Evolution of Business Ethics – OMM 640

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Summarize the development of business ethics over the past several decades, including the rise of social issues in business.
Describe the major changes and events that gave rise to the present focus on business ethics.
Provide examples of how these changes impact current business philosophies and reporting practices.

A Summary of The Development of Business Ethics Over the Past Several Decades

The field of business ethics has undergone major growth throughout time, tracking the evolving landscape of corporate obligations, liability, and societal influence. The history of business ethics is clearly demonstrated in courses like OMM 640 “Evolution of Business Ethics.” This course seeks to equip students with a thorough comprehension of the historical progression of ethical concepts in business and their current practicality.

In recent decades, the evolution of business ethics has been characterized by notable changes in corporate cultures and public demands. The modern period of business ethics commenced in the early 1960s-1970s, marked by a growing general concern and awareness over corporate social responsibility (CSR) and questions of ethics. During this era, there was a surge in consumer activism and campaigns for sustainability, resulting in an intensified review of business operations (Latapí Agudelo et al., 2019). Next, we entered the period of the 1980s-1990s, during which there was a renewed emphasis on corporate governance and accountability. This was prompted by high-profile scandals involving corporations such as Enron and WorldCom. As a result, measures such as the Sarbanes-Oxley Act were introduced in the United States to enhance accountability and openness in corporate governance (Latapí Agudelo et al., 2019). In the early 2000s, there was an increasing focus on environmentalism and corporate citizenship. Businesses have started to acknowledge the significance of addressing environmental and social concerns in their operations, not just for ethical purposes but also for the sake of ensuring long-term financial viability.

The advent of the 2010s saw the emergence of social media and internet access, which led to a greater exposure of business conduct. Companies experienced increased pressure to tackle concerns such as inclusion and diversity, rights of humanity, and ethical supply chain procedures (De George, 2019). Stakeholders, comprising customers, investors, and employees, expressed a strong need for increased transparency and accountability. During the 2020s, business ethics is undergoing a transformation in order to address persistent societal issues such as global warming, income disparity, and structural racism (De George, 2019). There is a growing expectation for companies to include ethical considerations into every area of their operations, including decision-making processes and involvement with stakeholders.

The Major Changes and Events That Gave Rise to The Present Focus on Business Ethics

The current emphasis on corporate ethics has been influenced by various significant changes and events in recent decades. These changes entail the corporate scandals. Notable corporate scandals, like WorldCom, Enron, and Lehman Brothers, revealed extensive unethical activity and financial crimes within organizations. These incidents resulted in widespread public anger, erosion of investor confidence, and demands for increased openness and responsibility in business operations (Ginsberg, 2017). Globalization has also instigated notable changes. The growing dependence of global economies and companies has led to increased scrutiny of corporate conduct. The process of globalization has facilitated the ability of buyers, activists, and investors to discover and address unethical behaviors, regardless of their geographical location.

Technological progress is an additional component that has led to significant changes. The emergence of online tools and social media channels has enabled stakeholders to circulate information and enforce accountability on corporations instantly. Companies are currently facing the challenge of effectively maintaining their reputations in an environment were information spreads quickly and broadly. The increasing awareness and concern for social issues have also served as a catalyst for revolution (De George, 2023). There is a growing awareness and fear regarding social and environmental problems, including climate change, wealth disparity, and violations of human rights. Consumers, employees, and investors are continuously insisting that firms tackle these concerns and function in a socially responsible manner. The corporate sector has experienced substantial ethical changes as a result of regulatory developments. Authorities and regulatory agencies have reacted to business crises and public pressure by enforcing more stringent laws and reporting obligations. An instance of this is the implementation of the Sarbanes-Oxley Act in the United States, which imposed regulations on corporate governance and financial reporting in order to improve transparency and accountability.

Examples Of How These Changes Impact Current Business Philosophies and Reporting Practices

The changes mentioned above have had a major impact on present-day company ideologies and methods of capturing information, such as the increased focus on Corporate Social Responsibility (CSR). Numerous organizations currently highlight CSR programs to showcase their dedication to ethical and sustainable practices. CSR programs involve a diverse array of initiatives, such as promoting environmental sustainability, engaging with the community, and managing supply chains with ethical standards. Furthermore, these changes have resulted in the incorporation of ethical factors into the process of making decisions. Companies are actively incorporating ethical issues into their decision-making methods (De George, 2023). This entails assessing the societal, ecological, and moral consequences of company choices in addition to financial factors. These reforms have also resulted in improved transparency and reporting.

Corporate reporting now has a stronger focus on openness, as corporations are offering more comprehensive information regarding their ethical and sustainability activities. This encompasses the dissemination of sustainability reports, the performance of third-party audits, and the active involvement of stakeholders in order to address any problems. Additionally, changes have resulted in Stakeholder Engagement. Businesses are voluntarily interacting with more kinds of stakeholders, including consumers, employees, investors, and communities, in order to gain insight into their expectations and concerns (De George, 2023). The debate facilitates the identification and proactive resolution of ethical concerns within corporations.

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