Business ethics are moral principles that guide the way a business behaves. The same principles that determine an individual”s actions also apply to business. Acting in an ethical way involves distinguishing between “right” and “wrong” and then making the “right” choice. It is relatively easy to identify unethical business practices. For example, companies should not use child labour. They should not unlawfully use copyrighted materials and processes. They should not engage in bribery. However, it is not always easy to create similar hard-and-fast definitions of good ethical practice. A company must make a competitive return for its shareholders and treat its employees fairly. A company also has wider responsibilities. It should minimise any harm to the environment and work in ways that do not damage the communities in which it operates. This is known as corporate social responsibility. Codes of behaviour
The law is the key starting point for any business. Most leading businesses also have their own statement of Business Principles which set out their core values and standards. In Anglo American”s case, this is called “Good Citizenship”. A business should also follow relevant codes of practice that cover its sector. Many companies have created voluntary codes of practice that regulate practices in their industrial sector. These are often drawn up in consultation with governments, employees, local communities and other stakeholders.
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The fall of the economy in 2008 was spurred by several bad business practices that lead to liquidity shortfall occurring in the U.S. banking system, the collapse of the largest financial institutions and the bailout of many banks by the national government, as well as downturns in the stock markets globally. Along with financial institutions and banks, the housing market fell as well resulting in many homes being foreclosed and many residents being evicted as well as prolonged vacancies. There were many questions concerning bank solvency, as well as declines in credit availability and a largely damaged investor confidence that led to a great fall in the economy during 2008, with the largest businesses falling with the economy and many consumers feeling the heat. Cutting Customer Service Levels
As the economy was faltering and businesses were seeking new ways to save money, customer service began a back slide. Consumers were no longer greeted by customer service agents promptly, seeking to reduce the queue time, but with recorded messages stating there would be a few minute wait time to the call. Not only did this send consumers searching for a new business to deal with, but sent the businesses looking for funding where they had lost it due to cut backs. Cutting back the customer service levels meant saving money where it was needed most and ignoring the consumers that kept the business alive, resulting in the downfall of many businesses due to a massive drop in customers. Replacing Representatives with Computers
Still affecting customer service, many businesses felt that cutting salary costs by replacing customer service representatives with computer answerers would be a great choice to lessen costs and maintain customer service, but it did just the opposite. Many consumers were still requiring or preferring the assistance of a live representative, but found it extremely difficult to reach one. Again, many consumers headed for the other businesses that still valued human contact as a way of resolving issues.
Cutting Employee Wages
The bankruptcy of several companies is a prime example of what happens when expense management turns to employee wage cuts which spells nothing but...
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