Introduction
Ethics refers to moral judgments and rules that can help in making proper decisions after differentiating between right and wrong. Business ethics shows ethical behavior including respect, honor, honesty, and trust in all aspects of the business and dealings with stakeholders, employees and customers. If we look at business ethics, several decisions including the decision to behave ethically are made in an organization by not only high level officials but also by the employees at every level that can influence the company’s overall environment. Practically, business ethics tries to find an impact on the ways in which people act and react in business, the policies adopted by them, and the function played by the business in the society (Brenkert 703).
The decision to behave ethically is one of the moral decisions. In this case, workers have to decide that their thinking is on the right course of action. These moral decisions can also result in rejection of the ways that can help in making the huge short-term profits. Fulfillment of promises by the company is also among the most important aspects of business ethics. Anti-corruption stance is another ethical aspect of the company that can protect it from potential losses. Ethical behavior also includes payment of taxes in time that could help in showing the contribution of the company towards local economy. Proper dealing with government officials, who can be corrupt, is also a part of business ethics. This dealing can help in solving issues that are related to the government.
Business ethics have also achieved a huge popularity as the number of business scandals and failures have increased during the last few decades. One of the most disappointing things to know is that the world as a whole has a large number of companies having no or reduced business ethics. Due to long histories of bad ethical behaviors, some companies are also perceived as ‘‘a scourge’’ and as ‘‘ethically challenged’’ (Floyd et al. 753).
Importance of business ethics for companies or organizations
Business ethics is important as it can affect nearly every aspect and sector of the company or organization. Ethical behavior as well as corporate social responsibility can give important benefits to the company. These benefits can attract more investors, better workers, and loyal customers that are helpful in getting even more benefits, thereby improving the business in a cyclical interconnected relationship.
Company’s ethics can improve the confidence and belief of investors and can increase their peace of mind as they know that the company is working in a responsible and ethical manner. It can also help investors in knowing that their investment will go in the right direction with the moral standing. This is useful for a business as good investors and board members can also help in protecting the company from ethical dilemmas (Mullins, and Terry 51).
Business ethics is important for workers as they feel comfortable in knowing that their actions would not be affected by unethical or immoral decisions by other people in the company. This improves the confidence and loyalty of employees, and only loyal employees are able to make personal sacrifices for the company as they believe that the company is working for them and their future is attached to it.
Companies with a strong organizational ethical climate start their work with the interest of their customers as they know that ethical behavior is in direct relation with customer satisfaction. Customers, who are most important for the progress of the company, can also feel a good level of confidence with the company with better business ethics. They feel ease in purchasing products and services from the company. They become loyal to the company and loyal customers can bring more customers to the company’s products and services, thereby improving the sales and profits of the company that can help in making the employees happy and reducing the labor turnover. Happy employees are most important in improvement of productivity. Moreover, these employees can attract further employees, thereby decreasing the recruitment costs enabling the company to get the best talent. All these things can help in bringing the investors towards company that can save the company from takeover. Unethical behavior could damage the company’s reputation that is less appealing to investors and stakeholders resulting in the decline of profits.
Good business ethics can also help in saving the high-quality reputation of the company that is one of the most difficult things to develop. After the development of good ethical business, companies can successfully go for successful joint ventures that are considered to be of great importance for the growth of businesses.
Business ethics are also important for any company or organization from the business point of view as it can help in reducing the chances of being fined for bad behavior. Moreover, companies with better business ethics can also save them from a huge number of laws relating to that behavior as, for example, laws relating to payments of employees, and laws relating to environmental practices.
Importance of business ethics on large scale
Business ethics can influence not only company but it can also have wider consequences as, for example, a company with bad business ethics can affect the environment by improper disposal of waste products, or improper use of lands, or negligence in showing responsibility towards minimization of carbon footprints. These companies not only affect the environment, but also affect the future of the environment and the company.
On the other hand, a company with good decisions can also help on larger scale as, for example, if a company promotes green renewable energy, it can help in improving the environment. Ethical practices not only work on making the environment better for people but also work on reducing negative impact on people.
Development of ethics in the larger organizations and institutions is also important as society looks at them to develop the moral imagination (Berenbeim 25). Developing countries having outside businesses can be affected by poor business ethics. These outside businesses can take the advantage of cheap labor or their dominating role in the market, but this advantage can result in poor business behavior, thereby affecting the country. Poor business ethics can damage the society and environment of those countries. If these bad business ethics are shown by larger corporations, they can set a bad example for other companies in those countries. This can also hinder the progression of all businesses in such countries of the world.
Bad behavior of companies and organizations is also considered as one of the causes in worldwide recession. It can also result in labeling the society as a “cheating culture” and can also result in decreasing the trust on leaders (Floyd et al. 753). Experts are of opinion that ethical behavior in business is the only way in doing business through which business leaders can leave better legacy for the next generation (Mullins, and Terry 50).
Improvement of business ethics
Business ethics have gone through several changes in the last several decades (Holland, and Chad 777).
Checking business or operational ethics is the responsibility of not only individuals but it is also the responsibility of governments. Governments or other related officials can make better laws and regulations, and can enforce them. Without such laws and regulations, sustainability would fail and future generations and environments will be affected.
Proper business ethics have to be adopted to discourage poor business ethics. Countries and societies can boycott such unethical companies or force them to change their ways of businesses, and can help in developing a cycle of continuous improvement in the economy and environment. Proper code of business ethics have also to be adopted by smaller companies working together with big companies.
Proper education of business ethics can help in improving the status of ethical decisions in the organizations and companies. It has been reported that less than one-third of business schools teach business ethics at the graduate level or undergraduate level. Most of the highly recognized business schools of today’s world are unable to deliver education on ethics, social responsibility, and better moral habits (Floyd et al. 753). Moreover, both the Association to Advance Collegiate Schools of Business (AACSB), which is the one of the highly regarded business school academic rating bodies in the world, and the Academy of Management are also in favor of promoting business ethics education for students of business (Holland 777).
Works Cited
Berenbeim, R. E. “Can multinational businesses agree on how to act ethically?” Global Business Ethics, (2002): 24-28.
Brenkert, George G. "The limits and prospects of business ethics." Business Ethics Quarterly 20.4 (2010): 703-709.
Floyd, Larry A., et al. "Ethical outcomes and business ethics: Toward improving business ethics education." Journal of business ethics 117.4 (2013): 753-776.
Holland, Daniel, and Chad Albrecht. "The Worldwide Academic Field of Business Ethics: Scholars’ Perceptions of the Most Important Issues." Journal of business ethics 117.4 (2013): 777-788.
Mullins, John, and Terry Rhodes. "Managing Ethically in Corrupt Environments." Business Strategy Review 22.4 (2011): 50-55.
