Importance of Ethics in Business

Ethics is important not only in business but in all aspects of life because it is the vital part and the foundation on which the society is build. A business/society that lacks ethical principles is bound to fail sooner or later. According to International Ethical Business Registry, "there has been a dramatic increase in the ethical expectation of businesses and professionals over the past 10 years. Increasingly, customers, clients and employees are deliberately seeking out those who define the basic ground, rules of their operations on a day today...."

Ethics refers to a code of conduct that guides an individual in dealing with others. Business Ethics is a form of the art of applied ethics that examines ethical principles and moral or ethical problems that can arise in business environment. It deals with issues regarding the moral and ethical rights, duties and corporate governance between a company and its shareholders, employees, customers, media, government, suppliers and dealers. Henry Ford said, "Business that makes noting but money is a poor kind of business".

Ethics is related to all disciplines of management like accounting information, human resource management, sales and marketing, production, intellectual property knowledge and skill, international business and economic system. As said by Joe Paterno once that success without honor is an unseasoned dish. It will satisfy your hunger, but won't taste good. In business world the organization's culture sets standards for determining the difference between good or bad, right or wrong, fair or unfair.

Importance of Ethics in Business

"It is perfectly possible to make a decent living without compromising the integrity of the company or the individual, wrote business executive R. Holland, "Quite apart from the issues of rightness and wrongness, the fact is that ethical behavior in business serves the individual and the enterprise much better in long run.", he added.

Some management guru stressed that ethical companies have an advantage over their competitors. Said Cohen and Greenfield, "Consumers are used to buying products despite how they feel about the company that sells them. But a valued company earned a kind of customer loyalty most corporations only dream of because it appeals to its customers more than a product".

The ethical issues in business have become more complicated because of the global and diversified nature of many large corporation and because of the complexity of economic, social, global, natural, political, legal and government regulations and environment, hence the company must decide whether to adhere to constant ethical principles or to adjust to domestic standards and culture.

Managers have to remember that leading by example is the first step in fostering a culture of ethical behavior in the companies as rightly said by Robert Noyce, "If ethics are poor at the top, that behavior is copied down through the organization", however the other methods can be creating a common interest by favorable corporate culture, setting high standards, norms, framing attitudes for acceptable behavior, making written code of ethics implicable at all levels from top to bottom, deciding the policies for recruiting, selecting, training, induction, promotion, monetary / non-monetary motivation, remuneration and retention of employees. "Price is what you pay. Value is what you get" - Warren Buffet

Thus, a manager should treat his employees, customers, shareholders, government, media and society in an honest and fair way by knowing the difference between right or wrong and choosing what is right, this is the foundation of ethical decision making. REMEMBER: GOOD ETHICS IS GOOD BUSINESS. "Non-corporation with the evil is as much a duty as is co-operation with good" - Mahatma Gandhi.

Importance of Ethics in Business
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Rupal Jain, Lecturer, Atharva Institute of Management Studies and I can be reached at jainrupal@sify.com

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Ethics - Why Should We Be Ethical? "To Be Or Not to Be"

In the pursuit of profits, business ethics often get lost or forgotten - or simply ignored altogether. But in the grand scheme of things, ethical business practices are vital to the success of any business, no matter how large or how small that business may be. This includes your business.

Business ethics are not written in stone. There is no set guide to go by. Instead, business ethics simply means conducting your business in a way that is both honest and moral, whatever that means in your particular industry. There was a time when ethics played little or no role in business practices. Today, however, consumers, employees, and businesses that serve other businesses are extremely informed, and business ethics are more important than ever.

While there is no written guideline for business ethics, there are specific areas that are covered. These include general business ethics, professional ethics, and even ethics of economical systems. For example, insider trading has a strong, negative impact on the economy, and therefore, it is not an ethical business practice. It also is not a legal business practice. Insider trading would be considered a breach of ethics concerning economical systems.

Ethics - Why Should We Be Ethical? "To Be Or Not to Be"

Not all breaches of ethics are illegal, however. Some are just frowned upon, while ignoring some business ethic principles can literally ruin your reputation and put you out of business, even though it won't send you to prison. Let's take a look at some of the more important business ethics that you should be aware of:

Ethics that concern consumers. - This would include things such as developing quality products, charging a fair amount for the product, backing the product with a guarantee and honoring that guarantee, and making sure that your customers - consumers - are completely satisfied in their business transactions with you. It also entails providing safe products for consumers, and advertising those products in an ethical - truthful - manner.

Business ethics - concerning business-to-business transactions - Obviously, you should conduct business with other business owners in an ethical manner. Failing to pay vendors is not ethical. Ruining the reputation of a vendor, without just cause, is not ethical. Asking another business to do something illegal is not ethical. Getting creative with the accounting is not ethical. Bribery, kickbacks, and other types of transactions such as this, of course, are not ethical, and are illegal in most cases.

Employee ethics - Just as you expect your employees to hold up to a certain set of standards, your employees expect you to hold up to a certain set of standards as well. Most people will remember the Enron scandal for years, and many business schools will hold the Enron scandal up as an example in their business ethics classes for the rest of time. Other ethical concerns that relate to employees include discrimination, sexual harassment, union busting, privacy issues, and even work place surveillance, such as reading the email of employees, or listening in on their personal phone calls.

If you are a business owner, and you have never taken a course in business ethics, you should really consider doing so. Such classes are offered at most local colleges, and are even available online. Know what is and what is not acceptable in the business world, and you will be better able to help your business grow and succeed, with your reputation intact.

Ethics - Why Should We Be Ethical? "To Be Or Not to Be"
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Ethics - The Conscience for Decision Making

With the continuously surfacing scandals in Corporate America, the idea that any form of ethics exists in business is suspect. We are also seeing similar situations within the ranks of government and religious leaders. And, the lack of ethics is not confined to America. It's global!

By definition, ethics reflect the type of morally permissible standards of conduct a group places upon themselves. It is basically a contract with the society an entity serves. Greed, the desire for power, and blind ambition are some of the factors that have all but eliminated ethical standards. We have lost our conscience. It seems that anything one can get away with to reach their defined pinnacle of success is becoming more and more acceptable.

But the truth of the matter is that a society without rules is a society that is on the brink of chaos and self destruction. Likewise, a society with the wrong kind of rules will ultimately suffer the same fate. Now I'm not sounding the doomsday bell. We still have much residual ethics left in the world to overcome the current trend. But, like a natural resource, our supply is getting lower and we must reverse this downward spiral otherwise a valuable fabric of human society will disappear.

Ethics - The Conscience for Decision Making

What about you? Do you have your own personal code of ethics that form the core of your decision making process? Allowing a small slip today, without a checks and balance system, can ultimately lead to a major spill. Bad habits start small and can quickly grow into an unethical monster. Without conscience serving as a standard of measurement, ethics disappear.

Once we could say that a strong religious orientation was a good standard to govern our ethical conduct. But today, when religious zealots kill in the name of their god, they taint the idea that religious beliefs always produce ethical behavior. Patriotism was once considered a driver of ethical behavior. In my lifetime, I have witnessed a sharp decline in the loyalty to the American ideals of yesteryear. We now have leaders in America speaking out against these ideals almost to the point of being treasonous. These are scary times.

Call me a sentimentalist or a fool but I believe that eventually good triumphs over evil. The lackluster presence of any kind of ethical standards simply means that the effort to turn the direction of our global society must be increased. There has always been unethical behavior in the world. Apathy and acceptance of behavior blatantly unethical must be replaced with a commitment to return to sound principles of conduct. As a starting point, let me suggest that if we simply all began to follow the mandates of the Ten Commandments and the Golden Rule, we'd be very much on the path of corrective action.

Start with yourself. Hold "you" to high standards and morally sound ethical principals centered on the eleven rules just mentioned. By your example, others will begin to see the soundness of your actions. Your life can affect the life of friends and family. Don't underestimate the power of one. Make a difference by teaching the world to return conscience to decision making.

The next time you face a particularly difficult decision, try answering these questions:

* Can I share my decision with everyone?

* Is it legal?

* How does the decision make me feel about myself?

* Who does this decision negatively impact?

* Why am I making this particular decision?

* Have I clearly defined the problem requiring a decision to be sure I'm addressing the correct issue?

* Does this decision serve the company or me personally?

* Is the decision based upon facts consistent with fair play?

* Is the decision consistent with organizational values and culture or my own personal system of ethics?

* Is the decision fair and balanced to those it impacts?

The answers to the above list of questions will clearly identify the ethics of a decision relative to your own personal standards. By being very clear on our five to ten core values, we establish the ground rules for running our life. We know when we act contrary or incongruent to our values. Ignoring this feeling usually gets us in trouble. Most understand the difference between right and wrong. They just choose to follow wrong!

Some Final Thoughts on Ethics

Everyone has moral autonomy. We have the power to make individual choices, important to us, as we move through life. Choices are based upon the personal set of values we've established as rules for how we will live our life. Most understand that all choices are not necessarily ethical. But most know when such choices are made.

Whatever ethical standards we've established for ourselves are with us twenty-four hours a day. There is no different set of business ethics. Our personal ethics come to work with us.

We need to be more keenly aware when we have ethical lapses and continuously strive to make them less frequent. Life is not perfect and we are not perfect. Placing a high moral standard to govern our actions is the right thing to do. The question to answer is, "Do we have the moral courage to do so?"

Ethics - The Conscience for Decision Making
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Billy Arcement, MEd.,-The Leadership Strategist, is a seasoned professional speaker, author, facilitator and coach. Learn more about his services at his website, http://www.SearchingForSuccess.com Call him directly at 225-677-9426 or email barcement@eatel.net Copyright 2007

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