Business ethics refers to those values, standards and principles that operate within business (McGraw-Hill Irwin). Business ethics can also be defined as written and unwritten codes of principles and values that govern decisions and actions within a company. In the business world, the company’s culture sets standards for determining the difference between good and bad decision making and behavior. In today's modern business world, the road to success requires more than merely technical skills, practical knowledge and a good product. Business ethics, above all, are the guiding forces to achieve and sustain success.
The questions today are less about why or should ethics be a part of business, than about which ethics should guide business decisions and how ethics can be integrated within business. Code of ethics in a company provides the basis of a fair treatment of all employees that mutually trust each other and that respect human rights and equal opportunity whilst ...view middle of the document...
There are several benefits of ethical behaviors in business which can be summarized as below:
• A reputation as an ethical vendor makes customers want to do business with you.
• Some investors go out of their way to select companies with a good track record of ethical behavior.
• Ethical behavior can improve the organization’s relation with the community, which tends to attract customers and top-notch employees.
• Ethical behavior tends to reduce public pressure for government regulation.
For a business owner, there is a very fine line between doing what's best for the profitability of the company and crossing the line over into the unethical. While many may argue that there is no place for personal values in the dog-eat-dog world of business, the truth is that ethics can make or break a growing business in a number of ways. Companies are boycotted for unethical behavior and profits go down as does consumer trust in the company. When consumers and clients feel they cannot trust a business, their natural reaction is to end their loyalty in that business which in turn, lowers the company's profits. If a company can maintain their clients’ loyalty by acting reasonably and ethically while still remaining in the black financially- no small feat for even the most moral business owner- they will find continued success as the business grows and expands.
In conclusion, the smallest infringement to business ethics has a serious impact on the company, and therefore hurts its ability to go about its activities. A reputation takes years to build, but can be lost overnight following an ethical lapse. (Katherine Bradshaw, Institute of Business Ethics).
1) Gregory Dess, G.T. (Tom) Lumpkin and Alan Eisner (2006) Strategic Management: Text and Cases with OLC McGraw-Hill Irwin.
2) Michael A. Hitt, R. Duane Ireland and Robert E. Hoskisson (2007) Strategic Management - Concepts and Cases 7th Edition, ISBN 0324316941.
3) Kenneth W. Johnson and Igor Y. Abramov (2004) Business ethics: a manual for managing a responsible business enterprise in emerging market economies / U.S. Department of Commerce, International Trade Administration.
1) The Institute for Small Business and Entrepreneurship (ISBE) emagazine: Doing Business Ethically- http://www.isbe.org.uk/Doingbusinessethicallly.