Business Ethics And Effect On The Development Of Business In Nigeria
BEING A PAPER PRESENTED AT THE INDUCTION OF NEW MEMBERS OF INSTITUTE OF PROFESSIONAL MANAGERS AND ADMINISTRATORS OF NIGERIA (IPMA-NIG) & CHARTERED INSTITUTE OF PROFESSIONAL MANAGERS AND ADMINISTRATORS- USA (CIPMA-USA), AT ALDGATE CONGRESS HOTEL, ABACHA ROAD GRA PHASE 3, PORT HARCOURT ON MARCH 22nd 2014.
To behave ethically is to behave in a manner that is consistent with what is generally considered to be right or moral. Ethical behaviour is the bedrock of mutual trust. Ultimately, the quest for organizational transformation must begin with a personal commitment within each individual to pursue moral excellence. Abraham Lincoln described as the trees and reputation as the shadow. Your Character is what you really are; your reputation is what people think of you. Reputation is a function of perception. ……Abraham Lincoln
At St. James Gate in Dublin, Ireland Guinness was manufactured in 1759. The Company has lived for more than two and a half centuries. The underpinning philosophy is business ethics. The longevity and efficiency of companies like UAC, PZ, etc is attributable to business ethics. In any corporation, what happens when top management colludes with suppliers and rigs the invoice regime without following due process of advertising, tendering and bidding? In a manufacturing firm, what happens when workers engage in pilferage, under-declare sales, bribe auditors, manipulate suppliers just for their personal gains?
The result is simple; the Company will incur losses in profitability, efficiency and reputation; its customers diminish because of distrust, there could be layoffs or rightsizing; its operating licenses may be withdrawn if managers circumvent corporate governance, and ultimately, the Company is liquidated. In Nigeria, there is no indigenous company that has a life span of 50 years. The reason is that In Nigeria the municipal laws operate within very weak institutions, which can hardly carry the capacity of reforms. When a nation is bereft of corporate governance culture, her tax regime will be weak; there will be high level corruption, corporate impunity will ride roughshod, law enforcers will become law breakers; reforms will be unworkable, inflation and unemployment will run amok and such nation’s tangentially miss out on industrialization. This is the malaise that has characterized Nigeria for over four decades.
A student in Harvard University who preferred anonymity said this much:
I will manage my enterprise with loyalty and care, and I will not advance my personal interest at the expense of my enterprise or society. I will protect the human rights and dignity of all people affected by my enterprise, and I will oppose discrimination and exploitation; I will protect the rights of future generations to advance their standard of living and enjoy a healthy planet
Janet Holmes (2010) also averred “We need to shift our emphasis from economic efficiency and materialism towards a sustainable quality of life and to healing our society, of our people and our ecological system”. These two quotations underscore the essence of ethics. Ethics refers to a code of conduct that guides an individual in his/her dealings with others. It has to do with personal behaviour and moral duty. It is concerned with what is right and wrong. In work situation, it is concerned with principles and practices of moral and good conducts in business life.
Business ethics refers to the standards businesses should observe in their dealings over and above compliance with the letters of the law. Business ethics covers issues such as fair dealings with the labour force, customers, suppliers and competitors as well as the impact of business activities on public health and the environment. It implies that whereas businessmen should maximize profits, they should maintain a good reputation and ethical standards that will not conflict with the goal of profit maximization.
The business environment in Nigeria can modestly be described as turbulent, uncertain and rigorous. It is constantly changing and in most cases not dynamic enough to adjust to the environment. Business ethics refers to the standards businesses should observe in their dealings over and above compliance with the law Business ethics covers areas such as fair dealing with customers, suppliers, their labour force and competitors. Good business ethics helps to gain and retain business, customers and other clients. There is also the corporate social responsibility aspect of business ethics where business tries to meet the changing needs of people.
Concept & Scope of Business Ethics
Business Ethics is a field of teaching, training and research which service as a panacea to the negative incidents of unethical global business practices. Business ethics offer sound principles that emphasize the imperatives that corporate and individual corruption leads to a general decay of society. Business ethics believes that when businesses are conducted with morality the interest of all partners can be protected. It basically focuses on the following areas.
• Social responsibility in the management of business
• Corporate Governance
• Corporate Compliance
• Public Sector Governance
• Ethics and employees
• Corporate Social Responsibility
• Work Ethics, and
• Traditional legal reasoning and business rationality
The lack of understanding of the issues of corporate responsibility and environmental ethics is due to various reasons, top among them due to the lack of a global consensus on the significance of taking the right steps and measures to remedy the existing problem. One issue that is pertinent to the environmental ethics in the corporate and organizational world is that there should never be a hazy distinction between what is right for a business and what is valuable to the environment.
Businesses the world over face Ethical issues such as:
Environment justice issues related to resources and resource control.
Employee and work related issues such as casualization of workers
Management and ownership and corporate Governance function
International business practices and CPS investments
Tourism, security issues, cross border training arms and drugs
Business as a good servant promoting the common good and human dignity, and
The management and use of modern means of communication such as ICT.
Business ethics also called corporate ethics x-rays the ethical principles and moral challenges that can arise in a business. Business ethics has two dimensions: namely normative and descriptive. At the normative level Business ethics attempts to underscore business behavior and the range and quality of business ethical issues reflects the interaction of profit maximizing. At the descriptive level, BE discusses how Government use laws and regulations to point business behavior that underlie beyond government control. BE reflects the philosophy of business-which determines the fundamental purpose of a business-which determines the fundamental purpose of a business. For example, if a company’s arm is to maximize shareholders returns, then sacrificiary profits to other concerns negate its fiduciary responsibility.
Ronald Duska (2007) argues that unrestrained corporate freedom would benefit that must in the long term. Milton Friedman on other hand posits that corporate executives will generally be to make as much money as possible while adhering to basic rules of the society but the only entities that can have responsibilities are individuals. A business cannot have responsibilities. The question then is do corporate executives have responsibilities in their business activities other than the money they make for stakeholders? The prime place given to business ethics is not in doubt. In some corporations, ethics officers also called compliance whose responsibility is to manage organizations efforts at achieving ethical.
Business practices. It is the responsibility of these ethical officers to lay down guidelines and set standards business organizations have to follow, but the foundation for ethical behavior goes company; it also depends on individual’s moral training and how competitive a business environment is. In a highly competitive business environment, unethical environmental practices are rife. Basically, ethical principles can be rooted in utilitarian concerns.
This paper is anchored on two theories namely: the Duty Theories and Consequentialist Theories
Duty Theories: Duty theories in ethical thought are based on the idea of doing the right thing even if it comes with a cost. Perhaps the most well-known duty theory is the human rights theory, which states that people should be free as long as they respect the freedom of others. A less well known theory is deontological ethics, which instructs people to act in a way that every other person could replicate and to see people as ends in themselves rather than as means to ends. The human rights and deontological theories play heavily in business ethics. Business managers follow human rights theory when they put rules into place respecting workers' freedom and autonomy. They follow deontological theory when they set up rules that require the business to provide reasonable support to employees and at least listen to their business-related needs.
Consequentialist Theories: Consequentialist ethical theories describe ethical actions as those that yield positive results. The most influential consequentialist theory is utilitarianism, which stresses "the greatest benefit for the greatest number." Pragmatist ethics, which is somewhat less influential, stresses the importance of outcome above principles and accepts that the same actions can be considered ethical or unethical in different circumstances. Utilitarianism is highly influential in business ethics; the business ethos of customer service and utility maximization is derived from utilitarianism. Pragmatist ethics influences the basic business ethos of self-interest and doing well by meeting the consumer's demands.
The Nigerian Business Environment
Nigeria’s economic environment can modestly be described as turbulent. The World Economic Forum in its comprehensive Africa Competitiveness Report, published in collaboration with the Harvard Institute for International Development. Here is the list of Africa's top performers in their order of ranking: 1. Mauritius, 2. Tunisia, 3. Botswana, 4. Namibia, 5. Morocco, 6. Egypt, 7. South Africa, 8. Swaziland, 9. Ghana, 10. Lesotho, 11. Cote d'Ivoire, 12. Zambia, 13. Kenya, 14. Uganda, 15. Burkina Faso, 16. Tanzania, 17. Ethiopia, 18. Mozambique, 19. Cameroon, 20. Zimbabwe, 21. Malawi, 22. Nigeria, 23. Angola. Challenges often identifies include: dearth of infrastructure; poor power supply; Inadequate Security; inconsistent Government Policies; poor transportation. inability to access funds and lack of government support.
Without business ethics, there is no clear moral compass to guide leaders through complex dilemmas about what is right or wrong. Perhaps most important, attention to ethics in the workplaces helps ensure that when leaders and managers are struggling in times of crises and confusion, they retain a strong moral compass. However, attention to business ethics provides numerous other benefits, as well. Anyway, there are many other benefits of managing ethics in the workplace. These benefits are explained later in this document. (Complete (Practical) Guide to Managing Ethics in the Workplace.)
There is widespread lack of commitment to ethical behaviour concern for excellence and self-reliance in Nigeria and in Nigerian Organisations. Akinyemi (2002) noted that one of the greatest social and economic problems in Nigeria and indeed Africa, which must be tackled, is that of breakdown in morals, work ethics, discipline, social responsibility and general civility among its citizens.
Douglas Adams (1987) advocated that “to give real service, you must add something which cannot be bought or measured with money and that is sincerity and integrity”. These ingredients are lacking in the Nigerian business environment. On the contrary, there is executive recklessness, corporate impunity, corruption and lack of adherence to corporate governance. Bruce Mckern, Philip Meza, Ekinadese Osayande and Lyn Denend (2010) observed that for decades, Nigeria had grappled with religious and ethnic unrest as well as highly unequal allocation of resources and doubted if the momentum of recent reforms could be sustained to create a business environment that would make for global competition and investment.
The deficit in infrastructure also poses a challenge. It is estimated that losses incurred owing to power outages amounted to 10% of sales and production. The SMEs are the worst hit. Access to and cost of finance adversely affects the cost of doing business. In the manufacturing sector the three obstacles mostly cited are poor power supply, transportation and access to finance. These are compounded by corruption and crime. Besides, Nigerian firms import 10% of their inputs (large firms 15%) and particularly foreign firms import 39% of their inputs. Importation also faces the bottlenecks of time and customs clearance, which are sometimes enmeshed in underhand deals. Access to land is also difficult because of the cost and the procurement process.
Whereas 39% of firms identify access to land as a severe challenge, 44% of businessmen believe that corruption in the form of bribes, circumventing procedures and payment of informal gifts. Transparency International’s Corruption Perception Index ranks Nigeria 147 among 180 Countries. The 2012 World Bank report on Ease of Doing Business, EoDB, across the globe ranks Nigeria as the 133rd nation out of 183-a drop from 108th out of 178 nations in 2008. This is unpardonably high. Investors do not have robust confidence in the Court Process because the justice sector reforms are not profound. Governmental policies are not also consistent, as they change with every successive administration.
In spite of these challenges, Ajaero (2012) believes that because of the huge potentials of the Nigerian economy and the fact that Nigeria has many successful entrepreneurs, countries like China, South Africa, India and some countries in Eastern Europe are eager to invest in Nigeria. If the potentials are harnessed and the momentum of the reforms sustained, Nigeria can be an investment destination in Africa.
Principles of Business Ethics
Arising from the above findings of the BE, seven identifiable principles can be identified.
1. Be Trustful: A firm should recognize customers who want to do business with the company they can trust. Trust is defined as assured reliance on the character, ability, strength and truth of a business.
2. Integrity: Integrity means wholeness of character by consistency of thoughts, words and actions. Maintaining integrity requires moral courage and fighting your beliefs even when the Chief Executive does not sacrifice principles for expediency.
3. Keep an Open Mind: In order for a company to improve performance, the leader of an organization must be receptive to new ideas such as asking for opinions feedback from both customers and seek the collective contribution of members of the organization.
4. Meet obligations: Irrespective of the circumstances a company must do everything to gain the trust of past customers’ and clients, particularly of something has gone wrong. A firm must reclaim the lost honour by meeting her commitments and obligations.
5. Fairness: Corporations tend to be fair in their dealings with all stakeholders. At all times, a company should reappraise her activities related to community-issues and activities by being a good corporate citizen. The firm must stay involved in community development activities.
6. Have Clear Documents: Re-evaluate all print materials including small business adverts, brochures, fliers and other business documents to make sure they are dear precise and professional.
7. Maintain Accounting Control: Record keeping is an important component of business ethics. Therefore, a company should take hands on approach to accounting and record keeping. Gaining control of accounting and record keeping curbs any other dubious activities.
8. Reputation & Morality: Most Companies are built around reputation and the morale of the employees. They avoid words and actions that are capable of undermining respect, and once there is a breach, they take affirmative action to correct such inappropriate action.
9. Be Respectful: As a good corporate citizen treat clients and customers with utmost respect. Always treat other with professional respect and courtesy.
10. Commitment to Excellence & Leadership: Many firms now pursue excellence in executing their duties. Ethically sound executives are conscious of their responsibilities and opportunities of their position of leadership and seek to be positive ethical role models by their own conduct.
There are three levels of Business ethics. They include:
The macro level: This deals with the role of business in the national and international organization. This is very important in a free enterprise society.
The corporate level: This is where corporate social responsibility issues are tackled and built into the policy formulation and implementation procedures of a firm.
The Individual Level: Here the behavior and actions of an individual within an organization are done in according to specified ethical codes.
At the macro level, fundamental questions like the role of business in society and what governance model is best suited to deliver the most benefits in a morally responsible way. At the corporate level, the rules of business ethics are interpretation of those rules and standards are often defined by specific circumstances within a socio-cultural context in which the business is operating. Whereas all ethics in practice there is often a gap between the behavior of individuals within the working environment and other side it. At the individual level, business ethics is influenced by factors such as personality, peer pressure and the socio-political environment clearly, every corporate entity is directly affected by the individual’s moral and ethical circumstances.
Business ethics is the life blood of every organization. It is at the basis of corporate governance because corporate governance is often defined as business ethics. Corporate governance is important to stakeholders. There is a need to understand that individuals and stakeholders define business ethics differently.
Objectives of Code of Business Ethics
While the objectives of the code of Business ethics are of offer guidance to employees in their business to establishment agreed set of ethical principles such as promotion, and maintenance of confidence and trust, there are some universally acceptable principles of code of business ethics. The code includes:
Confidentiality of information
Disclosure of interest
Consideration of work/External Environment.
1. Integrity: Employees are expected to observe the highest standards of honesty and integrity in their business dealings. Accordingly, purchasing activities and supposed to be conducted with best business practice and in line with the Group’s procurement policy. Employees are to refuse bribes, gifts, hospitality benefits or offers of preferential treatment which may compromise the integrity of the company. Employees must avoid the use of group resources or time for personal gains such as abuse travel facilities and other privileges that would bring the firm to disrepute.
2. Confidentiality of Information: Employees once a duty of confidentiality to the Group in respect of sensitive information. Sensitive information may include commercially sensitive business information such as information relating to business policies or practices employees must exercise due care in communicating with the public and observe appropriate prior consultation procedures with third parties. Confidential information is defined as that which is expressed to be confidential either as regards particular information or business related information the breach of which attracts a firm on summary conviction.
3. Legality: Companies are expected to operate only after the fulfillment of certain regulatory and documentary obligations. Companies are to avoid false, inaccurate or misleading entries in records. One of such records is taxation. Contracts entered into must be complied with because contractual obligations encourage effective and fair competition at all times. There are purchasing and tendering procedures which must be complied with in accordance with the prescribed level of authority for sanctioning companies must comply with anti-fraud procedures expenses for business travel, retirement and identify employments which may give rise to areas of potential conflicts of interest. Legality demands that the laws on gender sensitivity, harassment and bullying must be considered.
4. Disclosure of Interest: Management and employees are not allowed to be involved in outside employment.
Importance of Business Ethics
Ethics are a set of moral standards that are suitable for a business environment. In fact, business ethics are key factors in responsible for decision-making. The business case for ethics is endowed on the personal benefits that can provide the rationale behind high ethical standards.
Specifically, business ethics important because
1. Regulate employee-organizational relationship and boosts employees’ morale.
2. Increased ability to attract new customers.
3. Improved customer loyalty.
4. Reduce risk of negative exposure and public backlash caused by poor ethics
5. Good business ethics attract new stakeholders/Investors.
6. Be contributes to positive impact on the community be are significant for managing a sustainable business mainly because of the serious consequences that can result from made with lack of respect for ethics. Poor ethics are the basis of much litigation that amount to damages.
7. To protect the interest of Business Community and have public trust
8. To protect its commitments to society, keep stakeholders expectations and win public trust
9. To create an environment in which workers can create an environment that is consistent with organizational values
The institution of Business Ethics (IBE), found that companies with clear commitment to ethical conduct have consistently outperformed companies without strong ethical commitments. So ethically sound decisions are initiated from the top and if a company needs to make profits and have good reputation, it must act within the confines of ethically acceptable behaviour.
The organizational culture has a great deal of influence on the moral judgments we make about whether a decision of ethical or not. Generally, business ethics and Corporate Social Responsibility can bring about significant benefits.
Business ethics can attract customers to firm’s products thereby increasing sates.
It makes employees want to stay in business, reduce labour turn over and therefore increase productivity.
Business ethics attract investors and keeps the company’s share price high thereby protecting the business from takeover.
Well managed business ethics is in the best interest of stakeholders, employees, shareowners, employees, suppliers and enable the employees to understand the corporate values of the company who have to work towards the achievement of such values.
Alejandro Russel (2014) in “the Benefits and importance of Ethics in the workplace” reports that a strong ethical culture within a business safeguards assets, as employees who abide by workplace ethics would be able to protect and respect business assets, thereby increasing employees pride and enhances the environment for optimal productivity.
Again, ethics fosters teamwork among employees and helps in aligning the values of your business with those of your workers. This strong sense of alignment is enhanced by strong business ethics and CRS. The manifestations are increased productivity, teamwork and motivation.
Ethics also enhances the public image of the corporation. Public image is public perception about your company. When public perception about your company is strong, customers would develop trust in the employees and the organization.
Business also helps in decision-making including enhancing accountability and transparency when undertaking any business. This is more so during turbulent times when strong business ethics help the company to make changes successfully in organizations.
The golden rule of business ethics is that morality must permeate an organization from the top to bottom and embrace all stakeholders.
In a capitalists system, large profits are always attractive, potentially allowing faster achievement of strategic goals.
Source: Ethics Resource Centre (2011): National Business Ethics Survey: Workplace Ethics in Transition.
The economic that stable profits are better on the long run. The huge corporate collapses at Lehman Brothers (2008), the huge risks and balance sheet holes as Morgan Stanley (2008) and Goldman Sachs has recognized that business ethics and change are indispensable for sustainable model of growth.
Business ethics leads to cost and risk reduction: Just as bribery and corruption are seen as inimical to the development of a healthy economy, so does lack of high ethical standards inimical to trust and loyalty which their detrimental effects on a company. There is a relationship between the perception of ethics and the degree of trust and loyalty present among employees. It logically follows that loyalty and trust have significant value in terms of efficiency and effectiveness. Invariably, a highly ethical operation is likely to spend less on protecting itself against fraud and this is capable of motivating workers and reduces risks associated with business.
Anti-Capitalist Sentiment: All over the world, eye-watering profits of some corporations attract negative sentiments form those outside the world of business and finance. Banks in particular receives lots of bad publicity over profits and executive pay that is usually not justifiable. Economic and financial crisis continue to produce high profits and bonuses even while so many people are redundant. So business ethics and public perception cannot be ignored.
Limited Resources: The planet has limited resources hence people tend to maximize, re-use and recycle materials with notable exceptions; specific environmental and sustainability issues must be guided by issues of good corporate governance. Richard Branson of Virgin Empire takes a keen interest in governmental affairs. Brazil is making efforts at mass producing budgie to ensure the misconception of the devastating effect of greenhouse gas emission.
Emphasis on business ethics is further attributable to the changing needs of people. Business has done well to meet the needs of the economy. There are social expectations as well, which as a matter of morality society expects from these companies. As the ownership and management change, perfect competition is not accurate. Again the actions of business can influence a huge range of issues; employee’s satisfaction, availability of goods and services to customers, the health of the nation and the quality of our environment.
Business Ethics & Challenges in Nigeria
It has been argued that the symbiotic relationship between business ethics and business emerges from a profit-oriented business hence the dictum “GOOD ETHICS RESULTS IN GOOD BUSINESS”. The essence of business ethics is to eliminate corruption, irresponsible behaviour that can bring about industrial disharmony. Business ethics seek to promote good corporate social responsibility practices in order to create an atmosphere of peace, environmentally sustainable way of doing business. In Nigeria, Business ethics faces some daunting challenges. Whereas some of the challenges are environmental, others are manmade. The challenges include but not limited to the following:
1. Lack of Professional Managers: In most organizations, some managers lack the competence and social skills to apply ethical principles to business transactions.
2. Pre-occupation with profit Maximization: Many Nigerian businesses are small in size, with way little financial strength. The large corporations are owned by the multinationals which basic pre-occupation is to make profit. So while the small companies lack the strength to introduce ethics into their business, the multinational corporations have a mandate to post huge profits even though they work in unfriendly, polluted environments.
3. Lack of confidence & Sustainability: Whereas it is true that some businesses for not protect confidential information, because of lack of database, others involved in business ethics do not sustain such practices. Some of them abandoned them midway (Akinyemi, 2002).
4. Reciprocity: Some company officials involve themselves in improper agreements in return for some favour. Such reciprocal breaches lacerate the vision of such organizations. Some breaches of business ethic are caused by conflict of interest and the drive for personal gains.
5. Inability to Apply the Rules: Many employees and employers fail to obey the letter and spirit of laws, regulations and trade agreements. This may be deliberate or a function of lack of competence in supply management. In some case, it is conflict of interest between loyalties versus truth.
6. Employee Commitment. Employees join companies based on a psychological contract. That is, they join based on their beliefs and understanding of what the company stands for. its practices and how it will treat its employees and customers. When employees discover that ethical issues exist, they cope by taking at least one of several actions. Some employees even sabotage company activities when ideally they are supposed to be brand ambassadors. When ethical hazards compromise employee loyalty, the company’s reputation is tainted.
7. Talent Drops. Recruiting new employees becomes difficult. If the word is out, the only employees who will bother are the desperate and less capable.
8. Customer Allegiance. Customers are more cautious today about which companies they want to support. Discovery of unethical practices causes customer retreat. A business with a reputation in the market that is untrustworthy simply cannot last. The result will be that even vendors will disappear because suppliers have the inclination to work with companies they trust.
9. Investor Red Flags. When a company earns a label for unethical practices, investors back out and this affects the growth or sustainability of the corporation. In some cases if a serious ethical breach occurs, activists, regulators and institutional investors step in and take action. This is a costly, painful and risky turnaround challenge. It then becomes difficult to save the credibility of the brand.
10. Productivity is affected: Unethical behaviour affects the productivity of employees. In an ethical corporate culture, employees are more likely to report incidents of wrong-doing to their managers. When an organization recognizes that there is malfeasance that can lead to the drain of resources, such can be nipped in the bud. For example employees may also lie about assets such as expense accounts; stated number of hours they worked and create a further drain on workplace productivity. An unethical business culture, where duplicity and secrecy are commonplace waste becomes a necessary corollary and productivity is affected.
Whenever an employee leaves a company, productivity suffers. The company must then expend time and resources to find a qualified replacement, and the work being performed by the former employee lapses in the interim. According to LRN, more than one-third of all employees quit their job over perceived ethical lapses from the company. Furthermore, 94 percent of those surveyed said that it is extremely important to them that they work for an ethical company. Ethics thus reduce the amount of employee turnover and accompanying lapses in productivity.
Sometimes those who report violations are not protected from retaliation. Unethical practices lead to laissez-faire attitude to employee and socially responsible and ethically sound companies are likely to be less efficient. Another related problem is that some firms refuse to give the requisite training to their members-such training on ethics is very important.
Generally, in an economy characterized by huge unemployment rate, inflation and sharp practices-where dignity and merit have taken a backseat, most managers can hardly insist on business ethics as required by the laws of the land. There is the dilemmas many employees and business owner face tough decision hence fairness and honesty are big issues. Again because if the fluidity of ethics, our individual can make the wrong business decision and consider them as right.
In business ethics the following seven areas are pre-potent:
1. Human Rights
2. Employee Rights
3. Environmental Protection
4. Community Development
5. Supplier Relation
6. Monitoring and
7. Shareholders Rights.
THE 5P SYNDROME IN BUSINESS ETHICS; COMMUNICATION SUCCESS AND MARKETING
Ethical Power: PURPOSE=====PRIDE====PATIENCE====PERSISTENCE===PERSPECTIVE
Business Success: PERSISTENCE===PATIENCE===PLANNING===PHILOSOPHY===PASSION
Effective Communication: PURPOSE==PREPARATION==PLANNING==PRACTICE==PERFORMANCE
Businesses are advised to contribute socially and economically to achieve sustainable development. In doing so, businesses are supposed to respect the rights of those affected by them activities, at least consistent with the host government’s International obligations. Businesses are to encourage local participation including capacity building as part of construction to human capital formation.
Business ethics retire that companies should promote employee awareness of the need to comply with and support good corporate governance. Companies are expected to adhere to regulatory framework related to environmental, health, safety, labour, taxation financial incentives among other issues; and abstain from improper involvement in local politics.
Hicks (1981) say laws are the rules of the games. Social responsibilities of business in Nigeria have started to gain ground both as a doctrine and as an activity. Ejiofor (198) asserted that a lot of business firms do not discharge their duties to society. Every business operates in an environment, and the environment is made up of human beings, some of them are stakeholders while others are clients. When companies discharge functions to cater for these various stakeholders, then CSR can be said to have taken place.
There are four steps in discharging corporate trust responsibility the first steps is social responsibility audit. Here, the business evaluates the external and internal environment. The second stage is attitudes studies. This involves monitoring changes in the attitude of firms, employees, stakeholder’s customer’s opinion of leaders in leaders in society and government concerning social responsibilities. The third is social priority analysis which involves the analysis of social policies that are induced in organizational policies to facilitate its implementation. The final stage is corporate planning which is a formal, logical method of running a business, with a comprehensive and all-embracing method of assessing social responsibility to involve that an organizations social activities are implemented.
CONCLUSION & RECOMMENDATIONS:
Business ethics is good for the public image of a company, which is important to success. Investors usually consider not only the profit but the public image and products of the company. Before some investors consider the Final Investment Decision, they look at the reputation of the company. Business ethics in both public and private circles are essential for Public-Private-Partnership. Businesses can only attract good partners when they maintain a high level of integrity and good practices.
The present administration has re-engineered the structures to encourage business to thrive. The YouWin initiative, the 2013 increase in importation tariff of used cars will not only help to “jumpstart” entrepreneurs but also encourage foreign manufacturers such as Toyota, Peugeot, Nissan to invest in Nigeria. Government is also making massive investment in the power, railway and agriculture to attract investors. Advocacy groups such as Enhancing Nigerian Advocacy for a Batter Business Environment, (ENABLE), the Public-Private Dialogue (PPD), and other business reform initiatives to improve business environment reform. Efforts are being made to revitalize manufacturing, the rail system, road transport, aviation and the health sector to improve service delivery and strengthen the institutions of State.
It is hereby recommended that corporations should hire the right type of employees through background checks, build a culture of transparency and openness of Communication and put in place performance audits to help curb unethical behaviour. Ethical conducts should be rewarded while unethical conducts should be dealt with swiftly and firmly in an impartial manner. There should be created a formal written Company code of ethics and such formal codes should be reviewed, updating and enforcing Company codes. Corporations should appoint an Ombudsman for employees to voice their concerns or report unethical behaviour in a confidential manner. Besides, firms should train and reinforce ethical behaviour in refresher courses so people can WALK THE TALK so leaders can lead by example. Companies that maintain integrity, transparency and accountability can maintain their reputation and ethics to attract investors to grow the economy. Nigeria’s economy can gain back investors trust and garner her lost reputation if is rejuvenated through the adherence to basic ethics.
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The Economic Melt down of the 2008 has given us cause to re-evaluate our endless search for profit. More businessmen have recognized Applied Corporate Governance: People, Planet and Profit http://www.applied-corporate-governance.com .
Idumange is a fellow of eleven professional institutes nationally and internationally