Assignment 2

Assignment 2 - Provide question with an answer.

Question 1 : What are the three ethical decision criteria ?

Answer :

An individual can use three different criteria in making ethical choices. The first main point is the utilitarian criterion, in which decisions are made solely on the basis of their outcomes or consequences. The goal of utilitarianism is to provide the greatest good for the greatest number. The view tends to dominate business decision making. It is consistent with goals like efficiency, productivity, and high profits. 

The second main point for ethical criterion is to focus on rights. This calls on individuals to make decisions consistent with fundamental liberties and privileges as set forth in documents such as the Bill of Rights. An emphasis on rights in decision making means respecting and protecting the basic rights of individuals, such as the right to privacy, to free speech, and to due process.

And the last main point for ethical criterion is to focus on justice. This requires individuals to impose and enforce rules fairly and impartially so that there is an equitable distribution of benefits and costs. Union members typically favor this view. It justifies paying people the same wage for a given job, regardless of performance differences, and using seniority as the primary determination in making layoff decisions.

Each of these criteria has their advantages and liabilities. A focus on utilitarianism promotes efficiency and productivity, but it may result in ignoring the rights of some individuals. It particularly those with minority representation in the organization. The use of rights as a criterion protects individuals from injury and it is consistent with freedom and privacy, but it can create an overly legalistic work environment that hinders productivity and efficiency. A focus on justice protects the interests of the underrepresented and less powerful, but it can encourage a sense of entitlement that reduces risk taking, innovation, and productivity.

Question 2 : What are the relationship between Business Ethics and Corporate Governance ?.

Answer :

Business ethics and corporate governance are two significant factors that impact a company and on how it operates. Business ethics represent the values, principles or characteristics that a company must follows when conducting a business. Corporate governance is the internal framework that a company designs and implements to govern and protect those invested into the company. The relationship between ethics and governance comes from an organization’s owner or executive managers, who create the governance and decide which ethical principles employees will follow.

Business ethics typically follow a normative theory, where the theory states that individuals and firms must follow the ethical principles that are commonly found in society, which is the term normative, or standard, ethics. This three normative ethic theories include stockholder, stakeholder, and social contract theories. The stockholder ethical theory states that a company should create a relationship between business ethics and corporate governance that focuses on stockholders. Managers will create a strategies and activities that advance or increase the investments of share holders.

For stakeholder theory of ethics, business ethics and corporate governance focuses on anyone who has a stake in the business. Although it was a wide range connection,it is stronger, as recent changes to corporate governance include now any individual who is affected by the company. It ensures that everyone receives equal or fair treatment when dealing with the business.

The third and final ethical theory is the social contract theory. It focuses on companies that improve the overall welfare of society. Shareholders may be less willing to invest money into a company that follows this ethical theory due to the shareholders may lose money to causes or other benefits that are outside of the company’s normal operating context. To make investors fully aware of the company’s social contract theory of ethics, business owners, executives and board members will often include this information in the corporate governance.

Another relationship between business ethics and corporate governance is a company’s mission statement. The mission statement clearly outlines a company’s planned standard of excellence for operating in the business environment. This mission statement can focus more on a social aspect of the operations rather than a profit motive to repay shareholders.For companies that using this types, shareholders will invest in the company because they believe in the company and desire to see the company succeed in its social mission.

Sources : 

1. http://www.citeman.com/12962-criteria-for-ethical-decision-making.html
2. Business Ethics, writer Crane and Matten
3. http://www.wisegeek.com/what-is-the-relationship-between-business-ethics-and-corporate-governance.htm

Your writer,

Akeem Mohamad

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Your Writer,
Akeem Mohamad

Is Business Ethics An Oxymoron?

From the normal average person, business ethics sounds like fairytale concept with limited relevance to the real world. The practice of business is to buy cheap and sell at expensive price and will not bother in some instances whether the cheap price obtained or the selling price is ethical or not. From the pace, scale and complexity of modern business has forced a change in how business is done. While it is accepted, it is foolish to do business with someone who is cannot be trusted. A question arise when whether you can trust someone who is not ethical in all of their behaviour. Trust is built on expectations of truth in words and consistency in behaviour. It is impossible to do profitable business with someone who says one things in one day and does something different the next day. There is also exposure to a legal penalties. Companies involved in international trade have to represent their products to potential or current clients based on their expected inputs by the suppliers. A company that is involved in illegal activities, or in knowingly falsifies the information on inputs supplied can create serious problems for its business partners. Another issue challenging the practice of good business ethics is the values which employees bring to the work environment. It had been an issue for over the past years. The effect of low ethical work will results in low productivity owed to high levels of absenteeism, theft and acceptance of bribe taking. A company that wishes to be efficient and competitive in the future cannot accept this state of affairs. So, they need to follow a few ethical behaviour to support their company and also achieve their company mission and vision. These were the several ethical behaviour :

Enhanced Reputation and Goodwill
-  A reputation for integrity is important for securing the loyalty of customers, for recruiting and training the best staff, for winning community acceptance and accessing bank and also supplier credit.

Risk reduction
- The process of developing a business ethics program involves the company in identifying and assessing the factors that could pose risks to reputation and financial performance, and developing and implementing the business processes that reduce those risks.

Reduced costs
- Providing employees with clear guidelines of how to conduct day to day business such as where and when to obtain quotations, how to carry out tenders, how to conclude contracts and how to avoid conflicts of interest can reduce transaction costs and improve the supply chain function.

Protection from Unethical Employees
- A program would include clear guidance in respect of the misappropriation and unauthorised use of company resources, and the consequences that could flow from violations, information that employees with undeveloped values may not fully appreciate.

So I believes that the implementation of a formal business ethics program can contribute to an improved culture at a company, and improved overall performance. Ethics in business should not be taken lightly and we believe that such a programme is well worth practising for the growth and development of business.


Your Writer,
Akeem Mohamad

The Definitions ...

Business

- where an organization or economic system where goods and services are exchanged for one another or either for money. Every business requires some form of investment and had enough customers to whom its output can be sold on a consistent basis in order to make a profit. Businesses can be owned privately, non profit or state owned.

Ethics

- can be defined as the critical structured examination on how we should behave. In particular, how we should constrain on the pursuit of self-interest when our actions affect others.

Business Ethics

- can be defined as the critical structured examination on how people or the institutions should behave in the world of commerce. In other side, it involves appropriate constraints from the pursuit of self-interest, or profits, when the actions of individuals or firms will affects others.


Cooperate Governance
- The framework of rules and practices by which a board of directors ensures the accountability, fairness, and transparency in a company's relationship with its all stakeholders which is financiers, customers, management, employees, government, and the community. The corporate governance framework consists of explicit and implicit contracts between the company and the stakeholders for distribution of responsibilities, rights, and also rewards, This procedures is for reconciling the sometimes conflicted with the stakeholder interest with their duties, privileges, and roles. the procedures for proper supervision, control, and information-flows to serve as a system of checks and balances, also called corporation governance.


Your Writer,
Akeem Mohamad

About Me ...

Assalamualaikum and Salam 1 Malaysia to all readers .. This was my first time ever to have a blog and wrote it by my self .. haha .. i did this because of my homework given by Professor Sr Datok Dr Kamaruddin .. he's got so many title .. and for sure he's very talented .. he want's us to call him Pak Din .. and i think he were the coolest lecturer .. haha .. okay now i would like to introduce myself and tell a little bit about myself ..

My name is Azizulhakeem Bin Mohamad .. Live at Melaka or more detail at Bachang (near to Melaka Sentral) .. Age at 22 years old .. born on 12th December 1991 at Johor Bahru .. Diploma holder in Islamic Banking and Finance at Mara Professional Collegue City Campus Malacca .. Had 4 siblings and I'm the youngest .. Dreams to become Central Bank Governers .. haha .. what huge dreams right ? .. but nevermind .. works at banks also can .. like to play football or badminton .. and also bowling .. I'm ex student for Malacca High School which is my secondary school .. and my primary school at Sekolah Kebangsaan Duyong .. Used to represent my collegue before this in football .. playing for kasukma which is "Karnival Sukan Mara" .. Before I came in to Universiti Kuala Lumpur .. I had work at Royal Sporting House at AEON Bandaraya Melaka for a few month's .. and I change my job at Panorama Melaka Berhad .. work as ticket checker .. due to the salary payment and also working hour .. so now I continue my study in islamic finance field and I just realised that from this filed .. it has higher demand for workers which is I can get work easily after I finish my degree .. it also a new field that had been introduce to the world .. when my first time heard about this islamic finance .. i also think it can be a good economic side to the world and with a few information given from my father friend .. i had choose this field for a career to my life .. I hope I can get my degree with a great result so that I can achive my goals and make my family proud of me ..

So that was a little bit about myself and also the reason why I choose this field .. I hope to see you all next time .. thanks because spent a little time to read my blog ..

Your Writer ,

Akeem Mohamad