The moral study of what is right and what is wrong is called ethics. In business environment it is the rules, regulations and values that a company holds. These values and rules are like glue that helps the company to embrace its employees together. The decisions are made on the basis of these standards that a company has set and according to the situation. Business ethics help to determine the rights of employee and boss both. It is essential to run a business successfully [prides hughes kapoor (2008).business. south western].
The occurrence of ethical consideration:
The pervasion of ethics started due to the observation of unethical behavior in the business which includes. The cases of financial scandals, sexual harassments and use of dirty politics in the race of getting promotions let the business associations to consider ethical rules should be applied in the company. Although these contraventions should be avoided but the purpose of business ethics is far more than this. The moral issues can be a part of any activity and to deal with these issues is the central obligation of the company.
Ethical issues arise with the contradiction of justice and honesty mostly when people are affected by them, which is an issue of potential importance. Whenever decision has to be made between right and wrong, ethics has to be involved for a truthful decision. Therefore ethics is involved in all aspects of business like development, quality, standards and priorities. In the environment of business all decisions are not necessarily based on ethics, they can be factual. Employing or firing, events related to suppliers, prices, making goals, behavior with workers, scheduling or promoting, all needs to be addressed ethically [ Norman E bowie (2002). business ethics. Blackwell publisher]
The way the business is deal in everyday life whether in its production department, designing department, in customer or employee care and in dealing with the performance of the employee, all determined the ethical behavior of the company. Sometimes frauds are not settled down through ethical values but by the collected facts and staff opinion. The implementations of such ethical values are often difficult and the most complex situations are those when everyone has dissimilar point of view.
Frequency of these issues may cause a severe damage of business. There are also some conditions that exist when the workers are allowed to compromise on quality for sale on cheaper rate. These situations cause moral dilemma. The business starts to suffer crisis when they start to defend their wrong deed. This is an issue that is found most commonly [Alan malachowski(2001). business ethics. routledge ].
Business ethics is unavoidable and in some cases it is even worst. The concern is that how to tackle business ethics. A business can be operated on intuition with several uncertainties. Business can be controlled and dominated by groups of influences. It can decide itself about what is right and wrong according to the ethics. Unlike management of accounting, business ethics is more of making decisions concern.
A business may survive without proper financial systems and can ignore issues of related to costs. But they go through a severe suffer of lose. These situations indicate the absence of appropriate management tools. It is an ineffective way of operating business. A business target is achievable only by correct business ethical implementation. Sensitive areas to be addressed can be determined by business ethics which are important for the effectiveness of business. The goals and targets are defined by ethical rules and values by their definition of being ethical. Business ethics helps the authority to utilize its resources where necessary and tells them the way to avoid its wastage. It is therefore rigorously important to understand the business rules for good corporate governance [Alan malachowski(2001). business ethics. routledge ].
The company has responsibilities on society other than that on stakeholders and suppliers. This concept has been adopted from history. In past it was assumed that a corporate is serving a large community. A business is supposed to have objectives and actions to achieve them and gain profits with a social responsibility. The responsibility of authorities of the company is not only to produce fruitful results for the company but for the society in which they are providing their services. They are not only serving the owners but the whole society [ Norman E bowie (2002). business ethics. Blackwell publisher].
The ethics is applied in business which has a direct effect on customers especially because product is developed for the use of its consumer. When the maintenances of the product quality are low, it is an injustice and unmoral action of the corporate with its customers. So the industries and manufacturers cannot ignore the importance of its customers and the impact of unethical attitude on them. The customers are very much concern with the ethical responsibility of the industries and even the recession has not lowered its value but increased it. Customers are very much sensitive about the quality of customer care and services available to them. A survey found that the customers think it is unethical to get financial services from banks. The rate of purchase is influence by ethical behaviors of the company. The rate of purchase is influence by ethical behaviors of the company. It is a major responsibility of a company to be ensured about the quality of product before sending it to the market [Peter W.S.Davies (1997). current issues in business ethics.routledge].
The rate of search for employment has increased in recent years. Most potential seekers are those with higher studies and skills with experience. The young jobseekers are not interested in getting job in a country which is producing products that inacceptable by the society. People want to get job in a well reputed company. On the other hand the employees that are enrolled in a certain sector want a loyal and caring attitude from the authority. It is quit ethical to take care of employee because a company could not have a better outcome if their employee is unhealthy. It is a corporate responsibility to recognize and solve issues of their workers fairly. If a company found an incompatible environment amongst its workers than it has to be addressed through their ethical values and standards. In a research it was found that a company has to full fill three important factors to attain a good reputation in the society. They have to provide good quality products and services. They should be a responsible corporate civilian. They should care about the community and environment around them [Peter W.S.Davies (1997). current issues in business ethics.routledge].
The issues of ethical investors have grown in recent years but it is not a new issue. The loyalty of corporation towards investors of money has a critical importance both for the community and for the growth of the company itself because they invest a huge amount of money. Even the ethical investment is also very important for the organization. Investors are very much concern about the business strategy of the corporation and if they find it unethical in any way they do not invest. The corporation’s interest toward social friendliness and environmental betterment also influence the opinion of the investors to invest in their business. The main point is to focus on the investors and corporations attitude to be morally correct for the good cause of public and business. it is also a responsibility of investors towards its community, that they should not invest in a company a bad ethical profile who serving for an immoral cause[Peter W.S.Davies (1997). current issues in business ethics.routledge].
The persons related to supply and sales meet ethical dilemmas on daily basis that is why most of the corporations are moving towards partnership. The misuse of power is the most common ethical issue in buyer-supplier relationship. Opportunism arises when any of them found their favorable condition and feels greediness. Negotiations should take place to avoid them. This situation is extremely crucial for their profitability. Unfair terms and conditions for anyone of them may cause unethical conditions. The division of power should be done on the basis of resource dependence theory. According to this theory the power should be divided on the basis of degree of resources that they have and share. This shows the importance of resources for other party. The supplier’s resources are not heavily important to the buyer where as buyer’s resources have very much importance on the suppliers. It is the duty of both the buyers and suppliers not to misuse the power for the future honest relationship. Even the wrong use of power may harm the powerful participant [Peter W.S.Davies (1997). current issues in business ethics.routledge, Andrew crane, dirk matten (2007). business ethics.oxford].
Relevancy of business ethics:
Business ethics have a universal scope. Social, political, geographical factors along with financial factors influence the business. Technology and demand shifts the interest of stakeholders. The authority should consider all the factors that are effective in obtaining the goal of the company settled by them. The social responsibilities, consumerism, demographical changes, privatizations, global markets, and environmentalism, all of them have raised the importance of ethical management in the corporation. From 1990’s and 1980’s it has become a fashion to adopt ethical attitude in business. Just like a nutrition that keeps you fit, business ethics is the element to keep the company’s reputation up.
The adaptation of ethics is always fundamental in for the health of the business. The privatization program by government has brought the sharp relief to business ethics. With the increase in global competition, the organizations existence is at risk. This crisis demands for better quality product with a good business approach and the implementation of good business ethical values and rules of ethics. The demand for honest services is also increase by the influence of media. The journalist deeply investigates the approaches of business and discloses its good or bad deeds. The values of ethical laws are also increased by the change in laws of government. Stake holders groups have also enhance the importance of business ethics. Even the employees are not only attracted by a handsome salary package but they also seek for a company with good reputation and ethical standards. The consumers are also very vigilant in choosing a good quality product. Investors made their decision on the basis of company’s social investment and not only on the financial criteria. Global nature of business has also changed the criteria of business. Competition has made its nature fast moving. Ethics is vital in a company because it is valuable tool of the company. Trends in market, politics, environment and commercialism have moved the attention of business from economical issue to ethical issues [Alan malachowski(2001). business ethics. routledge ]
The costs of being unethical:
The lack of management of ethics in the business can cause severe damage. The failure of implementing ethical values when problem arises may cause its survival problem. It is observed in the past that when a company fails to recognize and address the moral issues they had suffered a significant business loss, result the dramatic shutter down of the company. It is an integral activity to run a business since it is observed that a bad ethical approach results a bad business. When a company ignores justice for a short time gain, undergoes from a long time lose.
The clients do not have confidence on the companies who break their promises, cheats them and leave them unrewarded. Even the staff and suppliers do not support injustice act in the company or by the company. Eventually the people stop their wiliness to get job in the company and suppliers will cease its supplies to the company. The market only embrace those companies with an open heart whose employees staff work sincerely to product the end product and those who made honest efforts to sale their product with flexible prices with a good quality. Only the businesses with good ethical approach meet success by leaps and bounds [Alan malachowski(2001). business ethics. routledge ].
A Corporation does not only have economical responsibilities but also have some social responsibilities. The utilization of resources and to get involved in the activities to provide services to the community has to be addressed responsibly. It needs to be engage with the activities that not only gain financial profits but also social profits. The competition is healthy but if it runs fairly without fraud. The main objective should be to serve community. The financial success provides only the partial success of the company. The company should review its strategies and its relationship with its employees, suppliers, stakeholders and consumers to confront if any ethical issue is present. They should examine their ethical behavior towards society, government and its staff to move flawlessly towards the achievement of its mission and objectives, and to compare their organization with its competitive organizations. This helps corporations to attain a good reputation in the market [Peter W.S.Davies (1997). current issues in business ethics.routledge]
Alan malachowski(2001). business ethics. Routledge
Andrew crane, dirk matten (2007). business ethics.oxford
Norman E bowie (2002). business ethics. Blackwell publisher
Peter W.S.Davies (1997). current issues in business ethics.routledge
prides hughes kapoor (2008).business. south western