What is Business Ethics
Business ethics refers to moral principles and social values that business should adopt in its code of conduct. These are rules that business must accept and follow in its day to day operations for the welfare of society and all its stakeholders. Business is termed as social organ and therefore it should not indulge in any activity that is harmful to the interest of all its stakeholders.
It should not only focus on objectives like profit maximisation, higher growth but should work for upliftment of its surrounding also. These ethics helps the business in deciding what is right and what is wrong for the business taking into account its circumstances. Business ethics helps the business to maintain better and harmonious relations with society, customers, employees and concerned industry sector.
Ethics adopted by the business should be followed strictly by each and every person working with the business. There should be a reward-punishment system linked with business ethics for those violating these ethics and one who properly abide by these ethics. Business ethics have an important role in raising the profitability and productivity of a business and improve its goodwill in the market. Features of Business ethics are explained in details in points given below:
Features of Business Ethics
Maintains Legality of Business
Business ethics ensure that business does not involve in any illegal activities. Ethics in business clearly defines the rules and principles that business needs to adopt in its code of conduct. These ethics avoid the adoption of unfair trade activities like adulteration, black marketing, frauds and cheating in the product, improper weights and measures etc. This all helps in maintaining the legality of the business.
Reduce Risk and Cost
Ethics in business helps in improving the productivity and overall efficiency of the organisation. These ethics bring self-discipline within the organisation and aims at reducing the risk and expenses. All the people working in an organisation are strictly required to follow these ethics and are imposed to a penalty in case of any failure. Employees are required to strictly required to focus on their defined roles for achieving higher efficiency.
Providing Quality Products
Quality products are a must for keeping the customers happy and satisfied. Ethics in business defines certain standards for the production of better products for customers. Businesses are required to use better technology and resources for manufacturing their products. They should not comprise with product quality and should meet the standards level set by these ethics.
Unhealthy competition in the market makes the condition worse for the existence of the small business. Every business should adopt fair market practices for healthy competition in the market. They should cooperate with their business partners and other business organisation existing in the market. Ethics in business focuses on that any business organisation does not aim at creating its monopoly in the market by exploiting other ones existing in the market.
Business ethics are not against the profit earning objective of business. The aims that business should not earn profit by unfair means. Businessmen should remain honest and not cheat its customers, investors and employees. Involvement in any fraudulent activities for raising profit should be avoided.
Good Employer-Employee Relations
Implementation of ethics in business makes the employer and employee relations better. These ethics ensure that business should not operate for its own growth only but also work for the welfare of its employees. All employees should be provided better and timely wages and salaries, proper working conditions and various other amenities. It helps in developing better relations and understanding among employer and employees.
Long Term Growth
Ethics in business focuses on the survival of business organisations for long term. Business cannot exist for long term if any of its operations leads to exploitation of its stakeholders. These ethics ensure that business works for the welfare of all its stakeholders and tries to achieve their support. With the support of all its stakeholders business can easily touch the height of great success and can continue its operations for the long-term.