Business ethics or corporate ethics refers to a study of the ethical and moral principles as well as problems which might arise while conducting business. Furthermore, this study is relevant to the habits of individuals and the entire organization. Learn business ethics definition here.
Introduction to Business Ethics
Business ethics is the study of business activities, business policies, ethical principles, business situations and problems that take place in the business. It is a study where issues of right and wrong are discussed.
While conducting business, traders often try to generate the highest possible returns. Similarly, landlords try to increase their earning from house property and workers demand a higher wage. However, these actions cannot be considered unethical or illegal provided they do not transcend the payment norms set by peer business houses and trades.
Business profits refer to the wages received by proprietors in return of the invested capital and this is why it is imperative to include business profits within the boundary of ethics. Business world comprises an important aspect of our society which is concerned with the standard of living of people.
Benefits of Adhering To Business Ethics
Right Of Workers
Business class exerted ruthless exploitations over children and workers even a few decades back and the growth of small businesses was bottlenecked by the market dynamics which was controlled to a great extent by trusts.
This led to the demand for business ethics and equal rights of workers and thus Government agencies were established for recognizing the importance of labor unions.
Communicating with peers about ethics at workplace leads to the development of integrity and openness which are important ingredients of team building. Employees slowly develop a positive attachment as they see a strong alignment between their own and the business organization’s values which ultimately results in better performance and strong motivation.
Getting Across Complex Situations
During times of changes, business houses often face crisis scenarios as no clear moral compass is present for guiding leaders for overcoming complex conflicts surrounding what is right and what is wrong.
Providing adequate attention to business ethics can be of significant help in such a scenario and this explains the requirement of keeping consistency in actions to both the leaders and their staffs.
Personnel policies try to ensure ethical treatment of employees especially in matters concerning evaluation, hiring, firing and disciplining. If the employer fails to comply with such guidelines, then he can be sued for breach of contract.
Thus, the gap between actual practice and stated corporate culture can actually usher in both ethical and legal implications. Paying attention to ethics can assist supremely in managing diversity and staying buffered from expensive litigation costs.
Business ethics help employees in gaining confidence while dealing with complex situations which might arise in the workplace.
Undertaking ethics programs help workers in avoiding acts of omission and lowering the levy of hefty fines. Violations and ethical issues can be detected at an early stage by these programs for being reported to the concerned authorities.
Better Public Image
An organization which pays adequate attention to its ethics is able to portray a better public image as these organizations impart greater value to people in comparison to profit figures and thus operate with greater honor and integrity.
Questions on Business Ethics
- _________ lays the foundation stone of business ethics.
Ans. Moral and social values
- Business ethics refer to the code of conduct and this should ideally be followed by businessmen during _________.
Ans. Normal activities
- Business ethics relate to the decisions of an _________.
Ans. Individual or workgroup
- The application scope of business ethics is ________.
- Business ethics started catching the attention of business firms, media and academics towards the end of _________.
Ans. Cold war