Is Baking an Ethical Dilemma - Coursework Example

Banking; An Ethical Dilemma? Name Course Name and Code Instructor’s Name Date Introduction How long a company is likely to last is mainly determined by how ethical the company is. Being ethical means doing the right and the most honest thing, as opposed to faking statements and cheating customers and the government. It means observing what is right and shunning the wrong practices, no matter how profitable or promising they are. If a company is ethical, then it is likely to last for long enough and this makes the basis for its long-term goal setting (Boatright, 232). Otherwise, long terms goals cannot be realized if the foundation is weak. A company that does not have ethical policies and principles is likely to collapse and not stand the test of time. However, this is not to say that ethics are the only determinants of the sustainability of an organization. There are other factors that determine the “shelf life,” or so to say, of a company. These include strategy, assets and resources, employer-employee relationship, human resource, et cetera. However, ethical issues remain to be the number one determinant of how long a company will stand. Ethics will determine how much the company will affect the community around it and its generation (Besley 356). Banking Systems Banking is one of the areas in business that are faced with ethical issues, and banking is at times seen as a practice that is an ethical dilemma. It is almost found impossible to do banking and still maintain a clean record as far as ethics and morals are concerned. Handling huge amounts of money entrusted to you by the public comes with many challenges, and it really causes you to stand up against many ethical issues. It may be surprising to know that 80% of the times which bankers are unethical, they are not so because they intend to or because it is in their blood stream to be unethical; they become unethical without even knowing it, simply because of the camouflage in which ethical problems present themselves (Robbins 134). Because of this, they fail in being credible and holding integrity towards their customers and the government. It therefore takes very conscious and deliberate steps for a banker to be professional even at times when it is very challenging to do so. For banking systems to maintain a high standard of integrity, they have to make deliberate steps to see to it that a clear communication line is kept between the clients and the bank. In addition, ethics should be observed between employees. Some situations that present themselves are very tricky, and they require high quality professionalism and sober mindedness for them to be dealt with properly (Besley 412). However, it can be hard to know the way forward in such situations if there is no written guideline for ethical issues. A company that does nor have these written guidelines usually does not last, because its ethical issues are not dealt with deliberately, but they are left to chance. This makes it very hard to observe high ethical standards especially when the ethical problem involves people in the management (Borden 12). Ethical Issues Is baking an ethical dilemma? This question has remained fully unanswered, and debates about it have never ceased. Banking ethics are usually in the lime light because banks hold very high positions of trust as compared to any other form of organization. It is therefore the main duty for banks to deliberately choose what is right, just and good over what is wrong, unjust and evil (Robbins 223). Show me a bank that is reputable and that has stood the test of time and I will show you a bank that holds ethics with high esteem. This bank will not take bribes to quicken or make possible loan processes to its clients, or give loans to clients they “know” before considering those they do not. The gap between what a bank says or claims to observe and what it actually does is what determines how ethical the bank is (Boatright, 297). Bribery and corruption in the banking systems is the major ethical problem, and it has made banking to be branded an ethical dilemma. This is not a dilemma faced by small banks or those, which are started with evil motives, in the first place; it also faces banks that have been there for decades and banks that are based on high ethical standards. There always comes up situations when it is hard not to cheat or “steal,” and making the wrong choice in such situations always causes losses and spoiling of the reputation of the bank. It is not as easy as it sounds to make the right decision, because rarely does the situation present itself with the white and black side; most of the times, it comes with a grey and a darker or lighter grey situation, making it hard to choose between the right and the more right or less right situation (Borden 24). One of the reasons why banking is usually highly exposed to ethical issues is because of reaching out to the global market. The world has the tendency to try to become one large market, and this is why every other system, just like the banking system, ventures into the global market. The global market cannot be the same as the local; one, and the challenges encountered are much greater, and they come in new shapes (Boatright, 341). When banking systems venture into the global market, more unfamiliar situations are encountered, and ethical standards are shaken. For the bank to still hold its head up high above the sea of bribery and corruption, then it needs to take deliberate steps to know its customers and its market well (Robbins 201). For instance, one of the global markets that come with major ethical challenges is the Russian market. The main reason why this is true is because of the fact that Russia is in the process of being a capitalist government from its previous state, known as the communist state (Besley 647). Most banks have taken advantage of this transition, they have invested in the Russian market, and this is a good strategy for the banks. However, most of these banks, once they have established their foundation, find it hard to continue assisting in this transition of the Russian economy. They are mixed up in the thin line between what is right and what is wrong (or less right) and their vision is impaired. When such cases present themselves to the banking systems, what should they do to maintain ethical standards? Well, this is another hard question that has no specific answer. However, ethics should be observed as much as possible. For instance, a bank should not handle the out flowing Russian funds whose source is not accounted for. The bank may be benefiting a great deal financially from such deals, but the fact remains that it is highly unethical to do so. The bank has to trace the source of the money to be sure that it is genuine. However, this is unfortunately not the case with most banks; they melt at the sight of huge profits that accrue to such transactions, and they put ethics aside and go ahead with the dealings (Boatright, 534). Actually, a bank that bothers with where the money is coming from is regarded as very old fashioned and naïve in the banking business. Such banks also face great opposition even politically, because most governments are not ethical. However, this is not to solely say that facilitating the flowing out of such cash is purely unethical, and this is where the different shades of grey present them. Is such facilitation classified under filtration of money or under capital flight (Boatright 536)? An ethical dilemma presents itself right there, and it becomes hard again to determine whether or not banking is an ethical dilemma. Can you do banking and be ethical? Are Banks Forbidden from Innovation for the Sake of Ethics? For any business to remain strong and to achieve its long-term goals, innovation is not a choice, but it is compulsory. Banks, too, must have innovative strategies for it to continue being in business. However, most of the times, innovation comes with huge ethical challenges (Borden 31). For instance, ethical challenges present themselves when a bank wants to get into a joint venture with a certain organization. The main aim is usually very sincere and straight forward - to expand the bank, to make it more stable and profitable and to make it more of a service to the society. However, ethical issues arise, especially when the other party with which the bank has chosen to join has ethical and moral issues at hand (Robbins 342). For instance, if the other person or organization is based more on politics or has other issues with its moral reputation, than the bank is also faced with ethical dilemmas to face. In the eyes of the public, such a bank is of questionable repute and it is placed on the same ground as the organization it has joined with. If the bank does not withdraw from such joint ventures, it stands the risk of losing its customers while if it withdraws; it stands the risk of not realizing its dreams, and hence stagnating (Lynch 154). More Ethical Issues Apart from such questionable business relationships, other ethical issues still present themselves. Media is one of those. The media is gaining more and more power by the day, and the public trusts the media more than they trust their bank. Therefore, banks have to be extra cautious when dealing with anything that can cause it to be on the media spotlight for all the wrong reasons. For instance, a bank risks its ethical image if, though in good faith, it supports a certain organization, which is considered not to be friendly to the society. For instance, the bank cannot support a polythene manufacturing industry or that whose operations put the environment at a risk of degradation (Borden 57). In addition, it cannot dare be in association or even be mentioned anywhere near an organization whose morals are questionable. For instance, it cannot associate in any way with an organization or a known individual who is associated with being gay or supporting gay relationships. However, the culture of the place of its operation also determines the standards of ethical and moral issues (Lynch 233). Generally, banking faces ethical dilemmas because they need to know what to do, how to do it, when and where to do it and with whom to do it without negatively affecting its immediate society and the global society as well. This calls for awareness by the banks of the sphere of influence and control in which they operate, and they need to leave room for the change or shifting of such spheres. This means that a bank can easily be termed as unethical when a certain regulation is changed even when it was unethical at the time of establishment of the action (Boatright, 560). In addition, in whatever the bank does, it needs to be careful not to get into any situations that are somewhat neutral, which have no clearly defined set of rules. This is to avoid gambling on two sides of the coin, where a head or tail situation has equal chances of happening. Therefore, the bank should also be careful to observe any regulations that are shifting or are likely to shift, and therefore align itself to the new likely shape of a regulation or policy. No bank should get into anything that does not have a clear line that defines the right and the wrong, the white and the black (Robbins 440). Diversification or No Diversification? Most banks fall because of the low possibility of dealing with ethical issues mainly because of the fact that most businesses are no longer tied to the local game but to the international or global one. Banks are not left out in this diversification process, and they end up venturing into more than one line of operation. For instance, most banks are no longer confined to banking, but they are into the insurance policy business and into consultancy (Lynch 243). This makes them more exposed and vulnerable to the risks of such ventures, and conflicts of interest arise. One of the instances where such conflicts of interest occurred is in the UK banking systems. Most of these banks got into insurance and retirement benefit schemes. Upon venturing into this, most of them started advising clients to move from the standard occupation pension schemes to more personalized schemes for them and their families (Besley 701). The trusting clients did so, but they ended up getting into a mess that would have been avoided totally had they remained in the all time pension scheme. Therefore, these banks were pointed fingers at, and their morals and ethics were questioned. This is because they were accused of not giving sound advice and not carrying out adequate research on the venture before dragging their clients into this. They were also accused of hiding some details from unsuspecting clients about the pros and cons of switching from the occupational pension mode to the personalized schemes. Therefore, the government came to the rescue for the clients and these banks were forced to dig deep into their pockets to make compensations to the clients ho had suffered the impact of this switch. All these banks spoilt their reputation, and they lost clients to a point where some of them closed down totally (Besley 734). Therefore, banks are at a higher risk when they get into insurance business that when they do not. Yet, it is almost impossible, today, for a bank to concentrate solely on banking without insurance, because most customers are looking for the whole package. Conclusion Banks have gotten to a point where they are choosy on even customers and they choose whom to give what services. The level at which these servicers given has also changed. The rate at which new branches of the banks are being opened has dwindled over time, and lesser branches are being launched. Banks have also ventured into reducing subsidization services across different organizations, and they have become more attentive and sensitive. This is to avoid being branded as insensitive when the bank takes its services to a certain community in which there are sections that have neglected their social roles or sections that are disadvantaged in any way. When this is the case, most banks will be accused of being unfair and insensitive to those disadvantaged economically, socially, physically or otherwise. Banks have also gotten into consumer education, where they try their best to get the customer to understand all about the bank charges (Koslowski 238). It has not yet been established whether banking is an ethical issue; can banking be done and ethics observed fully at the same time. Works Cited Besley, Scott, and Brigham, Eugene. Principles of Finance. New York: Cengage Learning, 2008. Boatright, John. Finance Ethics: Critical Issues in Theory and Practice. New York: John Wiley and Sons, 2010. Borden, Walter. Banking and Business Ethics. Memphis: General Books LLC, 2010. Koslowski, Peter. The Ethics of Banking: Conclusions from the Financial Crisis. New York: Springer, 2011. Lynch, James. Banking and Finance: Managing the Moral Dimension. Cambridge: Woodhead Publishing, 2009. Robbins, Stephen. Organizational Behavior: Global and Southern African Perspectives. Durban: Pearson South Africa, 2009. Read More