Meaning of 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 for 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 improves its goodwill in the market. Scope of business ethics can be described as given below:
Scope of Business Ethics
Ethics in Compliance
Business ethics play an efficient role in the compilation of business activities with legal rules and regulation. It ensures that business adheres to all established laws and any of its operations don’t go unlawful. It reduces any chance of facing any unfavourable action by authorities like payment of fines and penalty. Business following ethics in their operations frames strategies and policies in accordance with established rules and regulations. All activities are monitored and ensured that they go in accordance with framed policies.
Ethics in Human Resource
Human resources are the key element of every business and have an important role in its success. Ethics helps in improving the employer-employee relations and overall productivity of the business. Ethics related to human resource are introduced and implemented by Human resource management in business. HRM covers all ethical issues related to employer-employee affecting their relationship.
The various issues covered are Discrimination issues, sexual harassment, employee’s privacy issues, salaries and wages issues, safety and health issues. Ethics aims at overcoming all these issues so that employees are happy and motivated towards their roles. This booms the overall performance and reduce the risk.
Ethics in Finance
Finance is a crucial part of every business and is needed for its successful operations. Finance should be properly managed by every business otherwise it may have adverse effects. Ethics aims at controlling and handling all finance issue faced by companies and employees. The various ethical issues included are accounting related like window dressing and improper window dressing, insider trading, fake reimbursements, overbilling, bribery, kickbacks etc.
Ethics in Production
Ethics in business helps in monitoring and controlling the overall production activities. It ensures that production processes do not adversely affect the business. Ethics frames production policies by considering organisation goals, objectives and various environmental factors.
Attempts are made to minimise the degree of risk and danger. The various ethical issues covered are defective and dangerous products, environmental ethics and pollution issues, Issues arising out of new technologies and product testing issues. Implementation of ethics controls these issues and fosters overall productivity.
Ethics in Marketing
Marketing is an important part of every business organisation. It is the means through which it improves the sales and profitability of the business. Marketing practices should be ethical and should avoid the adoption of any unfair means.
Implementation of ethics ensures that all marketing programmes are moral-ethical. The various ethical issues covered are pricing issues like price discrimination and price skimming, misleading advertisements, black marketing, anti-competitive practices, wrong advertisement content etc.