CHAPTER TWO
LITERATURE REVIEW AND THEORETICAL
FRAMEWORK
2.1 Introduction
This aspect
of the
study examines related literature on the subject matter -
literature on ethics will be reviewed.
Also included is the concept of ethics and social responsibility in business
organization, involvement of government in ethics and social responsibility,
ethical responsibility of NICON Insurance, theoretical framework, theoretical
bases, review of empirical studies, study gap and summary of review.
2.2 Concept of Ethics and Social Responsibility
in Business Organization
According to
Pearl and Hughes (2008), ethics is defined as acting to prevent a substantial
harm to others when an individual or group has an opportunity to do so for
their own benefit. Mc Antony (2004) postulated that moral standards deal with
matters that we think can seriously injure or seriously benefit human beings.
On his part, Kim (2007) asserts that moral judgments function to condemn human
plans or activities that make life unbearable for others and morality functions
to limit selfish actions that cause such harm. By definition, stakeholders
represent the groups most subject to potential benefit or harm by business Elango et al., (2010). For this study,
stakeholders included employees, customers, other supply-chain companies, stockholders (as a special group),
and communities in which the company operates Nicholas, (2002). The mission of ethics is to ameliorate the
abusive use of power and reduce the negative impact of chance in the everyday
lives of humans Kalshoven et al., (2011).
Realistically,
improving the human condition of stakeholders within the naturally occurring
‘human jungle’ provides an appropriate test for business ethics Ethisphere, (2010). Ferrell (2009) sought to find out what
would an ethical society do to help establish an environment for improving the
lives of its people. In his opinion, such a society would certainly
want to establish an efficient and effective economic system. A system that
produces the opportunity for greater economic welfare is very important in
facilitating a well-structured, happy life for the citizens of that society
Navran, (2002).
From the
findings of the study, it was clear that the only thing that an ethical society
would do is to give more focus to business and business ethics. However, since
few, human social systems work perfectly, an ethical society would also want to
minimize the abuses of the imperfect economic system selected, while still
attempting to maintain the creativity, efficiency, and effectiveness of that
system Maignan et al., (2011). This
society would also expect the companies operating in that system to behave in a
manner that reasonably assists their stakeholders to eradicate the negative
impact Carlson et al., (2011).
2.3 Involvement of Government in Ethics and
Social Responsibility
One
long-held business concepts states that when it comes to government oversight
in the free market, the less intervention, the better. This is true to some
extent, at least in that it is undesirable for the market to be distorted by
heavy-handed restrictions or to see failing business models being artificially
propped up by bailouts Johnson, K.W. (2004).
However,
the government plays an important role in encouraging businesses to behave in
an ethical manner, both by encouragement and coercion, as it cannot be assumed
that all businesses will behave ethically without enforcement of regulations. Below are some of the ways that government
get involved in business ethic and social responsibility:
Legislating Role:
Some degree of legislation
by the government is necessary to ensure that businesses comply with their
ethical obligations and the public does not suffer as a result of dishonest
business practices Lukerburg, G. (2010).
For complete materials, visit www.researchshelf.com
No comments:
Post a Comment