The talk about ethics became prevalent in a few years of the twenty-first century. Particularly in the last two decades, our society has witnessed some very big corporate scandals. There is a long list including AOL-Time Warner, Enron and Rite-Aid. In Enron’s case, bribery was done, debts were hidden, and the markets for power and energy were manipulated. All these acts were not only illegal but also unethical; the problem become stronger because when a business acts unethically, the related businesses also get engaged in unethical activities. Arthur Anderson acted unethically by shredding the documents of Enron to save them; the result was not only penalty charges, legal fees but also they lost revenue and their goodwill was damaged in the public (Ferrell and Fraedrich et al.). Being unethical is not limited to financial manipulation; whenever the companies tend to engage in behavior that is not socially responsible like environmental damages, counterfeiting or piracy, it is termed as being unethical.
The moral principles which guide the behavior of the business are termed as the business ethics. Being ethical requires the application of similar principles which tend to guide the actions of an individual. Ethics are concerned with the moral judgments of an individual regarding the right and the wrong. Although, organizational decisions are taken usually by more than one person, but the fact is that there is a high influence of the company’s culture on those decisions. In particular, being ethical in business means that all the operations and functions of business must be dealt in an ethical manner; which also includes dealing with its stakeholders (Brenkert 703-709). Ethics refers to those set of principles which have an obligation to be applied when making decisions in businesses.
In our daily lives, business and ethics are highly essential and interlinked to each other. The basic foundations of behaving ethically are to be dealing honestly, respectfully and trusting others. The basic purpose of business ethics is to solve the problem of trust for the bigger corporations. Public image is the actual goal of executing business ethics in corporations. Wal-Mart has a negative image while Toyota is perceived as having a positive public image. The public image is created as a result of how the corporations act around different things including: the policy towards the environment, policy towards the treatment of employees, and also the way the organization treats the community at large (Pedersen 155--166). The behaviors determine the ethics and so the business ethics determine the image of the organization as perceived by the public.
American Management Association and the Human Resource Institute conducted a global survey; according to their survey, the major reasons why companies need to behave ethically include: to protect the brand and reputation of the company; and the desire to choose the right over the wrong. Protecting the brand and enhancing the public image is interlinked with gaining customer trust and winning the confidence of the investors. In particular the human resource professionals believed that the top-most driver of the business ethics is globalization. With the rising trend of globalization, the market competition has intensified which has led to the establishment of complex ethical standards and cultures in the corporations. According to the survey, the second most important driver of business ethics by 2015 shall be the “environmental issues” ("Business Ethics Today and Tomorrow").
Business ethics is a very critical and significant issue due to several reasons including; it helps in stopping the malpractices in business like cheating, hoarding, black-marketing etc.; by following the ethical rules, trust and confidence of the customers is improved; it is essential for the survival of the business as it helps eliminate the negative publicity; it safeguards the rights of the consumers including the right of information, right of choice, right to redress, and in particular the right to safety and health; it protects the interest of its suppliers, customers, competitors, dealers, employees and shareholders; with the help of business ethics, a friendly relation is built between the organization and the society which eventually helps in the growth of the economy; by having a good image and a smooth flow of business, the business would grow and revenue would increase (De Cremer and Van Dick et al. 1-4).
Consumer is believed to be the king of the market and satisfying the customer is the basic aim of the businesses. With increased globalization and the ease in access of information, the consumer movement has gained significance. It is not easier to cheat, manipulate and exploit the customers; therefore, transparency, and honesty can only result in the survival and growth of business. Moreover, the human resource of the business has also high significance in defining the success. Being ethical with the employees’ means to deal with them fairly, ensuring proper wages/ salaries and providing them a motivating environment to work in. being ethical for businesses also means to provide space for the small-scale competitors and avoiding monopoly formation (Carroll 33-42). This would ensure proper competition in the market which shall benefit the consumers, the competitors and the society at large.
The issue of business ethics and its challenges will keep on evolving with the continuity of the globalization. The most important ethical issues include poor working conditions, forced labor, health and safety, child labor, discrimination and harassment at work (Ferrell and Fraedrich et al.). For corporations and for individuals, the ethical behavior of the businesses is highly critical as there is a chain of demand and supply present in the society that links these businesses with the daily lives of the individuals (Brenkert 703-709). Concluding, it can be said that in order to enhance the relationships within and outside of the organization, ethics needs to be implemented in businesses. It would result in the creation of a positive mindset that would lead to fostering innovation and enhance the work life. The most important issue for the businesses is to be socially responsible as a corporation.
Brenkert, George G. "The limits and prospects of business ethics." Business Ethics Quarterly, 20. 4 (2010): 703--709. Print.
Carroll, Archie B. "Ethical challenges for business in the new millennium." Business Ethics Quarterly, 10. 1 (2009): 33--42. Print.
De Cremer, David, Rolf Van Dick, Ann Tenbrunsel, Madan Pillutla and J Keith Murnighan. "Understanding ethical behavior and decision making in management: A behavioural business ethics approach." British Journal of Management, 22. s1 (2011): 1--4. Print.
Ferrell, O. C., John Fraedrich and Linda Ferrell. Business Ethics: ethical decision making and cases. 9th ed. OH: South Western, Cenegage Learning, 2012. Print.
Pedersen, Esben Rahbek. "Modelling CSR: How managers understand the responsibilities of business towards society." Journal of Business Ethics, 91. 2 (2010): 155--166. Print.
Unknown. "Business Ethics Today and Tomorrow." American Management Association, 1st February. 2006: Print.