Why Do We Need To Study Business Ethics?

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Importance of Business Ethic
Ethical motivation:
It protects or improves reputation of the organization by creating an efficient and productive work environment. At a time of mass corporate downsizing, one of the most effective ways to appeal to the fragile loyalty of insecure employees is to promote an ethical culture, which gives employees a greater sense of control and appreciation.
Balance the needs and wishes of stakeholders:
There is pressure on business to recognize its responsibilities to society. Business ethics requires businesses to think about the impact of its decisions on people or stakeholders who are directly or indirectly affected by those decisions. Companies build their image by acting in accordance with their values, whatever they might be. Creating a positive public image comes from demonstrating appropriate values. Publicizing and following a companys values allows stakeholders to understand what the company stands for, that it takes its conduct as an organization seriously.
Global challenges:
Business must become aware of the ethical diversity of this world because of increasing globalization of the economy. It must learn the values of other cultures, how to apply them to its decisions, and how to combine them with its own values. In a world where transnational corporations and their affiliates account for two-thirds of the worlds trade in goods, and employ 73 million people, corporations cannot afford to ignore the reality of multicultural ethics.
Ethical pay-off:
They serve to protect the organization from significant risks, and to some degree help grow the business. Risks such as breaches of law, regulations or company standards, and damage to reputation were perceived to be significantly reduced.
Employee Retention:
One of the major costs in business is inappropriate turnover. The loss of valuable experience and development of new personnel is a cost companies can control. Seldom is pay the primary factor in losing an employee. What would a company give to retain valuable employees? With a successful program, the employees work with managers and supervisors in making decisions based on the companys values. A successful Business Ethics program establishes a culture that rewards making the right decision.
Prevention and Reduction of Criminal Penalties:
The United States Sentencing Commission Guidelines state that to receive a 40% reduction in federal penalties, a company must have an effective program to detect and prevent violations of the law. Executives cannot always be aware of everything done in a companys name. Jeffrey Kaplan in his article The Sentencing Guidelines: The First Ten Years points out that recent case also show that prosecutors are electing not to pursue some actions because the companies in question have sound programs in place. This is a tremendous asset to companies under regulatory scrutiny.
Preventing civil lawsuits
: Many times employees that experience issues in the workplace first try to resolve these issues internally. If their complaints are ignored, employees feel compelled to go to an outside advocate. That could be private attorney, government regulator or news agency
Market Leadership
: When a company fully integrates its values into its culture, quality rises due to the employees focus on values. Customers see that the employees care about the customers concerns. Employees reflect appropriate values in their attitude and conduct. Roy Keener in his article Want More Profit? Try Ethical Business Practices points out that business demonstrating the highest ethical standards are also the most profitable and successful.
Setting the Example
By setting the example in the community and market, the entire industry has a new standard that allows the community and the market to recognize the company as a leader. When the word gets out, competitors will have to answer questions about why they were not establishing similar values.
Business ethics that are important are:
1. Charge the customer a fair price. Dont be greedy.
2. Treat the customer with respect, as though he is better than you.
3. Do not purposely sell the customer defective items or advice, or anything that is harmful or unsafe.
4. Always tell the customer the truth.
5. Treat your staffs like you treat yourself, or better. Be kind and generous to your staff.
6. Pay your suppliers promptly.
FEATURES OF BUSINESS ETHICS
1.Ethical Values:
Business ethics is concerned with morality in business in todays business world, community firms is large part of society and its action is bond to have a direct impact on the wellbeing and welfare of the society. Business affects society in terms of what products it supplies. Therefore, it is necessary that business community conduct its activities with self control, self check, and self scarifies .i.e. acting with less concern for you than for the success of the joint activity. And keeping always in mind the interest of community at large signifies ethical values.
2. Relative term:
Ethics is a relative term in the concept of morality and immorality. It differs from one individual to another or from society to society. What is moral to one may be immoral to another.
3. Interest of society:
Business ethics implies that business should first do well to the society and then to itself. Business is an important institution and has a social responsibility to protect the interest of all those groups who are directly or indirectly related to the organization like employees, shareholders and consumers etc. to contribute to the success of business.
4. Business social relationship:
Business ethics set the terms and standards to understand the societal relationship of business. It indicates what society expects from business and what it thinks about the business.
5. Provides the framework:
Like an individual, business is also bound by social rules and regulations. Business is expected to restrict its activities within the limits of social, legal, cultural, and economic environment.

6. Facilitates protection of social groups:
Business ethics gives protection to consumers and other social groups such as shareholders, employees and the society at large. Business should give priority to social interest or social good. Such ethical approach creates good name, add status to business and helps in its growth and expansion.


7. Not against profit making:
Business ethics is not against fair profit making. However, it is against making profit by cheating and exploiting consumers, employees or investors. It supports expansion of business activities but by fair means and not through illegal activities or corrupt practices.

8. Needs willing acceptance:
Business ethics cannot be imposed by law or by force. It must be accepted as self-discipline by businessmen. It should come from within. Businessmen should go for ethical trade practices on their own and not by force of law.
2. Code of conduct: Business ethics is a code of conduct. It tells what to do and what not to do for the welfare of the society. All businessmen must follow this code of conduct.
3. Based on moral and social values: Business ethics is based on moral and social values. It contains moral and social principles (rules) for doing business. This includes self-control, consumer protection and welfare, service to society, fair treatment to social groups, not to exploit others, etc.
4. Gives protection to social groups: Business ethics give protection to different social groups such as consumers, employees, small businessmen, government, shareholders, creditors, etc.
5. Provides basic framework: Business ethics provide a basic framework for doing business. It gives the social cultural, economic, legal and other limits of business. Business must be conducted within these limits.
6. Voluntary: Business ethics must be voluntary. The businessmen must accept business ethics on their own. Business ethics must be like self-discipline. It must not be enforced by law.
7. requires education and guidance: Businessmen must be given proper education and guidance before introducing business ethics. The businessmen must be motivated to use business ethics. They must be informed about the advantages of using business ethics. Trade Associations and Chambers of Commerce must also play an active role in this matter.
8. Relative Term: Business ethics is a relative term. That is, it changes from one business to another. It also changes from one country to another. What is considered as good in one country may be taboo in another country.
9. New concept: Business ethics is a newer concept. It is strictly followed only in developed countries. It is not followed properly in poor and developing countries.
Article source: articlesnatch.com

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