell identical or the same products and set similar prices as competitors. However, this is not the only case when the company chooses to operate taking into account ethical and social standards. As stated above, the majority of the businesses incorporate ethics into the policies and culture of their firms. 93% of the 207 American businesses stated that they are taking steps to engage in the ethical behavior to enhance the ethical environment in their firms, raise social responsibility and provide legal assentation (Center for Business Ethics, 1992).
When in fact, 30% of the corporations participated in the survey, stated that their goal of management philosophy was only to increase their earnings. Above all, there are numerous benefits of encouraging the ethical and socially appropriate behavior. More importantly, not only the businesses take advantage of ethical operation, but also economics, society and the global market as a whole benefit from it. For instance, one of the main goals of a corporation could be protecting their good name, which is reputation.
Firms that are known for having corporate social responsibility concept are highly respected in the global marketplace. The concept is prominent for focusing on human rights, health, safety, the endowment to economic improvement, corporate governance, and working conditions. (Isaksson, Kiessling & Harvey, 2014) corporate social responsibility has become a significant tool for permanent validity and profitability. Alternatively, businesses engage in socially desirable behavior to protect public expectations, company’s culture and rival standards (Sethi, 1994). Moreover, ethical businesses reach customer loyalty and public trust by ensuring the quality of products or services they offer. Employee and stakeholder satisfaction, reduced government regulation, the market reward for a corporation’s strengthened ethical behaviors are the benefits for the business itself and economy as a whole (Sethi, 1994).
(Blau, 1964) workers who feel to be more trusted and treated with justice are more likely to express the same feelings toward the company they are working for. In addition, this leads to positive motives, decisions, and actions (Lewicki, 1995). Businesses that admit ethical behavior and are successful- motivate other businesses to follow moral standards and avoid unethical lapses. Eventually, it results in an increased number of firms engaging in the ethical behavior, improved standards of living, meliorated moral behavior in the society, and last but not least, developed economy.
Sethi (1994) provided two explanations for morally ethical behavior. First one is about the character of public and private products in the society and the social methods for dispersing open merchandise and social criteria of changing over open merchandise into private merchandise. The second one relates to the idea of the scholar center and the esteem set of the business foundation, structure of an industry, esteem introduction and reward system of the best corporate chiefs. As a final point, an ethical behavior is very respected and highly required to gain benefits for the company and make it favorable for the society and the global market.
The key hypothesis was that the ethical behavior positively affects morals and economics of the global market. Firstly, the ethical behavior of firms can positively influence the morals of society by supporting human rights, treating employees, customers and suppliers with respect, providing adequate information, offering qualified products and services, which all would lead to the same feeling and respect to one another in the society. Secondly, management philosophy has a priority of gaining a competitive advantage over its rivals. Thirdly, corporate social responsibility is a globally known approach that many companies try to establish at their workplaces. Unfortunately, there were some limitations to provide an elaborative answer.
Some of these limitations include lack of educational degree, which would give an opportunity to make experiments, share with my studies, and provide the results. Also, the word count is one of the limitations of this research. One of the suggestions for a future research is to study how the exactly ethical behavior of the business affects other firms in a global market. Additionally, what are the consequences of the firms that engage in unethical attitudes.
Finally, proving readers with the results of a survey or questionnaire-targeted managers of ethical businesses asking what are the disadvantages of the socially desirable behavior is needed. To conclude, this research introduced to the current ethical issues of the markets in developing countries, such as Bangladesh, China, Indonesia, to name a few. Another concern of the ethical issue is destroyed privacy and usage of personal data that governments and corporations make use of in order to control and manipulate people.
The markets based on captive employees are not morally legitimate because it is considered as unethical behavior. As stated above, unacceptable business practices are morally wrong, it does not support human rights or workplace environment conditions. Businesses that have a lack of thereof risk their good name for earning high profits, but unfortunately, if they are caught of engaging in unethical behavior, there is a high penalty that can ruin their whole business. On the other hand, ethical businesses are known for their good reputation.
Management philosophy requires additional costs and spending, but they are also able to achieve high revenues with a greater benefit for following ethical standards. These companies are gaining benefits for themselves, as well as providing advantages for the economy and the society. Consequently, engaging in ethical behavior is beneficial for businesses. It does not require taking any risks concerning profits or reputation of the company.
Sethi (1994) states, “In one sense, society’s moral and ethical values are public goods”. These goods are not meant to be harmed or be disrespected. Thus, higher ethical standards would best serve as they bring a variety of advantages to the society and the global market.