good business thesis rev2 (draft)

8/9/2019 Good Business Thesis Rev2 (DRAFT)

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Table of Contents & Brief

What is Good Business? 1The theory behind Good Business 1What this thesis is about 1

Why is Good Business important? 2Public view of corporate ethicality 2Increasing rate of unethical behavior 2Better businesses create a better world 2

Ethical Business 3 A brief history of the study of ethical business 3What is ethical business? 3

Beginning Integration 4The Golden Rule, as presented by Maxwells Ethics 101 4Moving toward acceptance 4Develop a Code of Ethics 4

Case Study: Enron 5History of the Enron scandal 5What we can learn from the Enron scandal 5

THE CENTER for ETHICAL BUSINESS

THE GOOD BUSINESS THESIS


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What is Good Business?

The theory behind Good BusinessGood Business is a combination of a number of mentalities and approaches in business, inthe subcategory of business practice. Good Business is composed of the following

components:

ethical business

social responsibility

labor ethics

Good Business aims to advocate for a more responsible form of business.

What this thesis is about

This thesis is the denitive guide on the theory and the practice of building and sustainingsocially responsible and ethical businesses. Within, this thesis will discuss the background

of Good Business, why it is important, the history of ethical business, the theory behindputting Good Business behind an organization, case studies based on past instances of

ethical or unethical business behavior, and lastly, the method of implementation of themethods of Good Business into new or existing organizations, and why it is important to

do so.

This thesis, and the Center for Ethical Business, aims to dene the Good Business

landscape and allow for a common ground for discussing ethical business in general. Inaddition, it aims to allow new and existing business owners, as well as individuals within

organizations, include Good Business in their respective groups.


THE GOOD BUSINESS THESIS 1


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Why is Good Business important?

Public view of corporate ethicality Constantly, throughout the years, ethical businesses is constantly challenged. Whether thetrigger for infringements upon ethicality in companies are based in corporate greed,

necessity for the continued operation of the company, necessity for the continued

operation of the sector the company is in, or any other factorunethical corporatebehavior has become something of a cornerstone of American corporate culture, as wellas the public view of corporations.

In the past hundred years, the American view of corporations has changed for the worse. The view of corporations has changed from a provider of services in the past, to today

for many companiesan organization that has to be watched, regulated, and that wouldbe expected to participate in unethical behavior.

This isnt how the view of businesses should be.

Increasing rate of unethical behaviorWeve seen Enron. Lehman Brothers. Madoff Investment Securities. Goldman Sachs. The

rate of unethical behavior in the corporate world seems to be increasing, and with it, theacceptance of such actions seems to be increasing as well, creating a vicious circle.

Better businesses create a better worldBusinesses, whether it be a new startup or a large multinational conglomerate, have agreat deal of inuence on the world. With better businesses that are based on the ideals of

Good Business, we can create better products, better experiences, and a better world.




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Ethical Business

A brief history of the study of ethical businessIn the latter part of the 20 th century, American corporations started adopting ethicalpractices like nonprot divisions and charitable actions that sparked the ethical business

movement. Although the eld was young at this time, it slowly started to develop, and

eventually it became a eld of study. Now, with the increased study of ethics as applied tobusiness, as well as the factor of globalization, it is a major area of the foundations of businessas it should be.

What is ethical business?Ethical business is the evaluation of business practices against a background of social,economical, and moral standards, to assess the impact that the practices will have on the

three areas. Indeed, the moral aspect is emphasized, though both morals and ethics havetheir own complex forms. These ethical standards are dened both with the economy and

society as a whole, as well as within a company.

For an organization to adopt ethical business, the organization does indeed have to

sacrice a number of other attractive advantages, such as the benet of maximizingrevenue without regard for ethical or unethical practices; exibility on making decisions at

any level, whether it be executive, managerial, or on the employee level; lack of a need of

oversight over ethical business practices in an organization, and other positives that notadopting ethical business adds.

However, becoming a business having roots in ethicality has many positives. Past studies

have shown that businesses that have acted ethically ultimately gain customer trust andgo further than others that do not, while at the same time perpetuating ethical business.




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Beginning Integration

The Golden Rule, as presented by Maxwells Ethics 101In John C. Maxwells introduction to business ethics, in his book Ethics 101, he presentsthe golden rule of ethicality that can be used not only in business but also in any situation

that requires an ethicality check. It is, essentially: would I like to be treated in this way?

This, indeed, the ultimate ethicality check, as it brings the action that someone isperforming upon someone elseunto oneself. This is the number one tenet of ethicalbusiness: in order to accept performing actions upon others, you must accept performing

those same actions upon yourself. Once this action is established as something you, too,would accept, it becomes more likely to be an ethical decision.

Moving toward acceptanceFor ethical business to become an important force in an organization, there must be wideadoption and acceptance of the idea and the importance of ethical business. Send

managers and employees this thesis/whitepaper and allow them to look through the casestudies and core components of ethical business. Give them time to digest the

information, specically about the positives of ethical business in an organization. Thisthesis shows concepts by example rather than tells them.

Develop a Code of Ethics

Tailor a Code of Ethics toward your organization to t your organizations industry,company goals and targets, and products. This is the ethical blueprint for your company:

what your company should follow with regard to ethics.




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Case Study: Enron

History of the Enron scandalEnron, a major energy company and one of the largest corporations in the world, startedto collapse as important details about its nancial status were revealed. It managed to

evade federal taxesgoing as far as gaining money from the governmentfor four out of

the ve years during 19962000, for a total of a $381 million tax rebate from thegovernment. Over time, it was revealed that Enron was forming foreign subsidiaries toescape taxes and debt, managing to conceal $1 billion of debt inside these subsidiaries,

which was done in October 2001. Andersen, the Enron accounting rm, denied that thecompany was in deep nancial trouble whilst it and Enron shredded documents about the

rm. Soon afterwards, the SEC began an investigation into the company, which resulted inthe resignation of the CEO Kenneth Lay on January 23, 2002; the apparent suicide of Vice

Chairman J. Clifford Baxter; and the release of documents from Enron admitting criminal

offenses and nancial deceptions performed at the company by new CEO StephenCooper.

What we can learn from the Enron scandalEven though the Enron scandal was on the level of major corporations, it is still important

to note the instances of unethicality inside Enron. These include the shredding of documents by both Andersen and Enron (clear indicators of guilt for both companies),

Republican political connections trying to push the Enron issue under the rug, deceptiveinformation given by CEO Kenneth Lay about the company, and other issues that led to

the uncovering of the scandal. The scandal encompassed many areas (corporate, political,international, etc.), and increased public distrust in corporations and deregulation,

increasing tension between customers and corporations, a fatal economic condition.




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Social Responsibility

Introduction to Social Responsibility Social Responsibility is the belief that corporations that serve a community are obligatedand have a responsibility togive back to the community at large, or at the very least, be

responsible towards the companys effect on society as a whole.

The rst kind of social responsibility, giving , is focused on the positive benet that

companies can bring upon society in their areas of interest, via active participation, likesupport or formation of charities and organizations promoting positive societal inuence.

The second kind of social responsibility, commitment , is focused on watching andmaking sure the company is not making substantial negative inuences upon society as a

whole. While a companys societal effect is inherently unmeasurable since it is both a vastidea with many different variables, and that these variables are qualitative evaluations, a

commitment to social responsibility shows that a company is aware of and watches overtheir general power. In addition, a company that is devoted to social responsibility aims to

inuence the company towards this sentiment, though the power of social responsibility isheld in the positions of management.

Why is Social Responsibility important? Although the commitment area of social responsibility has an aim similar to that of ethicalbusiness (to do good and not do bad, in laymens terms), it is somewhat different than

ethical business. Social responsibility is focused on the companys actions as a whole,towards society (like labor concerns, environmental affairs, and similar matters) rather than

acting ethically and within law. Social responsibility goes beyond ethicality similar to howethical business goes beyond staying within law.



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