Business ethics

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Business Ethics3

Business Ethics

  1. Major ethical issues

Enron’s accounting fraud

This is the main issue because it is associated with the company’s performance and financial transactions. The management team of the company if greedy for money in that the leaders tend to break the rules, lies, and cheats, in order to make extra money for individuals (Sims, & Brinkmann, 2003, 248). The leadership of Enron Company was deceiving the employees that they would benefit from the sale of the stock, but only the executives were able to benefit. The Enron leadership also deceived the company’s investors who later lost their money because the former CEO Fastow had allowed buying and selling of the company’s assets without keeping records on its books.

Enron’s reward system

This is a major issue in my eyes because it is commonly identified in the company’s operations. The company’s rewards system is questionable because the management focuses on the retention and promotion of only those employees who have consistent production, but fails to consider ethics. The workers are unfairly compensated because the leadership prioritise their self-interest before meeting the interests of the company and its workers (Sims, & Brinkmann, 2003, 253). As time continued to pass, the reward system changed to be more liberal. The compensation caps were removed from the reward standpoint and due to the fact that people were making huge amounts of money, the company boosted for paying efficient salaries (Shaw, & Barry 2015). The human resource complaint about the conduct of some workers was ignored even after the leadership started offering unlimited vacation period.

  1. Aristotle’s ethics

We enact and develop virtuous traits through being happy all the time, being intellectually and morally upright. The capacity of being virtuous is in us and we need to avoid doing too much or too little of something. One should be honest at the right time and through the right manner. This requires one to be virtuous by avoiding extremes in emotions and actions (Crossan, Mazutis, & Seijts, 2013, 569). This means developing emotions of the right extent, to the right person, at the appropriate time, with the right intention, and through the right manner. One should also use the internal motivation in the right way to get the necessary results (Shaw, & Barry 2015).

This is different from the consequentialist theory, which emphasizes that the right conduct is the one that maximizes the good, whereby what matters is the results, not the activities. Moreover, it is based on the argument that morality of an activity if judged by the created impact. In non‐consequentialist theory there is the judgment of the reason behind an action, but not the results. It is clear that the virtue ethics evaluate the moral character of a person, not personal actions, impacts, or duties at all. However, the consequentialist and non‐consequentialist theories are both focused on the aspect of judging other people (Pettit, 2016, 29). In the virtue theory, there is no identification of the universal principles or rules in a particular case. On the contrary, the consequentialist and non‐consequentialist theories consider the presence of the moral rules.

  1. Kellogg’s CSR statement

Kellogg’s CSR statement is not sincere but the company is trying to convince stakeholders that the company is socially responsible. The company’s goods are not healthy, despite the CSR statement that Kellogg concerning its practice in trading with nutritious products and enhance retention of healthy lifestyles. The products have some saturated salt, which is harmful to human body, thus proving the statement wrong (DesJardins, & McCall, 2014). Consequently, Kellogg was practicing unethical business and it should avoid claiming that the products have the capacity to promote healthy lifestyles in its CST statement just for increased profits. The company gains bad publicity.

The Kantian theory is associated with the moral principles focusing on the intention or the reason for the conduct of an action (Korsgaard, 2014, 34). It considers universal acceptability, good will, respect for the human beings, and categorical imperative. the categorical imperative is the conduct of the party as per the universal law.

According to the Kantian theory, Kellogg is not acting in good will, but its aim is the acquisition of increased profits. The actions conducted by Kellogg are not justified by the categorical imperative. Kellogg should make actions across the entire world (Shaw, & Barry 2015). Hence, it will not be straightforward if all global firms make a counterfeit allegation about the efficiency of their products in their CSR statement. Therefore, it could not be possible to justify Kellogg’s actions using Kantian’s categorical imperative rule since it identifies Kellogg’s actions not satisfying the actions truly done in the company (Forsyth, 2013, 271).

4. Fair trade

The other perspectives on fair trade that could be considered are;

Lifting the numerous poor people from their status and working towards the improvement of the world trade rules to be just and enhance equality, thus the reduction of the gap between the poor and the rich. The fair trade should also address the issue of health to the poor and provision of chances to get direct to the market rather than trading their products through intermediaries. There should also be the consideration of sustainability of all the activities conducted by the manufacturing companies (Geldres-Weiss, Soto, Ramos, & Uribe, 2016, 2). The environmental pollution should be dealt with efficiently for improved people’s health. Women should also be empowered through the provision of chances to do lighter jobs rather being subjected to hard tasks. Fair trade should also consider the provision of sustainable product in the market to demonstrate concern for human life.

The corporations have a responsibility to the global community of ensuring ethical conduct in their operations (Shaw, & Barry 2015). It is the responsibility of the corporations to ensure good conduct during the production and manufacturing activities to avoid environmental pollution by engaging in sustainable businesses. Organisations also need to compensate the global community for pollution of the air, water, and the surrounding, and offer support to the needy people in the community (May, Luth, & Schwoerer, 2014, 72). The corporations have social responsibilities of producing valuable and healthy products that demonstrate increased concern for the good health of the global community.


Crossan, M., Mazutis, D., & Seijts, G. (2013). In search of virtue: The role of virtues, values and character strengths in ethical decision making. Journal of Business Ethics, 113(4), 567-581.

DesJardins, J. R., & McCall, J. J. (2014). Contemporary issues in business ethics. Boston: Cengage Learning.

Forsyth, D. R. (2013). Judging the Morality of Business Practices: The Influence of Personal Moral Philosophies. In Citation Classics from the Journal of Business Ethics (pp. 265-277). Springer Netherlands.

Geldres-Weiss, V. V., Soto, M. A., Ramos, H. R., & Uribe, C. T. (2016). Social Capital and International Business Networks: The Case of a Fair Trade Organization. J Account Mark, 5(168), 2.

Korsgaard, C. M. (2014). From duty and for the sake of the noble: Kant and Aristotle on morally good action. In Kant on Emotion and Value (pp. 33-68). Palgrave Macmillan UK.

May, D. R., Luth, M. T., & Schwoerer, C. E. (2014). The influence of business ethics education on moral efficacy, moral meaningfulness, and moral courage: A quasi-experimental study. Journal of Business Ethics, 124(1), 67-80.

Pettit, P. (2016). Non-consequentialism and political philosophy. Enfoques, 18(1-2), 27-49.

Shaw, W. H., & Barry, V. (2015). Moral issues in business. Boston: Cengage Learning.

Sims, R. R., & Brinkmann, J. (2003). Enron ethics (or: culture matters more than codes). Journal of Business ethics, 45(3), 243-256.


Aristotle’s Virtue Ethics: (

Kellogg’s CSR statement:

Fair trade: