CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Ethics
and social responsibilities of a business and their organization have been
extremely important to every society and Nigeria at large. Every society makes
sure that those who engage in any form of business should engage in good morals
in their daily activities Koonmee et al., (2010). Ethics and social responsibilities are related
concepts that pay special attention on moral conscience of business. The idea
of ethical responsibilities has to do with those issues and problems that
concerns people in business and their faithfulness to their organization and to
their customers as well Carlson et al., (2011).
An ethical business
organizaiton would help establish an efficient and effective economic system
Johnson, K.W. (2004). 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. However,
since few human social systems work perfectly, the importance of business
ethics has also aimed to minimize the abuse of the ‘‘imperfect’’ economic
system, while still attempting to maintain the creativity, efficiency, and
effectiveness of that same system Kotler, N.L. (2008).
According to Dr. Bello A., (2009), in his book titled
Marketing Principles and Management, 2nd Edition, he opined that
Ethics can be analyzed in several different frames of reference-level of moral
agency may vary as what may be ethical in one business organization may be
unethical in the other.
He stressed further,
that we are most accustomed to thinking about ethics interpersonal terms, for
example, disclosure obligations of sales representatives to client or
customers. Many ethical issues are
organizational in nature, for example, the policies of corporations or
government agencies that directly or indirectly may influence actions or their
consequences.
Business organizations
structured on an ethical design are expected to behave in a manner that
minimizes the abusive use of power and reasonably assists their stakeholders
with the negative implications Laurel, B. (2007). The importance of ethics and its implications
on business organizations cannot be overemphasized as it creates an environment
within the company that promotes trust within and outside the company, which
would eventually lead to growth and profitability Lewis, B. (2002).
The perception on
business ethics has barely changed in the past three decades, meaning that
ethical issues in businesses are still rampant even in the 21st
century Nicholas, A. (2002). To address the situation, ethics programs have to
be implemented in organizations to regulate and resolve the trust issues that
are present Tota and Shehu, (2012). However, past studies have not
differentiated the various ethics programs made in terms of their scope in the
business Kaptein, (2009). There
are laid down rules that govern every profession. In enabling vivid understanding of what
“ethics” actually means, the following phenomena such as law and morality will
give an insight to ethical issues:
Laws
are laid down rules made by administrations, communities, governments etc. and
the motives of these laws are primarily to regulate or check discrepancies or
misconduct as may be observed in human character or behavior. Summarily; laws
improves human character, which when absent could bring about disorderliness
and chaos Taylor, P. M. (2010).
Morality
on the other hand is related to the opinion principal of good and evil as it
affect human conduct. It comes from the mind to differentiate good from evil. In other words, it refers to morals as love
and ethical virtues. Finally, morals involve individual character considered by
the winning standard of moral honesty Bryman, A. (2012). Ethics has been defined as the principal of
right and wrong conduct by the American heritage dictionary (second college
edition). It is also the general study
of the entire nature of morals and the specific moral choices made by a person
as it affect his relationship with his fellow individuals.
Members of every profession
are being guided by some codes of conducts; such professions include, Lawyers,
Doctors, Customs, Accountants, Stockbrokers etc.. There are some ethical
conducts that are written down on paper, whereas others are verbal or
unwritten. These rules are made known to the members of a particular profession.
To be ethical means adhering to these rules in your day to day activities as an
organization or individual Churchill, L.R. (2013).
In an attempt to help
business organizations exercise proper business ethics, this study aims to
investigate the importance of ethics and its implications on business
organizations using NICON Insurance Corporation, Central Business District,
Abuja as a case study.
1.2
Statement of the Problem
The indiscretions of
one’s ethical principle vary from providing false information and manipulation
(Johnson 2004; Carlson et al 2011). Business organizations who are in competition
with one another have a tendency to play foul, ignoring the virtues of morality
and ethics to outpace their rivals. They are being met with a considerable load
of pressure, rooting from the operations, up until its marketing leg Ferrell
and Ferrell (2011). The pressure of competition makes business organizations
focus on their objectives, causing them to compromise their principles that
bind them in the virtues of morality and ethics (Kalshoven et al2011;
Elango et al 2010).
There are common
instances wherein business organizations provide misleading information to
their customers, just to entice them to make a purchase Johnson, (2004). An
example of such is a clear indication that business ethics is not being adhered
to. The aforementioned common practice
of some businesses leads to the unprecedented result of compromising the
quality of services and products that are being offered as the aggressive
competition rivalry pushes the concept of quality to the side-lines, hence the
investigation of ethics and its implications on business organizations. Thus, this
will help the business organizations to understand the pros and cons of ethics
since a variety of companies have been involved in compromising their ethical
responsibilities to their clients, this concept may be used to address the
ethical issues prevalent in varying industries. The balance between business
organizations ethics and operations would assist in identifying how companies
align their moral obligations to their stakeholders with their overall business
strategy Lewis, (2002).
Business
organizations should have a dynamic social responsibility to enable it
influence it’s environmental positively for viability and stability. The
objective of every organization should be to maintain a worthy
inter-relationship amongst its stakeholders, and its environment in order to
enhance cordial outcome.
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