Role of ethics in business |
Ethics are the amalgamation of moral principles that have evolved over a period of time. These are essentially regarded as something present for common good. But is it good for a business? Ethics are often considered to be the very anti-matter to profitability in business. Is it true? We shall be exploring ethics, the historical influence of businesses on shaping of ethics, the issues related to ethics and examining how each of them affects business in this paper on the subject. A brief conclusion also ensues towards the end of the study.
Businesses are artificial entities with a monetary vision and hence cannot have ethics of their own. It is only the people involved in the process who possess it. Thus, it can be said that businesses assume the ethics of the people who run it. Initially during the boom of business enterprises i.e. during the industrial revolution, the businesses were largely owner driven and hence the owners drove the ethical values of the business. During this period there was no need to codify the ethical values as the owner himself was running the business. However, the businesses grew over a period of time and the owners had to employ people to run the business. The advent of the joint stock companies brought in a new dimension to the business. The ownership and management was separated. This set the stage for codification of ethical practices. These ethical values became the prescription or rather an instruction sheet from the owners to the managers of the company.
Role of ethics in business :-
- Leadership and management of the company : The leadership and management of a company set the atmosphere of operations in the company. Their philosophy is adopted by the employees of the company right to the very bottom rung. Creating an ethical and trustworthy environment helps in attracting and retaining valuable talent. It also keeps the working atmosphere healthy so that everyone can thrive in it. Employees get a sense of accomplishment from the work that they do.
- Employees and teams : Ethical practices build more trust and cohesion amongst employees of the company. This greatly affects their productivity. And in turn, greatly improves the company’s profits.
- Community and Investors : Research shows that a company known for its good practices is always favored by consumers above other cheaper competitors. Consumers find business known for their good practices to be trustworthy. Investors, one of the key components in the running of a business, are greatly influenced by a company’s image and their ethics. It is a common phenomenon that whenever a company comes in the limelight for mal-practices, market shares are the first to plummet.
- Corporate Social Responsibility : A part of good business ethics, CSR has been found to greatly benefit a company’s profits and shares. CSR is an exhaustive and effective business practice, a key feature of all sustainable and successful business models around the globe.
– In today’s situation with immense pressure and competition, business and ethics can’t go together.
– A couple of times because we follow ethics, it hinders us from succeeding because it squanders time.
– Ethics are usually bound and nurtured by religion, family values etc. Such forms cannot work well in business where you are expected to be professional and practical.
– A businessman should know how to handle pressure, stress and competition and not how to be ethical.
– We all want to make quick money. In today’s market, being ethical takes a toll on you.
– Ethics unlike a balance sheet don’t have visibility. People today judge you based on money and not ethics.
– Ethics makes you stronger and independent. People can’t deceive you easily.
– Not following ethics makes you a selfish person.
– There is nothing wrong in making profit. But, making profit by unethical means could cost a lot of people harm, mentally.
– Customer’s perspective is to link with a company with ethics and values. They know that will never be forged.
– Being ethical in business creates a sense of responsibility towards society.
Morals and values are extremely individualistic. It’s incorrect to say that you can’t succeed if you are ethical in business. You will probably take some more time to succeed. You can’t force someone to follow ethics.
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