The Importance of Ethics and Social Responsibility in Organizations

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A pair of “Air Jordans” cost Nike about $16 dollars to produce, which gives Nike a gross profit of $164 per pair, about 90%, before marketing expenses. Nike’s athletic shoes used to be manufactured in Massachusetts. However, now they’re all made overseas, largely from Indonesia, where workers earn $4 per day, barely enough to pay transportation, shelter, health care, and a decent meal, and they can only dream of buying a pair of Nikes for themselves. In this situation, is Nike being unethical?
The answer for that question would probably be yes. Nowadays, being ethical in your organization is very important as it is a crucial factor for the organization’s success. Companies with strong ethics program tend to have a better reputation, can reduce potential costly fines, provide better access to capital, enhance customer loyalty, and most importantly, positively affect their employees’ performance and commitment to work. What is ethics? And what does it mean to be ethical? Ethics is the code of moral principles, values, and beliefs that set standards for what is “wrong” and what is “right”, and being ethical means behaving in a way that is accepted as good and right in the context of the governing moral code. And in business the term “ethical behavior” refers to how an organization ensures that all its actions, decisions, and stakeholders interactions conform to its moral code. Organizations establish ethics policies in order to identify expectations of workers and to offer guidance on handling common ethical problems such as employee theft, conflicts of interest, quality control issues, discrimination, misuse of company assets, environmental pollution, and many more. Many factors determine whether an organization’s certain behavior is ethical or unethical. In today’s business environment, pressure and stress to accomplish higher goals in a tighter time frame can cause companies to slip into unethical decisions and behaviors. According to a global survey

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