Business Ethics - Vivek

8/2/2019 Business Ethics - Vivek

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DEFINITION OF BUSINESS ETHICS

REQUIREMENT OF BUSINESS ETHICS

HISTORY OF BUSINESS ETHICS

ISSUES INVOLVED IN BUSINESS ETHIC SOME BUSINESS ETHICS PRINCIPLES

IMPORTANCE OF BUSINESS ETHICS

CONCLUSION



The term Business Ethics refers to thesystem of moral,principle & rules of conductapplied to business.

Business Ethics means that the businessshould be conducted according to certainself-recognized moral standards.

A profession is bound by certain ethical

principles &rules of conduct which reflects itsresponsibility ,authority & dignity.



REQUIREMENT OF BUSINESS ETHICS

• Discussion on ethics in business is necessary because business

can become unethical, and there are plenty of evidences today

on unethical corporate practices.

• Even Adam Smith opined that "People of the same trade seldom

meet together, even for merriment and diversion, but the

conversation ends in a conspiracy against the public, or in some

contrivance to raise prices.”

• Firms and corporations operate in the social and natural

environment. By virtue of existing in such environments, business

is duty bound to be accountable to the natural and social

environment in which it survives.



Irrespective of the demands and pressures upon it, business by

virtue of its existence is bound to be ethical, for at least 2 reasons:

1.) Because whatever the business does affects its stakeholders

2.) Because every juncture of action has trajectories of ethical as

well as unethical paths, wherein the existence of the business is justified by ethical alternatives it responsibly chooses . .

One of the conditions that brought business ethics to the fore –

front is the demise of small scale, high trust and face-to-face

enterprises, and emergence of huge multinational corporate

structures capable of drastically affecting everyday lives of masses.



HISTORY OF ETHICS IN BUSINESS

•Business ethics, being part of the larger social ethics, has always

been affected by the ethics of the epoch.•History of business, thus, is tainted by and through the history of

slavery, history of colonialism, and later by the history of the cold

war.

•The current discourse of business ethics is the ethical discourse of

the post-colonialism and post-world wars.

•The need for business ethics in the current epoch began gaining

attention since the 1970s.

•Historically, firms started highlighting their ethical stature since

the late 1980s and early 1990s, as the world witnessed seriouseconomic and natural disasters because of unethical business

practices.

•The Bhopal disaster and the fall of Enron are instances of major

disasters triggered by bad corporate ethics.

http://wiki/Bhopal_disaster

http://wiki/Enron

http://wiki/Enron

http://wiki/Bhopal_disaster



• Do not cheat customers by selling sub-standard or defective

products.

• Do not resort to black marketing , hoarding etc.

• Do not destroy or distort competition.• Ensure accuracy in advertising ,labeling & packaging.

• Make accurate business records available to all authorized

persons.

• Pay taxes and discharge others obligations.

• Ensure payment of taxes , wages & fair treatment of

employees.

• Do not harm the image of competitors by unfair practices.





• Profit Maximization

• Efficient Utilization of Business Resources

• Creates Goodwill in the Market



Profit Maximization:

The importance of ethics in business can be understood by the

fact that ethical businesses tend to make much more profits

than the others.

The reason for this is that customers of businesses which

follow ethics are loyal and satisfied with the services and

product offerings of such businesses. Let us take an example.

Suppose, there is an organization named XYZ whichmanufactures cosmetics. XYZ greatly believes in the

importance of business ethics.

When XYZ advertises its cosmetics in the market, being an

ethical organization, it will be very truthful and honest in itscommunication with the probable customers.



It will tell correctly about the kind of ingredients it has used

while manufacturing the cosmetics. It will not lie or exaggerate

about the benefits or uses of its products either.

So the customers who buy its cosmetics, know precisely what

they are buying and how useful that product is going to be for

them. This way, the product will meet their expectations and thus,

satisfy the customers.

When customers are satisfied, they will become loyal to the

company and come back again for re-purchasing. This will surely

increase the profits of the organization. Thus, the importance of

business ethics is that it creates loyalty in customers and

maximizes the profits.



Efficient Utilization of Business Resources:

• In an organization, people working at the junior levelsoften emulate the ones working at the top. The sameapplies with ethics too.

• If the management or seniors of an organization follow

ethical business practices, i.e., they do not bribe to gettheir way or they do not cheat the customers, investors,suppliers, etc., the employees will follow suit.

• The employees too will refrain from using the office

property or resources for personal benefits. This willresult in better and efficient utilization of the businessresources.



Creates Goodwill in the Market:

•

An organization, which is well known for its ethical practices,creates a goodwill for itself in the market.

• Investors or venture capitalists are more willing to put their

money in the businesses which they can trust.

•

Shareholders too, remain satisfied with the practices of anethical businesses.

• Thus, the importance of business ethics in creating goodwill

and building long term relationships, can not be denied.

•

Also, an ethical business puts greater value on its employeesand thus, employees remain loyal to such an organization too.

http://www.buzzle.com/articles/ethics/

http://www.buzzle.com/articles/ethics/



• The chief goal of any organization is to maximize its

profits.

• The importance of business ethics can be understoodfrom the fact that it helps the businesses in achieving its

goal of profit making

• By creating goodwill for the business in the market

• Increasing its loyalty among the customers, by aiding in

employee retention

• By maximum utilization of its resources.



People have co-existed and survived for so many years. Themain reason why humanity has survived for so long is due to

certain rules, values, mores and ethics, which all of us abide by.

Just imagine, what would happen if suddenly we were left

without any sense of morality or values. In such a scenario, nodoubt, chaos will prevail everywhere. Thus, ethics and values

are the very foundations on which this society is standing.

Same is the case in business. Organizations which follow certain

business ethics have better chances of survival, compared to the

ones whose only goal is to make profits, even if they have to

compromise on a lot of things for that.

http://www.buzzle.com/articles/business-ethics/

http://www.buzzle.com/articles/business-ethics/



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Business Ethics - Vivek

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