The Role of Ethics in Decision Making
Discuss about the Ethics Standards Or The Code Of Conduct.
Ethics are the standards or the code of conduct that provides guides individual to take wrong or right decisions right actions or activities. This term can also be considered as the fundamentals or the principles of decent human conduct (Bowie, 2017). Ethics for an empirical part in the routine activities and professional life of an individual and that will enable them to find out a clear difference between right and wrong things.
Ethical finance will aid the business organization, employees and the shareholders to make appropriate decisions and choices regarding the financial institutions which the business deals with. We can use ethical finance for most of our business dealings, including insurance, bank accounts, investments, mortgages, and savings. Ethical finance is a way of making the environmental and social commitment comes in light. It can be effective to attract investment, boosting the reputation with the customers and improving the chances when we are selling to large firms or public sector companies (Chell, Spence, Perrini and Harris, 2016). Ethical practice means to focus on the negative or positive ethical issues and deciding between them. A negative ethical promise means that the product is of no harm to the environment or the society (Davies, 2016). Like for example, in an ethical investment portfolio would not include any shares of gambling or pornography that causes pollution in the society. Positive ethical promise includes the money which is used actively for the betterment of the society and the environment. For example, some insurance policies donate their money to the charities when you sign up for them. The following are the key negative ethical issues that include: Child labor, Alcohol, Testing on animals, Tobacco, Forestry abuse, Ozone depletion, Polluters of air, water and land, Human rights issues, Nuclear power, Oil and motor industries. There is a positive side of the ethical issues and that includes Education, Disaster relief, Public transport, Carbon-neutral firms, Energy efficiency, Fairtrade of organic food, Organic farming, and Renewable energy sources, Plant welfare, Recycling.
After analyzing the issues, there are various degrees of ethical responsibility that are required to be chosen. In general, ethical investments and pensions are often ranked by the level of responsibility with it. Ethical financial products, like investments are also socially responsible investment. They are ranked from ‘light green’ to ‘dark green’ by their environmental and social values (DesJardins and McCall, 2014). The light green funds are generally reflecting trends of the conventional investment market. They will invest in the corporations in the US and Europe which includes the chemical and oil firms, but will neglect firms which impact the environment and the arms trade. The medium green funds have tougher criteria. For example, they will invest in small firms but may not involve in banks or pharmaceuticals. The funds also invest in the developed world. The dark green funds have a strict screening process to cut out the sectors of the industry like the oil and the gas and have in smaller firms. There are engagement firms which are used for investing in the firms which have environmental policies like environmental management systems or sustainable development policies. And if you choose to invest in the FTSE 100 companies which has been designed to measure the performance globally with responsibility standards. You might want to consider linking the ethical financial products to the business nature. For example, if a business is selling wooden furniture you might want to get a company some pension scheme to invest for reforestation. An appropriate ethical finance product can increase the environment profile. Some of the ethical financial products include: Credit cards, Building society accounts, Commercial mortgages, Bank accounts, Commercial insurance (Hoffman, Frederick and Schwartz, 2014).
The Benefits of Ethical Finance for Businesses, Employees, and Shareholders
In addition to the financial products the specialist religious products to reflect social and environmental concerns, many building societies give products based on the religious belief. Like for example, the Islamic products of banking have complied with the sharia law. The Islamic mortgage does not levy any interest. And all the sharia law are for the permissible companies. Currently, several UK banks are offering the sharia-compliant mortgages.
Cooperatives are the leaders when it comes to the community investment. But the prime question is why ethical finance means so much. It could cover every channel as to where your money is going and which includes the pensions and the ethical funds. According to the UK sustainable investment and the finance association, 34% of the asset managers see for the socially responsible investments and indicators all around the environment and governance. The types of institutions which provide ethical finance:
Ethical banks: It is bank concerned with the environmental and social impacts of the loans. Customers can look out for the services in another commercial bank. It is important not to confuse the commercial banks with the ethical banks which offer sustainable products. The commercial banks are not ethical only.
Ethical finance cooperatives: It is democratically governed organization which provides microfinance to low-income family businesses (Paquette, Sommerfeldt and Kent, 2015). The services have loans, insurance, and remittance services. And such institutions can be organized as a microfinance organization. They are usually more limited in terms of services they provide.
Microcredit cooperatives: It provides small loans to poor low-income clients. The loans offered are collateral, to an individual or through a group lending mechanism that allows a lot of individuals to provide collateral or to assure a loan by group payment pledge. Although the finance institutes are related, the three types of institutes do not same work.
The origin of money – It does not accept any kind of ‘dirty’ money which comes from the illegal, and highly polluting activities (Trevino and Nelson, 2016). The destination of money – Ethical finance institution lends and is oriented towards positive, environmental and social impacts. For that reason, it supports the weaker human, economic sections of the population with the most disadvantageous areas of integration and employment. The criteria and values for the use of money: The clear and fair handling of loans between and ethical finance institute and the customers. The model is traditional, and in that the savings are used as lending activities. Personal financial guarantees and go hand in hand with the economic ones. The management and objectives of the ethical finance institution – A finance institute does not see profit as an end. Gain is important for the reliability and affordability. Profits are for the most part of the social objectives of the bank.
Negative and Positive Ethical Practices
Ever since the beginning of the global financial crisis, the soundness of the Ethical Finance Institutions has expanded and drawn the increasing attention from the investors (Hartman, DesJardins and MacDonald, 2014). In general, if we consider the period after the boom of the crisis and at a global level of ethically oriented banks: Delivering twice the solvency in relation to the assets of the financial statements with relation to the systematic books, offering a large return on the investment and low levels of fluidity and better level of capitalisation.
Finance, which is specifically for the voluntary movement of capital from the people who need it for the need of creating and managing a business which gives its investors, vendors, employees and the community which is a noble undertaking. If it doesn’t have such a mechanism, the progress is stagnant and the technological enhancement is erratic and intractable (Hiekkataipale and Lämsä, 2017). The willingness of the people who combined with the ones who accept ordinate, the unknown risks of bearing capital loss which has stimulated big benefits for the mankind reducing the burdens of extending life and the spiritual adventure.
While many might think that the industry is moral and ethical, which has been an outside element which is outside the boundaries of the acceptable behaviour (Schwartz, 2017).. Ethical standards have been brought down to doing only what is required to decrease an enforcement or criminal charge, rather than being focused on the right thing.
References
Bowie, N. E. (2017) Business ethics: A Kantian perspective. UK: “`Cambridge University Press.
Chell, E., Spence, L.J., Perrini, F. and Harris, J.D. (2016) Social entrepreneurship and business ethics: Does social equal ethical?. Journal of business ethics, 133(4), pp.619-625.
Davies, P.W. (2016) Current issues in business ethics. New York: Routledge.
DesJardins, J.R. and McCall, J.J. (2014) Contemporary issues in business ethics. Boston: Cengage Learning.
Hartman, L.P., DesJardins, J.R. and MacDonald, C. (2014) Business ethics: Decision making for personal integrity and social responsibility. New York: McGraw-Hill.
Hiekkataipale, M.M. and Lämsä, A.M. (2017) What should a manager like me do in a situation like this? Strategies for handling ethical problems from the viewpoint of the logic of appropriateness. Journal of Business Ethics, 145(3), pp.457-479.
Hoffman, W.M., Frederick, R.E. and Schwartz, M.S. eds. (2014) Business ethics: Readings and cases in corporate morality. US: John Wiley & Sons.
Paquette, M., Sommerfeldt, E.J. and Kent, M.L. (2015) Do the ends justify the means? Dialogue, development communication, and deontological ethics. Public Relations Review, 41(1), pp.30-39.
Schwartz, M.S. (2017) Business Ethics: An Ethical Decision-making Approach. US: John Wiley & Sons.
Trevino, L.K. and Nelson, K.A. (2016) Managing business ethics: Straight talk about how to do it right. US: John Wiley & Sons.
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
