Thursday, January 26, 2012

The Need for Ethics in Business and Media

The underlying principles for business and media ethics are numerous, especially in today's world of Twitter, social media and rapid transmission of messages. With the increased speed of communications, it is becoming critical that communication professionals and business leaders act swift but ethically in situations that arise concerning their business. Boiling it down to specifically ethics, it's important that individuals hold ethics in daily functions, because the reality of matter is that we all interact with other individuals on day-to-day occasions. While it sounds ideal that everyone should have ethics, the problem with this idea is that everyone has differing opinions over what is valued, which sometimes makes it difficult to align values and ethics together. Consequently, every business should have values that align with business ethics.
On a business level, it simply comes down to interaction. The word “business” implies that there is a level of relationship between two parties. In fact, one definition according to the Merriam-Webster dictionary defines business as, “dealings or transactions especially of an economic nature.Therefore, it is imperative that we handle our business dealings in an exact reflection of how we wish to be treated. In the way that we trade, pay, sell or communicate, it is essential that all businesses conduct themselves in such a way that they uphold what is ethical. It is not only a crucial factor in running a good business with investors and other businesses partners but also with consumers. The basic level of function for a business is to create and sell a product, good or service that is useful to the consumer in hopes of achieving a profit. But if this is not conducted with honesty and transparency, earning a profit becomes a struggle. It’s not a matter of if but when the bottom-line suffers.
I’d like to point out a case that recently occurred in 2010. Johnson & Johnson, a company known worldwide for their innovation in medical supplies and medicine, recently experienced an ethical dilemma.  On March 30, 2010 Johnson  & Johnson issued a voluntary recall on some children’s medicine that they found linked to causing illness. The recall, which affected over 40 countries, resulted from a routine plant inspection. Rather than sweep the matter at hand under the rug, Johnson & Johnson took the steps to issue a massive recall, which cost the company millions of dollars. But rather than waiting for the FDA to issue a recall, J&J took the initiative themselves. Although they later faced more inspections and an eventual recall on hip replacements this past year, J&J was transparent. Companies are made of people and people inherently will make mistakes. Consumers are more willing to accept those mistakes and maintain a relationship with the business if they are open, transparent and honest. Although J&J lost money and will continue to lose money this year, those ethics saved the company from a certain destruction of public image.
On the other hand, there is a way not to do things. In the case of Enron, simply stated, they failed on every level to uphold any sort of ethical standard. For anyone that doesn’t know, Enron was an energy company that committed massive accounting fraud and errors, resulting in millions of dollars that were lost by investors. For more info about exactly happened, you can click here but for our purposes, we will just discuss the ethics behind decisions made at the executive level. Enron collapsed because the accounting firm, Arthur Andersen, was pressed by high-level officials of Enron to ignore monstrous accounting errors. Not only did Enron’s top official act unethically but so did Arthur Andersen officials as well. When billions of dollars are placed in the hands of companies by trusting investors, it’s only fair and necessary that the company reciprocate that trust. Enron represents how the effects of business and media ethics are not contained to the company. The collapse of Enron sent a shock wave throughout the business world, leaving hundreds who had invested their life savings without a cent to their name.
            As shown by the two contrasting examples above, the need for ethics in media and business is of the upmost importance in today’s world of rapid communication. People want to interact and do business with companies that are ethical, such as Johnson & Johnson. When people fail to act in an ethical manner, not only is the public image of the company, but also the public itself is hurt. The first rule of public relations is to inform the public and to prevent harm to the public. As public relations practioners, it’s essential that we validate the profession by conducting ourselves in a manner that shows we are a profession of honest, open and hard-working professionals. Business aside, it’s important that in the public relations profession we act as the conscience of the company or client that we work for. By leading the way in ethical decision-making, public relations practioners can build a reputation as trustworthy people that will steer the company in the ethical direction.