Need or Importance of Business Ethics

These twelve points below discuss the need, importance of business ethics.

Image Credits Sameer Akrani. 1. Stop business malpractices : Some unscrupulous businessmen do business malpractices by indulging in unfair tradepractices like black-marketing, artificial high pricing, adulteration, cheating in weights and measures, selling of duplicate and harmful products, hoarding, etc. These business malpractices are harmful to the consumers. Business ethics help to stop these business malpractices. 2. Improve customers' confidence : Business ethics are needed to improve the customers' confidence about the quality, quantity, price, etc. of the products. The customers have more trust and confidence in the businessmen who follow ethical rules. They feel that such businessmen will not cheat them. 3. Survival of business : Business ethics are mandatory for the survival of business. The businessmen who do not follow it will have short-term success, but they will fail in the long run. This is because they can cheat a consumer only once. After that, the consumer will not buy goods from that businessman. He will also tell others not to buy from that businessman. So this will defame his image and provoke a negative publicity. This will result in failure of the business. Therefore, if the businessmen do not follow ethical rules, he will fail in the market. So, it is always better to follow appropriate code of conduct to survive in the market. 4. Safeguarding consumers' rights : The consumer has many rights such as right to health and safety, right to be informed, right to choose, right to be heard, right to redress, etc. But many businessmen do not respect and protect these rights. Business ethics are must to safeguard these rights of the consumers.

5. Protecting employees and shareholders : Business ethics are required to protect the interest of employees, shareholders, competitors, dealers, suppliers, etc. It protects them from exploitation through unfair trade practices. 6. Develops good relations : Business ethics are important to develop good and friendly relations between business and society. This will result in a regular supply of good quality goods and services at low prices to the society. It will also result in profits for the businesses thereby resulting in growth of economy. 7. Creates good image : Business ethics create a good image for the business and businessmen. If the businessmen follow all ethical rules, then they will be fully accepted and not criticised by the society. The society will always support those businessmen who follow this necessary code of conduct. 8. Smooth functioning : If the business follows all the business ethics, then the employees, shareholders, consumers, dealers and suppliers will all be happy. So they will give full cooperation to the business. This will result in smooth functioning of the business. So, the business will grow, expand and diversify easily and quickly. It will have more sales and more profits. 9. Consumer movement : Business ethics are gaining importance because of the growth of the consumer movement. Today, the consumers are aware of their rights. Now they are more organised and hence cannot be cheated easily. They take actions against those businessmen who indulge in bad business practices. They boycott poor quality, harmful, high-priced and counterfeit (duplicate) goods. Therefore, the only way to survive in business is to be honest and fair. 10. Consumer satisfaction : Today, the consumer is the king of the market. Any business simply cannot survive without the consumers. Therefore, the main aim or objective of business is consumer satisfaction. If the consumer is not satisfied, then there will be no sales and thus no profits too. Consumer will be satisfied only if the business follows all the business ethics, and hence are highly needed. 11. Importance of labour : Labour, i.e. employees or workers play a very crucial role in the success of a business. Therefore, business must use business ethics while dealing with the employees. The business must give them proper wages and salaries and provide them with better working conditions. There must be good relations between employer and employees. The employees must also be given proper welfare facilities. Healthy competition : The business must use business ethics while dealing with the competitors. They must have healthy competition with the competitors. They must not do cut-throat competition. Similarly, they must give equal opportunities to small-scale business. They must avoid monopoly. This is because a monopoly is harMost of us would agree that it is ethics in practice that makes sense; just having it carefully drafted and redrafted in books may not serve the purpose. Of course all of us want businesses to be fair, clean and beneficial to the society. For that to happen, organizations need to abide by ethics or rule of law, engage themselves in fair practices and competition; all of which will benefit the consumer, the society and organization. Primarily it is the individual, the consumer, the employee or the human social unit of the society who benefits from ethics. In addition ethics is important because of the following:

1. Satisfying Basic Human Needs: Being fair, honest and ethical is one the basic human needs. Every employee desires to be such himself and to work for an organization that is fair and ethical in its practices. 2. Creating Credibility: An organization that is believed to be driven by moral values is respected in the society even by those who may have no information about the working and the businesses or an organization. Infosys, for example is perceived as an organization for good corporate governance and social responsibility initiatives. This perception is held far and wide even by those who do not even know what business the organization is into. 3. Uniting People and Leadership: An organization driven by values is revered by its employees also. They are the common thread that brings the employees and the decision makers on a common platform. This goes a long way in aligning behaviors within the organization towards achievement of one common goal or mission. 4. Improving Decision Making: A mans destiny is the sum total of all the decisions that he/she takes in course of his life. The same holds true for organizations. Decisions are driven by values. For example an organization that does not value competition will be fierce in its operations aiming to wipe out its competitors and establish a monopoly in the market. 5. Long Term Gains: Organizations guided by ethics and values are profitable in the long run, though in the short run they may seem to lose money. Tata group, one of the largest business conglomerates in India was seen on the verge of decline at the beginning of 1990s, which soon turned out to be otherwise. The same companys Tata NANO car was predicted as a failure, and failed to do well but the same is picking up fast now. 6. Securing the Society: Often ethics succeeds law in safeguarding the society. The law machinery is often found acting as a mute spectator, unable to save the society and the environment. Technology, for example is growing at such a fast pace that the by the time law comes up with a regulation we have a newer technology with new threats replacing the older one. Lawyers and public interest litigations may not help a great deal but ethics can. Ethics tries to create a sense of right and wrong in the organizations and often when the law fails, it is the ethics that may stop organizations from harming the society or environment. 12. mful to the consumers

Common Ethical Dilemmas in Business

Ethical dilemmas in business range from the mundane, such as accepting a personal call at the office, to the newsworthy, such as the Enron scandal. In business, many ethical dilemmas can be addressed by legislation, such as corporate policies regarding sexual harassment training and the SarbanesOxley Act, legislation requiring corporate accountability. Some dilemmas are a regular part of the workplace experience, and not all situations are black and white.

1. Personal Business During the Work Day

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Whether or not is acceptable to tend to personal affairs during business hours is a dilemma that involves many factors. Although not something discussed

during the interview process, taking care of personal business on company time can be a problem. When a situation like calling a spouse to discuss family matters arises, it is best to have a clear understanding of the corporate culture in advance. Your work status can also inform your decision whether to deal with personal matters during work hours. If you are paid by the hour, the ethical issue is more pronounced. Any time you attend to personal business, you are doing so on the company dime. However, if you are salaried, you are expected to work extra hours, which could cover the time spent tending to personal business.

Relationships with Co-Workers

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Some companies have a clearly defined policy regarding interoffice dating, while others leave the decision up to employee judgment. Conflicts of interest associated with workplace romantic relationships with supervisors include compensation, biased performance reviews and preferential treatment. Additionally, should romantic relationships end badly, the company could face sexual harassment charges. Even employees whose work areas do not intersect could encounter similar issues. If you choose to pursue a relationship with another individual at your company, make Human Resources aware of the situation and find out what is customary.

Illegal or Unethical Requests

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The most serious, business-related, ethical dilemma arises when a supervisor or manager asks you to do something illegal or unethical. Aggravating the issue is the implicit threat of losing your job if you don't comply with the request. How you handle such a request depends on the previously established relationship with your boss. When you are first approached about doing something illegal or unethical, maintain your composure and choose your words carefully. You can always propose an alternative, legal and ethical solution.