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Explain Meaning Of Ethics In A Business Context Accounting Essay

Paper Type: Free Essay Subject: Accounting
Wordcount: 3091 words Published: 1st Jan 2015

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It’s simply says that ethics are the attitude of individuals or groups in deciding the wrong and right decisions with ethical or polite behaviour. The term ”Business ethics” has a same meanings that I discussed in ethics introduction. On very basic terminology ”Business Ethics” defines as follows:

”Business ethics boils down to know the difference between right and wrong, also selecting to what is right in any particular decision” (Mary Gormandy white)

It is best short explanation given about the business ethics in the above definition. Basically it shows the within the organisation management tries to find the favourable and unfavourable actions that are happening in the business and choose the best right action with very honourable and polite behaviour in the organisation. Therefore the particular concept of ”Business Ethics” is very important for the Starbucks because Starbucks is a multi-national company. Therefore the behaviour of the Starbucks management towards the implementing the short-term and long-term plans from higher level management to middle and lower level management very respectable and polite manners.

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Generally the meaning of ethics are the moral behaviour towards the other people and also decide between the right and wrong then the main part of ethics is that selection of right decision with very sensible and honourable manners. Business ethics are the same concept that the goodwill of the business depends upon the customer’s satisfaction. If business have a separate customer service department and it provides immediate services to the customers then it gain the customers trust this way of providing services can build the name of the business.

”Business ethics prescribes the action of individuals in the organisation. It also suggests the kind of behaviour that the organisation as a whole gives emphasis to. It is most clearly expressed in the written or unwritten values and codes of principles that a company adopts” (Article from www.articlebase.com)

This above article showing the ethics of a business. If we apply the whole concept into the Starbucks then we realise that each stakeholder of Starbucks must be contributed its share towards the ethics of the business and when we discussed a Starbucks as whole then it is the responsibility of the higher level management to show ethical behaviour. Budget, plans and different strategies are made by the higher level management of Starbucks and after the preparation of each strategy or plan its next process is implementation of these plans or strategies and this is the the stage where we find the ethical behaviour of the Starbucks. Is Starbucks higher level management properly or softly communicate with their middle and lower management.


As a basic concept of the ”ethical consideration” explain through the following summary:

”Primary research involves collecting data about a given subject from the deal world. This section includes information’s or what primary research is, how to get started, ethics involved with primary research and different types of research you can do. It includes details about interviews, surveys, observations, questionnaires, and analysis”.

(Dana Lynn Driscoll, Allen Brizee)

According to the above paragraph any multi-national company collect basic information from the real ground situation. And then on the basic available primary information’s company can change or improve its deficiencies Starbucks also conduct the feedback session from the general public, for this Starbucks must conduct interviews, surveys, observations and analysis. When Starbucks collect all the information’s through above resources then the next step is select the best suggestions

From the available data. And then implementations on these suggestions. When we find the cost of business ethics of Starbucks then we realise that ethical cost may be very harmful for the projects of the organisations.

“Most discussion on ethics of business describes that are constraints on profits”.


It is very different for any company that followed the prescribed principals because when the principals of ethics are defined their assmmemes that the organisation fulfils the set standard but in practical, the organisation faces the difficulties in fulfilment of the principals. “It is obvious that a lot of people choose profits over principals”.

Albert A.Anderson (Professor at Badson College in Wellesley, Massachusetts)

It is normal behaviour of any person to select the option that is beneficial for its business or himself usually the main aim of the business to earn profits in any conditions .But according to my opinion is that the ethics of business is very important for the Starbucks because its ethics principles are the base of goodwill of the Starbucks. Therefore Starbucks should followed its ethics principles for its following the business. Do not compromise on the issues that affect the Starbucks goodwill. After explaining the concept of ethics of business in Starbucks, now it is most important thing is that who take the responsibility of implementing those ethics properly. In recent times Starbucks s showing a great ethics of business and according to Jamais Cascio articles (year 2005) the ranking of Starbucks in 100 companies is number 42.The Starbucks as a whole responsible for implementing the business ethics. But when consider the main responsibility of Starbucks basically it is responsible for two things, on is social responsible and second responsibility towards the development of the organisation. Here is the model available for a corporate social responsible, this model provide us the basic idea of the way that leads the Starbucks towards the best ethics as practically.


According to this model there are 5 prepositions are model

Social responsibility arises from social power.

Business shall operate as on open system with open receipt of inputs from society open disclosure of its operations to the public.

The social cost and benefits of an activity, product or service shall be thoroughly calculated and considered in deciding whether to proceed with it.

Social costs related to each activity, product or services shall be passed on to the consumer.

Business institutions, as citizens, have the responsibility to become that are outside certain social problems that are outside their normal areas of operation

(Keith Davis, www.enotes.com)

If we applied this model in Starbucks then Starbucks must followed the given propositions. Starbucks social responsibility arises when Starbucks has power to contribute in social environment. It means that Starbucks has social powers and utilizing those power Starbucks provide benefits to the society and the organisation as whole. It is like that someone has power to something therefore he/she is responsible for that powers. Starbucks take proposition if it follows that model, Starbucks showed be working in open system. It means the Starbucks very easy for any society for communicate and suggestions. Then Starbucks very fair in explaining its operation to the public. This fairness of Starbucks shows its ethical business behaviour in favour of general public and different societies third proposition followed by the Starbucks regarding the costs and benefit that are attached to an activity, products or services are accordingly calculated and then use the calculated in the selection of particular decision. Fourth proposition related to the social costs of each activity, product or services of Starbucks. Starbucks must transfer the social cost to consumer because it shows the genius of the Starbucks business ethics. Fifth proposition of this model is very essential for the Starbucks. I think that the responsibility on Starbucks interact in the other social problems that are outside the Starbucks normal daily operations. It is the Starbucks moral or ethics responsibility that Starbucks voluntarily participate in the other social activities that are beyond the normal working of the Starbucks. And Starbucks should be involved in the solution of any problem arises outside the organisation. This act of Starbucks leaves a positive impact on the minds of generals public as well as societies as whole.


Before explaining the concept of relationship between ethics and corporate governance. It is very essential to understand the concept of corporate governance.


Basically the concept of corporate governance deepness on the two words one is “corporate” and seconds the “governance”. The meaning of “corporate” is a running entity like Starbucks is a running business entity and each entity has various types of Starbucks. It is the responsibility on the entity of the that made decisions in the interest of the Starbucks. Therefore the competition of Starbucks interest purpose entity higher a best governing body inside the organisations. Normally the meaning of governance is to make check on any particular task. But when explain the meaning of corporate governance. We have basically two school of thoughts are available defining the concepts of corporate governance.

Traditional definition

Modern definition


“Corporate governance is the way in which a firm safeguards the interest of it financiers (investors, lenders and creditors).


“It is the framework of rules and practices by which a board of directors ensures accountability fairness and transparency in the firm’s relationship with its stakeholder (financier’s customers, management, employees, government and the community). (www.businessdictionry.com)

Any multinational company followed the concept of corporate governance and in that instance, company adopt a y above definition the major traditional and modern concept is that difference between traditional definitions only provides security to its finance provider. ( E.g. investors, leaders and creditors ) because the main interest in the company is the finance of that company. But modern definition provides a set framework of rules and practice through these rules board of directors are accountable for any actions that they already performed. And also show their fairness, transparency in the firm’s relationship with all its stakeholders. But as the relationship between ethics and corporate governance in the Stakeholders company has very importance. There is a very strong binding between ethics and corporate governance because if the people who governance the Starbucks they must beware ethically it means that suppose a manager of one Starbucks coffee shop behave unethically with their employees and operate the branch unfairly then as a results Starbucks particular branch faces losses due to the one governing person (manager )therefore it is very essential for the progress or expanding of Starbucks that its corporate governing body perform and behave ethically. Therefore we can say that ethical l behaviour is very essential for the Starbucks corporate governing body.


To monitor stareges and plans all the companies have plans for its current and future period. Plans and targets are both short term and long terms. And all the though this system a control system though this we control the difference arises between plan and actuals.


This system provides the whole process of budging and then its control mechanisms. In this process seven steps are included.

Step1: Identify objectives.

Step2: Identify potential strategies.

Step3: Evaluate strategies.

Step4: Choose alternative course of action.

Step5: Implement the long term plan.

Step6: Measure actual result and company with.

Step7: Respond to divergences from the plan.

(ACCA F5, BPP Learning media)

In a particular company Starbucks, if explain the above seven steps. Then we find the meaning of the each step. The first step shows the and identify the objectives of Starbucks and when we find the best objectives the next step find the best available strategies for the objectives completion. In this stage we find the best strategies using the swot and pest analysis. The next step taken that to measure the collected strategies. And from this stage select the best strategy for the implementing the plan. When we find the stareges then the next step is selections of different ways of action that are used to implement the chosen strategy. Next step is to implement the plan here the first five steps are completed and these five stages are called the planning stage. After the planning stage we moved forward to the next stage, in this stage Starbucks compare its actual results with planning. And in this stage find the variances between actual and planned information. This is basically the first control process. Because control is possible when collect the difference arises on the actual and budgeted data. The next step of control process is that reports the variance and minimise the difference between actual and budgeted.

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Any type of business have some future planning for expanding its business therefore owner of the business try to set a some future plans. When he set the future targets then he start working on it and try to meet the desired targets. After the end of its set time period then he compare the actual performance of the business with set targets and he realise the some differences between actual and plans. These differences called the variances. On the same way multi-national organisations set its plans. There are two basic plans are used one for short term plan and second for long term plan.

Standards are set for short term plans

Budgets are set for long term plans

Forecasts the values for standards and budgets

(ACCA F5, BPP Learning media)

As a basic introduction about Standard and Budgets is that Standards are prepared normally for one unit cost and for short term plans, it is very easy to make changes in standard. But as compare to standards budgets are prepared for whole productions and for long term plans. And in an organisation different types are budgets are prepared. It is very essential for the budgets that use the reliable values for it therefore technique used for the values called forecasting. Through this technique we get very realistic values for the budget preparation. These two budgets and standards are used as a control or monitoring device for the company plans and strategies. There are many other financial measures available for using the control device. The most important financial measure is ratio analysis by using the ratios we are able to compare the different values of items. Therefore as a particular for Starbucks all the above techniques are very important because Starbucks is registerd corporation and its is compulsory for Starbucks to make audit of its financial statements. Through these above methods Starbucks will be able to find the future targets and then implementation of the set plans. Therefore budgets, standards and ratios are monitoring tools for the Starbucks.


First it is important to define the meaning of goal settings then explain the benefits and challenges that are facing in goal or target settings. There are so many definitions available for goal setting but I picked from an article:

“Goals setting in broad terms is the process of deciding on something you want, planning how to get it, and then workings towards the objectives”


This is very simple definition about explaining the meaning the concept of goal settings. Goal settings are basically a system that gives the hopes to the organisations for meeting the desired targets. Targets are providing so many advantages to the organisations in terms of money, as control device base, lead to cost reductions and focused on profits of the company. These are the some basic benefits avail an organisation by setting the future plans. Budgets and future plans have some challenges in like it takes time for its preparations, unqualified person is not able to set future plans, and it takes so much cost for its preparations. These advantages and challenges vary according to the nature of business and type of business. For the public companies it is very essential for setting the targets as compare to private companies because normally the business of public company are on a large scale therefore plans are compulsory for the business.


As a moral story of the whole concept, Starbucks must be considering the ethics of the business and then its applications in its routine operations. Starbucks higher level management takes the action on the ethical behaviour towards the other people, government, societies and even its competitors. And try to trained the manager of each Starbucks coffee shop.


JUDEO-Christian Ethics (Google English dictionary)

Mary Gormandy White (www.business.lovetoknow.com)

Article from (www.articlebase.com)

Dana Lynn Driscoll, Allen Brizee (owl.english.purdue.edu)


Albert A.Anderson (Professor at Badson college in Wellesley, Massachusetts

Jamais Cascio articles (year 2005)

Keith Davis (www.enotes.com)


ACCA F5, BPP Learning Media


ACCA F5, BPP Learning Media


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