Importance of Ethics to Business Success
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- Date Submitted: 10/23/2010 11:03 AM
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Ethics commonly refers to the rules and principles that define right and wrong conduct. Ethics is defined by Miner (1998) as a philosophy of human conduct; reflecting prevailing values especially those of a moral nature.
According to Kiston, (1996) ethics are moral principles that explain what is right or wrong, good or bad and what is appropriate or inappropriate in various setting.
Blanchard and Peale (1988) defined ethics as the guiding values, principles and standards that help people determine how things ought to be done.
On December 2, 2001, Enron Corporation, once listed as the seventh largest corporation among the Fortune 500, declared bankruptcy. In the months and years that followed, numerous other major corporations were found to have been guilty of similar accounting and financial frauds. Enron’s collapse followed public disclosure of significant debts that had been concealed by complicated and fraudulent accounting practices. Generally Accepted Accounting Principles (GAAP) was sidetracked and it boomeranged. This was made possible with the help of Enron’s accounting and auditing firm, Arthur Andersen, at that time one of the top five international accounting firms. Andersen played both ends of a conflict of interest by earning money both as Enron’s auditor and as consultants in concealing these debts.
Another example of a company that became very successful by reason of ethics it emphasized is Boeing. It was established in 1916 and it became very prominent in the business during the Second World War. It is the world’s largest producer of commercial aircraft.
William Allen took the reins at the end of the Second World War. He faced a formidable challenge of transforming Boeing from a wartime producer to a peacetime manufacturer. He drew a list of resolutions that reflected his personal values and these formed that basis of a strong ethical standard that took the company from ashes to glory. Some of them are listed below;
* Employees must...
According to Kiston, (1996) ethics are moral principles that explain what is right or wrong, good or bad and what is appropriate or inappropriate in various setting.
Blanchard and Peale (1988) defined ethics as the guiding values, principles and standards that help people determine how things ought to be done.
On December 2, 2001, Enron Corporation, once listed as the seventh largest corporation among the Fortune 500, declared bankruptcy. In the months and years that followed, numerous other major corporations were found to have been guilty of similar accounting and financial frauds. Enron’s collapse followed public disclosure of significant debts that had been concealed by complicated and fraudulent accounting practices. Generally Accepted Accounting Principles (GAAP) was sidetracked and it boomeranged. This was made possible with the help of Enron’s accounting and auditing firm, Arthur Andersen, at that time one of the top five international accounting firms. Andersen played both ends of a conflict of interest by earning money both as Enron’s auditor and as consultants in concealing these debts.
Another example of a company that became very successful by reason of ethics it emphasized is Boeing. It was established in 1916 and it became very prominent in the business during the Second World War. It is the world’s largest producer of commercial aircraft.
William Allen took the reins at the end of the Second World War. He faced a formidable challenge of transforming Boeing from a wartime producer to a peacetime manufacturer. He drew a list of resolutions that reflected his personal values and these formed that basis of a strong ethical standard that took the company from ashes to glory. Some of them are listed below;
* Employees must...