Business ethic is the behavior that a business adheres to in its daily dealings with the world. It is diverse and it not only concerns dealings with the world but also with the customers. Business ethics plays a major role in the success of every business. The way a business deals with the environment around it contributes a lot to how the public views it. The way a business treats its employees and the communities around it determines its public image and therefore its success. Every business should understand that it has a social responsibility to the community around because its customers and investors come from the community. This paper looks at the application of ethical behaviors in businesses and the benefits a business stands to gain by conducting its activities ethically.
All businesses aim at making a profit although this cannot be possible if good standards are not observed when dealing with the employees and the outside world. A profitable business contributes more to society than a non-profitable business. The application of ethics in a business influences other business to follow suit thereby ensuring that, all businesses carry out their activities in an ethical manner. If an employer meets all the responsibilities pertaining to an employee, suppliers, and customers, then he can be assured of honesty, productivity, and loyalty (Jennings, 2008). For instance, if employees are treated ethically, they will behave ethically towards customers and business investors thereby increasing the production of the business. All employees should be treated equally regardless of their position or personal characteristics; there should be no discrimination on any grounds. When this is achieved, employees feel motivated and ready to work for the business.
Business ethics are directly related to investment, they involve being responsible to an investor. The stronger the business ethics are for a particular company, the higher the chances of attracting investors in the business and this leads to success (Crane & Matten, 2007). A business does well when it has joint ventures, however, for these ventures to help a company to succeed then they ought to be good partners in the business. Good partners result from a good public image which results from strong business ethical behaviors.
Social responsibilities are ethical theories concerning every entity, be it a government, organization, or individual enterprise towards the society at large. Social responsibility involves being accountable for the impacts that might be caused by some actions that a business involves itself in. Every entity has to consider the impacts that some actions might have on society and become accountable for them. All business entities have an ethical duty of being socially responsible (Ferrell, et al. 2006). However, many businesses tend to concentrate on shareholders’ wealth maximization and forget about the welfare of society. Every business has to ensure that society is not exploited at the expense of other people’s mistakes. For instance, raising the prices of goods and services when a business is in crisis is not an ethical thing to do. Instead of raising the prices, the business can search for better marketing strategies to boost their sales and this can result in higher returns than raising prices.
Every business has a duty to uphold social responsibilities in society. Society is the source of customers to the business. Businesses should aim at making sure that all the customers are satisfied and that they are able to retain them. Every business has to make sure that, it works hard to reduce the negative effects while increasing the positive ones. For every business, some measures have to be taken into consideration for it to be considered as being socially responsible. These measures are a social investment, ability to solve problems, quality of products, and financial function. When a business is striving to meet its goals, it must consider these factors. When the society is satisfied, it becomes easy to run the business because more customers will be attracted and as a result the sales revenue increases. However, this cannot be achieved if the management is not good; this is because poor management ruins businesses. For a business to be successful, it has to employ professional and skilled managers who will be responsible for the day-to-day running of the business.
The code of ethics describes behaviors expected from employees. The purpose of this code of ethics is to instill discipline and self-assurance in employees so that they are able to perform the duties assigned to them. They are expected to take responsibility for the decision they make or fall short of making. They are expected to show respect to their fellow practitioners, clients, and resources given to them. Employees in all organizations are expected to be fair in making a decision and their conduct should not be influenced by self-interest or prejudice. Honesty is required in their communication and conduct (Jennings, 2008). However, they cannot be able to achieve all these if their leaders do not act as role models. It is easy to set rules and procedures that should be followed in the workplace but it is always difficult to ensure that these rules are followed especially if the leaders do not follow them. Before expecting an employee to behave ethically, employers should show what is meant by ethical behaviors so that the employees can emulate them.
Many employers do not respect employees and at the same time expect them to perform their duties effectively. Most organizations introduce new products into the market to fight competition. If the organization’s expectations are not fulfilled after the introduction of a new product to the market, the blame falls on the employees. They are held responsible for the failure without taking into consideration other factors that might have contributed to the failure. This should not be the case because employees should be treated as part and parcel of the organization and if the organization fails in one of its strategies, all stakeholders involved should be held responsible. In this way, employees fear valued and become creative and innovative in making future strategies that will ensure the success of the business.
Ethical behavior promotes self-interest. There is a direct relationship between ethical behaviors and the enhancement of one’s self-interest. For instance, when stockholders read about a company’s activities in the newspaper, the company’s share prices will either fall or rise. This is because people will only choose to do business with a morally upright company and avoid immoral companies. Ethical decision making more often than not results in good decisions for the company which enhances production. However, the enhancement may not be immediate but the benefits are long-term which are best for the business (Ferrell, et al. 2006). One should not be concerned about the ethical requirements but rather the direct relationship to good business sense.
Sometimes business chooses to do the ethical thing not because it coincides with the best business decision, but just for the sake of self–interest. There are certain standards that a business should observe while dealing with the community, if it does not regulate its behavior, it can be made the subject of external regulation. Some laws do not specifically apply to a particular area of business but have to be observed by all businesses. If a business does not follow these rules, it may attract the attention of the local government which may turn up to be expensive. For example, it is in the business’s self’ interest not to engage in fraud but if it chooses to do so, the penalties are enough to outweigh the expected benefits. Therefore, it makes sense for a business to be ethical in this regard (Crane & Matten, 2007). In this case, a business has two externalities to consider; either to regulate its own behavior or wait for external authorities to regulate its conduct. The latter is rather expensive because it has some costs associated with it which should be avoided if a business chooses to behave ethically.
It is not only through conducting a business ethically that makes a business successful, sometimes a business is forced to do more than just the ethical things if it wants to reap maximum benefits. It is not through making publications about having done a morally good thing that will ensure increased production but putting more effort in ensuring that a business produces efficient quality goods. Good customer care is requisite in all businesses, but also these customers have to be satisfied with the business’s products or services. Reaching out to the community in terms of helping the poor or organizing clean-up days is a form of social responsibility that can lead to an increase in the customer base, but if the services or products are substandard, the ethical thing will not necessarily improve the business’s production.
Crane A., & Matten, D., (2007). Business ethics: managing corporate citizenship and sustainability in the age of globalization. Oxford: Oxford University Press.
Ferrell, O. C., et al. (2006). Business Ethics: Ethical Decision Making and Cases. New York: Cengage Learning.
Jennings, M. M. (2008). Business Ethics: Case Studies and Selected Readings. South-western Legal Studies in Business Academic Series. New York: Cengage Learning.