WHAT
IS THE IMPORTANT OF ETHICS IN BUSINESS?
Business ethics is an interesting
branch of business theory, primarily because of the fact that they are
inherently interesting in a market economy. People tend to be extremely
distrustful of corporations in market economies and the bigger they are, the
worse that problem of trust usually gets. Business ethics therefore are
politically charged in many different circumstances and that in turn serves to
make them interesting. Aside from this academic interest however, business ethics are also important for a company and
its success. Here are some ways in which
this is true :
Public Image
Each corporation has a particular public image, which represents the way in
which the public views the corporation. Wal-Mart, for example, has a terrible
public image. Toyota, on the other hand, has a very positive one. These public
images are the result of a number of different things, but they are primarily
the result of the way in which a corporation acts with respect to the different
things around it.
Since public image is largely a result of company behavior, business ethics
play a large role in determining public image since they determine behavior.
And public image is important to success in most cases, which is one of the
reasons as to why business ethics are important to a company's overall success.
Investment
Another reason that
business ethics are important is the relationship they have to investment. When
a person or an entity is considering investment in a particular stock, there
are a number of things they take into account. Aside from the quantitative
factors surrounding a company's profit margin a future prospects, consideration
is also given to a particular company from the point of view of the qualitative
aspects such as their public image and the products that they happen to sell.
All of these things are taken into account before the final investment is made.
Investment is most definitely important to success.
Partnerships
In the business
world, joint ventures happen all the time. They happen all the time because
they are ultimately of great importance to the bottom lines of businesses. If
you want your company to do well in joint ventures, then you need to have good
partners. The only way to get good partners is to have a good reputation both
in terms of a track record and in terms of your business overall. And of
course, the best way to get a good reputation is to ensure that your company
has a strong tradition of ethical business behaviour.
THERE
ARE 12 IMPORTANT OF ETHICS IS IN BUSINESS
- Stop business malpractices : Some unscrupulous businessmen do business malpractices
by indulging in unfair trade practices
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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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 harmful to the consumers
REFERENCE
http://www.buzzle.com/articles/ethics-important-in-business.html
http://highered.mcgraw-hill.com/sites/0073526703/student_view0/ebook/chapter1/chbody1/the_importance_of_ethics_in_business.html
