Ethics are a set of moral principles which are recognized in respect to a particular class of human actions or a particular group, for instance the medical ethics, legal ethics, teaching ethics, business ethics that brings together people of the same profession. These principles deal with values relating to human conduct with respect to concepts such as being good or bad, decent or shameful, right or wrong etc. These values guide members of a group to act in a manner that is consistent with the values and standards as established. Business ethics are those virtues that business people apply when making business decisions. They are the standards expected within the business world, even if they are not written down and which business people ought to adopt. For instance business people are expected to afflict least suffering to their customers, being fair in their dealings and nurturing an enduring virtuous corporate character in totality. Business ethics are important because they keep business people to operate within a moral and legal pedestal which not only leaves them satisfied internally but also increases sales because most people like dealing or doing business with honest businessmen. Good business ethics should be embraced by all businessmen because engaging in unethical practices, which may include breaking the law, may lead to heavy fines or lack of trust by members of the public. Some of the business ethics include the following: •
Being trustful by recognizing that customer is the “king”. Customers want to do business with companies they trust and which they perceive to be showing them respect. When a business entity is trusted, it creates a loyal clientele. •
Business people should be ready to meet the obligations of their customers and business partners regardless of anything else. Business people should offer their end of the bargain at all cost because this is the only way to strengthen customer and business partner's loyalty. •
Engaging in fair trading practices like guaranteeing a safe workplace for employees, fair pricing for products that will at least cover the cost of production, and treating customers well among others will guarantee a high business turnover. •
Every businessman wakes up every day with the intent to make profit. When a business operates within ethical realms, there will always be clear indications for growth. Equally, a business needs to make profit so as to meet its ethical obligations to the company, its employees, the authorities and customers. •
In essence, being ethical as a business person builds the image of reliability and establishes reputation with customers, the two things that are very important to a business. (Jentz, 2011,2008)
In the short-run, being unethical may give temporary gains, but the unethical actions will always catch up and ruin those gains. In the long run, honesty is the best policy. Being ethical and honest actually costs less than being unethical. Bad ethics increases costs in at least three ways: increased transactional costs, increased costs directly to the company, and the costs of bad press.
The Sarbanes-Oxley Act is a good example of the increased transactional costs of unethical behavior. Because of the dishonesty of a few firms, namely Arthur Andersen and Enron, the government enacted new laws that increased the amount of oversight required in public companies. Companies are now required to place even stricter controls on their processes and have even more documentation and audits than before. These increased transactional costs came about because of unethical behavior and cause a deadweight loss to public companies.
Unethical behavior causes other, more direct, costs to the company. Once a culture of bending the rules for efficiency's sake is in place, it is not a far stretch to other unethical behaviors, for the individual employee's sake and to the damage of the company. An employee may decide to clock in a bit early, or clock out a...
Please join StudyMode to read the full document