What is Business Ethics? | Do you like to Blog

 

What is 

Business Ethics ?

In a broad sense, ethics in business refers to the application of day-to-day moral and ethical norms to business. Business ethics are the principles and standards that determine acceptable conduct in business organization.

Requirements:

Being ethical in business requires acting with an awareness of –

(a) The need for complying with rules

(e.g.) (i) Laws of the land,

(ii) Customs and expectation of the community,

(iii) Principles of morality,

(iv) Policies of the organization and

(v) General concerns such as the needs of others and fairness.

(b) How the products, services and actions of a business enterprise, can affect its stakeholders (i.e. employees, customers, suppliers, shareholders and community society as a whole) either positively or negatively

Benefits which may be obtained by paying attention to Business Ethics

Ethics is the concern for good behavior – doing the right thing. In business, self-interest prevails and there is always inconsistency between ethics and business. But it is a well settled principle that ethical behavior creates a positive reputation that expands the opportunities for profit. The awareness regarding products and services of an organization, and the actions of its employees can affect its stakeholders and society as a whole. Therefore, to pay proper attention to business ethics may be beneficial in the interest of business. These benefits may be enumerated as follows:

(1) In the recent past ruthless exploitation of children and workers, trust control over the market, termination of employees based on personalities and other factors had affected society and a demand arose to place a high value on ethics, fairness and equal rights resulting in framing of anti-trust laws, establishment of governmental agencies and recognition of labor unions.

(2) Easier change management: Attention to business ethics is also critical during times of fundamental change. The apparent dilemma may be whether to be nonprofit or for profit. In such situations, often there is no clear moral compass to guide leaders about what is right or wrong. Continuing attention to ethics in the workplace sensitives leaders and staff for maintaining consistency in their actions.

(3) Strong team work and greater productivity: Ongoing attention and dialogues regarding ethical values in the workplace builds openness, integrity and a sense of community which leads to, among the employees, a strong alignment between their values and those of the organization resulting in strong motivation and better performance.

(4) Enhanced employee growth: Attention to ethics in the workplace helps employees face the reality - both good and bad in the organization and gain the confidence of dealing with complex work situations.

(5) Ethical programs help guarantee that personnel policies are legal: A major objective of personnel policies is to ensure ethical treatment of employees. In matters of hiring, evaluating, disciplining, firing etc. An employer can be sued for breach of contract for failure to comply with any promise. The gap between corporate culture and actual practice has significant legal and ethical implications. Attention to ethics ensures highly ethical policies and procedures in the work place. Ethics management programs are useful in managing diversity. Such programs require the recognition and application of diverse values and perspectives which are the basis of a sound ethics management program. Most organization’s feel that cost of mechanisms to ensure ethical program may be more helpful in minimizing the costs of litigation's.

(6) Ethical programs help to detect ethical issues and violations early, so that criminal acts “of omission” may be avoided.

(7) Ethical values help to manage values associated with quality management, strategic planning and diversity management.