Business Ethics are concerned with the influence of values
and beliefs upon the conduct and operation of business.
Business Ethics help firms to decide what actions are right or wrong in certain circumstances.
Ethics may influence business decision making in a number of ways. It may lead the owners of business to accept lower profits in short term by purchasing less-polluting techniques.
A firm which is ethical with regard to society as a whole, and the community within which it is based might be described as "socially responsible".
Benefits of Ethical Behaviour
Firms which act ethical, usually experience a rise in their sales. Since, consumers take into account a firm's behaviour when buying products. Hence, it is good for sales. Also, if firms do not test their products on animals, they may see a good reaction from customers. They may also gain good publicity which is very important to many firms. Since, it takes a lot of time to build reputation in the eyes of customers and society. Government will also support those firms which act ethically.
Those businesses can also recruit well-qualified and motivated staff and also retain their existing staff by caring approach. Employees will also feel committed to the organisation and will help in achieving company's objectives.
But, on the other hand ethical behaviour can result in an increase in costs for a firm. For example, a firm turning down cheaper supplies from a firm, which tests its products on animals. Increased costs can lead to fall in the value of profits. When a firm's overall profitability comes into conflict with its ethical policy, problems may result. Shareholders may object to the ethical policy as the return is harmed.
To conclude, ethical debate is often a good predictor of the social changes that later alter the patterns of economic demand. To be effective, ethical standards need the decisive backing of top management. Moreover, ethical codes should be developed with the involvement and agreement of managers at all levels. Otherwise, subordinate staff may fear the consequences of raising ethical objections to company decisions.
Business Ethics help firms to decide what actions are right or wrong in certain circumstances.
Ethics may influence business decision making in a number of ways. It may lead the owners of business to accept lower profits in short term by purchasing less-polluting techniques.
A firm which is ethical with regard to society as a whole, and the community within which it is based might be described as "socially responsible".
Benefits of Ethical Behaviour
Firms which act ethical, usually experience a rise in their sales. Since, consumers take into account a firm's behaviour when buying products. Hence, it is good for sales. Also, if firms do not test their products on animals, they may see a good reaction from customers. They may also gain good publicity which is very important to many firms. Since, it takes a lot of time to build reputation in the eyes of customers and society. Government will also support those firms which act ethically.
Those businesses can also recruit well-qualified and motivated staff and also retain their existing staff by caring approach. Employees will also feel committed to the organisation and will help in achieving company's objectives.
But, on the other hand ethical behaviour can result in an increase in costs for a firm. For example, a firm turning down cheaper supplies from a firm, which tests its products on animals. Increased costs can lead to fall in the value of profits. When a firm's overall profitability comes into conflict with its ethical policy, problems may result. Shareholders may object to the ethical policy as the return is harmed.
To conclude, ethical debate is often a good predictor of the social changes that later alter the patterns of economic demand. To be effective, ethical standards need the decisive backing of top management. Moreover, ethical codes should be developed with the involvement and agreement of managers at all levels. Otherwise, subordinate staff may fear the consequences of raising ethical objections to company decisions.
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