Religious Beliefs and Business Ethics

ReligiousBeliefs and Business Ethics

ReligiousBeliefs and Business Ethics

Arecently retired evangelical Christian corporate chief executiveofficer, a few years ago left an ethics class in a certain businessschool in a near revolt since he advocated a response to a certainhypothetical drug testing policy basing it on the Biblical phrase of“love your neighbor”. This evangelical Christian business personhad given an impromptu, impressive recitations on a number ofBiblical verses to show the reason why he, as a genuine Christian,should care a lot for his employees and in doing so, should execute adrug testing policy that was identical to the one students hadearlier separated on the basis of balancing individual rightsconcerns against the rights of the business.

Inspite of the professor’s distinguished position, the students ontheir position whom they represent all the major religions across theworld, termed him a “bigot”, a person that had “forced religiondown their throats” (Moon, 2001). The students in this case are notalone in this kind of reaction. A lot of people believe thatChristianity and overall religious convictions do not have anyappropriate role in business decision-making (Audi, 2009). Yet,religious beliefs, whether or not it should play a role in businessethics, is an important question. Is religious-belief-motivateddecision making an opportunity for discrimination and exploitation?Or is it a genuine and legitimate means of making sure that abusiness is carried out in ways that put into considerationconsequences of religious leniency? Business ethics on the otherhand, is one of the most talked about topics in the past few decades,and is one of the most conflicting issues. Unfortunately, people donot see any relationship between ethics and religion, but they see ithas a habit acquired from family upbringing, culture, and society(Arnold et al., 2013).

Religiosityand Business Ethics

Wilson(1997), in their research findings to explore the relationshipsbetween religion and business ethics, realized that some scholars’debate whether religious beliefs should be an appropriate basementfor business ethics. From their literature review, they found otherresearchers debating on several assumptions such as: “morality andreligion are synonymous” business ethics has neglected recentlyits religious traditions rather than including religious beliefs frombusiness ethics since it ought to consider religion to be a healthyground. Again, religions make valuable contribution to businessethics and religious principles, values, and practices that provide asense of responsibility and guidance to the people of global business(Moon, 2001). Audi (2009) believes that religion impact on a person’seconomic and social life remains a historical debate. He found outthat some of the scholars had paid closer attention on the subject ofreligiosity and business ethics and aimed at exploring therelationship between business ethics and religious beliefs.

Importancesof Ethical Business Decisions

Business-orientedpeople and companies that wish to improve and thrive in future haveto develop sound ethical decision-making attributes. People andcompanies that behave in a socially acceptable manner tend to likelyenjoy ultimate success more than those whose actions are solelymotivated by profits. It is therefore important to know thedifference between right and wrong, and also be well aware of what isthe right thing to do in ethical decision-making foundation. In mostcase, according to Corrigan (2002), making the right decision oftenleads to greatest social, financial, and personal rewards in the longterm. According to Bowie and Scheneider (2011), there are fourethical principles that the researcher uses to analyze the effects ofdecision-making techniques. They are:

  • Utilitarian rule: It involves the process of ethical-making decisions that offers most good for a large number of people.

  • Justice Rule: This involves a decision that distributes harm and benefits among the people in an equitable, fair, and impartial way.

  • Moral Right Rule: This refers to a decision that best protects and maintains fundamental and inalienable privileges and rights of the people that are affected by it.

  • Practical Rule: This is an ethical decision that a manger in a firm as no intentions of communicating it to the people outside the firm since the typical person in the society could regard it has acceptable. It is important to consider when faced with ethical dilemmas the outcomes of the process of decision-making.

Luetge(2013) noted that one way to deal with ethical dilemmas in a businessis applying “the four way test” to evaluate a number of decisionsin the company. The “four way test” involves asking these fourquestions: (1) Is this decision a truthful one? (2) Is this decisionfair to everybody involved? (3) Will it result to goodwill for theorganization? (4) Is this decision beneficial to all the partiesinvolved that have shown interest on the outcome? When these fourquestions are genuinely and truthfully answered with a “yes”,then the decision made is probably an ethical one. Hasanuzzaman(2003) also proposes another method of ensuring decisions made istruly ethical. In his study, he proposes a publicity test whereby oneshould ask oneself: How will I feel if my actions are published in myregions newspaper? The rationale behind such a procedure is that whenone is comfortable in having his or her parents, members of thecommunity, and other people found out what he or she has done, thereis a chance that the aforementioned decision is an ethical one. Ifone for instance does not want all these individuals to learn to beaware of his or her actions, chances are the person will have torethink his or her decision (Moon, 2001). Also, Weinen (1997)believes that the only way to approach business ethics decision isfrom stockholders and shareholder’s perspective.

FactorsThat Impact Business Ethics

Factorssuch as gender, cultural values, age, and in addition those that arebusiness related may directly or indirectly impact on businessethics. From the gender, while Zsolnai (2004) believe that men aremore likely to consider rights, rules, and fairness, women on theother hand are more likely to be concerned with compassion, care, andrelationships. This may be considered to be as a result of gendersocialization during early childhood. Gensler (2013) noted thatgirls’ traditional games involved indirect competition while withtraditional boys it was more of complexity and rigid rules thatinvolved competing against each other within the parameter.

Murthy(2009) in regard to age found out that age was an important predictorof business ethics. He reported that older people have higher ethicalbeliefs than younger people and that they are less likely to easilybe influenced by people around them at home or at work. He also foundout that ethical attitudes develop at different rates and aparticular gender and that it the differences tend to diminish as ageincreases. From business perspective, managers that want theiremployees to act in a manner that is ethical and they must exhibitethical decision-making practices. The manager himself or herself isin a better position to establish ethical tone of the company. Ifthey behave in a certain manner or as if the main thing that mattersis profits, the employees will most likely to behave in the samemanner. The managers of the company play a vital role in creation ofa working environment whereby employees are rewarded and encouragedfor acting in an ethical manner (Hay &amp Kreider, 2001). EthicalDecision-Making Process After definition and factors that impact onethical decision-making process, it is easy to dissect this process,analyze some of the elements, and identify points that affect theelements. Moon (2001) contends that on a more comprehensive level,the process of ethical decision-making entails a set of guidelinesthat accepts ideas on proper conduct in the workplace. In order tounderstand and practice ethical decision-making, there are threestages or steps that are involved in this process namely moralintention, moral recognition, and moral evaluation.

  1. Moral Recognition

Toattain this recognition, a person needs to follow three steps,namely: (1) Individuals are required to identify certain that involvea moral issue, (2) Individuals are required to perceive or interpretsituations with regard to the size of consequences, (3) Individualsare also required to identify that moral recognition is determined byweight and intensity of morals that influences decisions.

  1. Moral Evaluation

Afterrecognition of situations which involved ethical issues, the secondstep in this process involves evaluating inherent consequences ofevery possible course of action depending on the background of aperson for example socioeconomic, educational, and cultural, whichact as a background for influencing judgment of morally uprightcourse of action (Audi, 2009).

  1. Moral Intention and Action

Accordingto Hasanuzzaman (2003), moral intention is the priority put on moralvalues over other personal values. In this face, individuals chooseand pick ethical values that will eventually determine their courseof action. It has been indicated by extensive research that the levelof moral behavior is much higher in situations where unethicalbehavior consequences have greater magnitude. During the process ofdecision-making, intentions and behavior of the individual are guidedby what is what is regarded as morally right. From his presentationon business ethics, Hay and Kreider (2001) defined ethical process ofdecision-making as a process with four stages namely (1) Definitionof ethical situation, (2) Identification of decision makercharacteristics, (3) Recognizing significant influences on ethicalsituation, and (4) identification of outcome.

Religionand Business Ethics in Religion

Corrigan(2002) extensively researched a literature review on CSR (CorporateSocial Responsibility) and business ethics whereby CSR is a conceptthat incorporates similar ideas like “corporate accountability,corporate sustainable development, corporate sustainability,corporate citizenship, and corporate ethics”. He learnt thatorganized religion is a key factor in figuring out stakeholders’attitudes and behavior in regard to business ethics, and that someresearch explores both the impact of religion on managerial decisionmaking and the relationship between ethical values and religion, andthe notion that religious people have a wide CSR notion than that ofnon-religious people.

Again,the aforementioned researchers also realized that the researchedfocused solely on the Christian tradition and is also explicitlylinked to the biblical writings to the way such faiths createsexpectations on how business should be carried out. Moreover, Murthy(2009) contends that Christian teachings on business ethics are drawnon four major texts. The primary sources are the Quran and the Bible.Specifically, the Quran is considered a verbatim word that meansAllah as it was revealed to the Prophet Mohammad. The other twosources are Religious scholars’ consensus and the analyticaldeduction method by analogy. This method is used to provide guidanceon emerging situations that are based on issues that are similar andare dealt majorly by both the Quran and the Bible. From the religionperspective, religious people have to adhere to ethical standards,not only in the business world but in all other aspects of life. Bothethics and business are related.

Accordingto Gensler (2013), the aims of the religious systems of business thatput in place are not primarily regarded as materialistic but they arebased on the concepts of individuals’ well-being and overallachievement of good life. It also emphasizes on community values suchas socio-economic outcomes and a balance between the spiritual andmaterialistic needs of religious followers. The ethical basis ofreligious business gives a clear cut framework whereby firms operatefrom. Their supposed transactions should only include products thatare considered permissible or lawful, and also avoid any illegaltransactions such as any trade that involves injustice, cheating,charging exorbitant profits, or promotion of something that isunacceptable (Beer &amp Business Expert Press, 2011). Businesses andtransactions that involve market manipulation, interests, usury orelements of risk and speculation are disallowed. All transactionsinvolving business should be clear with a transparent ethicalframework, which is solidified in religious holy books such as theQuran and the Bible. In Islam for example, basing it on Quran, thereis a principle that states that “it is not acceptable to sell anarticle without first making it clear, nor is it acceptable to forany person that is aware of its shortcomings to refrain from makingit clear” (Zsolnai, 2004 ). As a result, a number of religiousdenominations are required to apply high standards at all times andalso to reveal a clear standard that had been used to supply aparticular product or service.

  1. Punishing Unethical Behavior

Wilson(1997) identified that the worship concepts through action and lackof separation between private and public ethics means that areligious for example the Muslims should avoid illegal activities inharam (Islam). It means that Muslims have to be more proactive inpunishing such business that takes part in unethical behavior evenwhen there is a strong beneficial terms. Muslims for example shouldchoose halal products for example if the price is much higher or whenthe investment returns appears lower.

  1. Legal Interpretations

Inmore secular societies, legal interpretations are based oncontemporary and more often based transient standards and values inMuslim society for example, these standards and values are guided bythe sherialaws and by gathering previous judgments as figh.

  1. Organizational factors

Certaincompanies or organizations can influence and affect participants’behavior. One among the key sources of a company’s influence is thedegree of loyalty or commitment of its leader to ethical conducts.This loyalty can be communicated through ethical codes, speeches,publications, and policy statements (Arnold et al., 2013). Every day,ethical codes of conduct gains popularity in many firms and moreoften vary from one industry to the next. As much as such codes mayimprove ethical behaviors among participants in organizations, theiruse may sometimes appear inappropriate. There are organizations thattrade in or sell alcoholic drinks or illegal (haram) services orproducts thus, implies that that conduct of all the organizationappears unethical. Development and enforcement of code of ethics inthis kind of firms is clearly erroneous. Organizations, accordingly,engage in lawful businesses that can foster ethical behaviors throughdevelopment of religious code of ethics. Organization’s codes ofconduct, that is, it should be engagement in it influence not onpeople alone but on all the transactions in the organizations aswell. In addition, individual factors influence individuals in thatthey come to work with varied values. Such factors that impacts onone’s ethical behavior include personal and moral values, moraldevelopment, life experiences, and peer influences (Wienen, 1997).

  1. Personality and Personal Values

Aperson’s morals and values will influence his or her ethicalvalues. An individual who emphasizes on honesty will have act verydifferently from another person who ignores other people’sproperty. Again, a key personality variable that may affect ethicalbehavior of a person is his or her locus of control. This locuscontrol of a person affect the degree to which he or she perceive hisor her behavior has influences his or her life. According to Bowieand Schneider (2011), a person has a locus of control from within ifhe or she is able to control the events in his or her life. Fromthis, people with locus of control from within are more likely totake responsibility for their behavioral outcomes. Conversely, aperson with external locus of control believes that luck or fate orother people are the cause of him or her to behave unethically orethically. Overall, locus from within are more likely than locus fromexternal in order to make ethical decisions, are less obliging tocave into pressure to act unethically, and will not engage in hurtingothers even when they are demanded to act so by a superior.

  1. Family influences

Peoplebegin forming ethical standards as children. Children are likely toestablish high standards of ethics if they study other members of thefamily adhering to high standards and whether they are rewarded forethical behaviors but punished for being dishonest or steal. Mixedreactions from parents are likely to end up in unethical behavior ofthe child’s part. An example of this is the child that is told thatstealing is bad, while at the same time, is offered supplies that isborrowed from the parents’ office at the work place. BusinessEthics in Religions Beliefs

Accordingto Pauchant (2002), the ever expanding principles of religion setsthe operation framework from each aspect of the way business shouldbe conducted within the world or expanding religion. While itacceptable that behavior in Westernized conventional business is setby laws, corporate governance rules, and regulations, business underthe wings of religion is often governed by divine principles thatrules such values as quality, fairness, and morality, which datesback to over a thousand years ago. For example, Islamic financeadopts and encourages a long-term partnership approach betweenbusinesses that are often based on the investors essentially owningequity stake in the business. Shariah(Islamic law) for example, outlaws charging of any kind of intereststhat is in a wider context, is the use of money to create interest,which is unacceptable. Speculations of any form are also forbidden,that is, investments are needed to deliver social benefits into thecommunity. Islam in this case forbids activities that are carried outin prohibited areas for example alcohol or gambling, by specifyingthat Shariahlaws compliant business should concentrate on legitimate and legaltrade-based activities (Moon, 2001).

Importanceof Religious Beliefs to Ethics in Business

TheMechanism through which religious beliefs works to trigger ethicalaction and sensitivity is through expectations through religiousroles that have since been internalized as a self-identity inreligion. Religious moral teachings are circumscribed by certainattitudes and actions therefore acts to establish ethical behaviorroles that is adherent to that religion (Audi, 2009). These rolesexpectations when internalized by repeated social interaction, helpsto contribute to a person’s adherent to a specific religion. Thisreligious role expectations influence is by far moderated throughreligious identity salience and motivational orientation. Individualsmay differ in the vital instances that are ascribed to theirreligious identity, which is the centrality of religious affiliationto their self-identity.

Individualswhose religious identity is extremely important may tend to gothrough a hard emotional discomfort if at all they leave from ethicalteachings of their religious affiliation and are likely to sufferdiscomfort, emotionally. Basing it on religious motivations, thesesituation have been described that people with intrinsic religiousaffiliation view their own religion from a central perspective totheir existence and tries to live out its impacts in all the areas oftheir lives even though adherence to their religion cay incur costs(Luetge, 2013). On the other hand, individuals with extrinsicreligious affiliation tend to view it in terms of its importance ofgiving status, making social contacts, and providing solace andsecurity.

Alternatively,religious participation may also be available to the individuals withextrinsic affiliation for attainment of benefits that are associatedwith religion. In conclusion, while there is evidence of a widevarieties of religious experience, the differences in the levels ofreligious loyalty, and other various motivations that adheres to areligion, both empirical and theoretical work indicates thatreligious beliefs are essential determinant of ethical attitudes inbusiness. There is strong evidence that it is importance of religionin the life of a person’s life that is much more than a significantimpact on ethical issues in business.


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