Also known as corporate ethics
It is a form of applied ethics or professional ethics, that examines ethical principles and moral or ethical problems that can arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and entire organizations.
These ethics originate from individuals, organizational statements or from the legal system. These norms, values, ethical, and unethical practices are what is used to guide business. They help those businesses maintain a better connection with their stakeholders.
1. Stop business malpractices
Some unscrupulous businessmen do business malpractices by indulging in unfair trade practices like black-marketing, artificial high pricing, adulteration, cheating in weights and measures, selling of duplicate and harmful products, hoarding, etc. These business malpractices are harmful to the consumers. Business ethics help to stop these business malpractices.
2. Improve customers’ confidence
Business ethics are needed to improve the customers’ confidence about the quality, quantity, price, etc. of the products. The customers have more trust and confidence in the businessmen who follow ethical rules. They feel that such businessmen will not cheat them.
3. Survival of business
Business ethics are mandatory for the survival of business. The businessmen who do not follow it will have short-term success, but they will fail in the long run. This is because they can cheat a consumer only once. After that, the consumer will not buy goods from that businessman. He will also tell others not to buy from that businessman. So this will defame his image and provoke a negative publicity. This will result in failure of the business. Therefore, if the businessmen do not follow ethical rules, he will fail in the market. So, it is always better to follow appropriate code of conduct to survive in the market.
4. Safeguarding consumers’ rights
The consumer has many rights such as right to health and safety, right to be informed, right to choose, right to be heard, right to redress, etc. But many businessmen do not respect and protect these rights. Business ethics are must to safeguard these rights of the consumers.
5. Protecting employees and shareholders
Business ethics are required to protect the interest of employees, shareholders, competitors, dealers, suppliers, etc. It protects them from exploitation through unfair trade practices.
6. Develops good relations
Business ethics are important to develop good and friendly relations between business and society. This will result in a regular supply of good quality goods and services at low prices to the society. It will also result in profits for the businesses thereby resulting in growth of economy.
7. Creates good image
Business ethics create a good image for the business and businessmen. If the businessmen follow all ethical rules, then they will be fully accepted and not criticized by the society. The society will always support those businessmen who follow this necessary code of conduct.
8. Smooth functioning
If the business follows all the business ethics, then the employees, shareholders, consumers, dealers and suppliers will all be happy. So they will give full cooperation to the business. This will result in smooth functioning of the business. So, the business will grow, expand and diversify easily and quickly. It will have more sales and more profits.
9. Consumer movement
Business ethics are gaining importance because of the growth of the consumer movement. Today, the consumers are aware of their rights. Now they are more organized and hence cannot be cheated easily. They take actions against those businessmen who indulge in bad business practices. They boycott poor quality, harmful, high-priced and counterfeit (duplicate) goods. Therefore, the only way to survive in business is to be honest and fair.
10. Consumer satisfaction
Today, the consumer is the king of the market. Any business simply cannot survive without the consumers. Therefore, the main aim or objective of business is consumer satisfaction. If the consumer is not satisfied, then there will be no sales and thus no profits too. Consumer will be satisfied only if the business follows all the business ethics, and hence are highly needed.
11. Importance of labour
Labour, i.e. employees or workers play a very crucial role in the success of a business. Therefore, business must use business ethics while dealing with the employees. The business must give them proper wages and salaries and provide them with better working conditions. There must be good relations between employer and employees. The employees must also be given proper welfare facilities.
12. Healthy competition
The business must use business ethics while dealing with the competitors. They must have healthy competition with the competitors. They must not do cut-throat competition. Similarly, they must give equal opportunities to small-scale business. They must avoid monopoly. This is because a monopoly is harmful to the consumers.
Emerging Business Ethics Issues
Being the most important element of a business, stakeholders’ main concern is to determine whether or not the business is behaving ethically or unethically. The business’ actions and decisions should be primarily ethical before it happens to become an ethical or even legal issue. “In the case of the government, community, and society what was merely an ethical issue can become a legal debate and eventually law.”112 Some unethical issues are:
1. Fairness The three aspects that motivate people to be fair is; equality, optimization, and reciprocity. Fairness is the quality of being just, equitable, and impartial.
2. Misuse of company’s times & Resources This particular topic may not seems to be a very common one, but it is very important, as it costs a company billions of dollars on a yearly basis. This misuse is from late arrivals, leaving early, long lunch breaks, inappropriate sick days etc. This has been observed as a major form of misconduct in businesses today. One of the greatest ways employees participate in misuse of company’s time and resources is by using the company computer for personal use.
3. Consumer Fraud There are many different types of fraud, namely; friendly fraud, return fraud, wardrobing, price arbitrage, returning stolen goods. Fraud is a major unethical practice within businesses which should be paid special attention. Consumer fraud is when consumers attempt to deceive businesses for their very own benefit.112
4. Abusive Behavior A common ethical issue among employees. Abusive behavior consists of inflicting intimidating acts on other employees. Such acts include harassing, using profanity, threatening someone physically and insulting them, and being annoying.113
Definition: Business ethics, connotes the form of applied ethics, which studies ethical principles, morals and problems that take place in the business environment. It is nothing but the integration of day to day morals and ethical norms to business and applies to all types of business.
In finer terms, it implies the good or bad, right or wrong behaviour, in pursuing business, determined on the basis of expected behaviour approved by the society. E.g. Charging reasonable prices from customers, just and fair treatment to workers, earning a legitimate profit, providing a good environment to employees, etc.
Salient Features of Business Ethics
• It is the ethical standards which regulate business persons in performing business activities.
• It is both science and art.
• It relies on theological principles like good behaviour, sincerity, welfare of society and so on.
• It is universally applicable.
• It is based on social customs existing in the environment.
• It is dynamic in nature and constantly test the norms and moral principles.
Business ethics is concerned with the attitude of the businessperson in conducting business, by inculcating morality in his business. It propagates welfare of society, increases profitability, improves productivity and foster business relationship.
Need for Business Ethics
• Stop business malpractices
• Safeguarding consumer’s rights
• Gain confidence of customers
• Survival and growth of business
• Creating goodwill
• Healthy competition
• Consumer satisfaction.
• Building strong relationship with customers and clients
These are the set of principles and practices; that determine acceptable behaviour in the business organisation. It guides the managers and other executives in taking everyday business decisions. It stresses on the impact of the business decision on the stakeholders, such as employees, consumers, government, society, investors, shareholders and so on.
Elements of Business Ethics
1. Formal Code of Conduct: Those organisations which undertake to inculcate ethical conduct in the business organisation, establish and implement the code of conduct, for their employees and members. These codes are the statement of organisational values.
2. Ethics committee: There are many organisations, which create the ethics committee, which is especially dedicated to maintaining ethics in the organisation. Such committees raise ethical concerns, develops and update the code of conduct, settle down ethical dilemmas, in the organisations.
3. Ethical Communication: Another major component is the development of an effective ethical communication system, which has a great role to play in making the ethics programme successful. It tends to educate employees regarding the ethical standards and norms of the organisation.
4. Ethics office: The next step, is the setting up an ethics office, to communicate and enact policies among various members of the organisation.
5. Disciplinary system: A disciplinary system should be formed, so as to handle the ethical contravention quickly and severely.
6. Ethics training programme: Another important aspect, is the ethics training programme, in which the employees of the organisation undergo training, and learn ethical norms of the company.
7. Monitoring: An ethical programme is considered successful and fruitful only when an effective monitoring committee, is created which looks after various processes and controls deviations.
The life of the business greatly depends on the ethics established and followed by the businessman and unethical practices pose a threat to the survival and growth of the business. Being ethical in business creates a positive reputation, that opens various opportunities for profit. Further, the techniques adopted to pursue business goals should also be pure, i.e. lawful, because the objective of business cannot be attained if it employs unfair means.
WHAT EMPLOYERS SHOULD DO TO PREVENT & CORRECT SEXUAL HARRASSMENT
1. Adopt a clear sexual harassment policy.
Employers should adopt a policy devoted to sexual harassment in the employee handbook.
That policy should:
• define sexual harassment
• state in no uncertain terms that you will not tolerate sexual harassment
• state that you will discipline or fire any wrongdoers
• set out a clear procedure for filing sexual harassment complaints
• state that you will investigate fully any complaint that you receive, and
• state that you will not tolerate retaliation against anyone who complains about sexual harassment.
2. Train employees.
Employers should conduct training sessions for employees. These sessions should teach employees what sexual harassment is, explain that employees have a right to a workplace free of sexual harassment, review your complaint procedure, and encourage employees to use it.
3. Train supervisors and managers.
Employers should conduct training sessions for supervisors and managers that are separate from the employee sessions. The sessions should educate the managers and supervisors about sexual harassment and explain how to deal with complaints.
4. Monitor your workplace.
Employers are encouraged to get out among his employees periodically. Talk to them about the work environment. Ask for their input. Look around the workplace itself. Talk to his supervisors and managers about what is going on. Keep the lines of communication open.
5. Take all complaints seriously.
If someone complains about sexual harassment, act immediately to investigate the complaint. If the complaint turns out to be valid, your response should be swift and effect.
6. Have a universally known, 100% safe reporting mechanism.
A universally known, easily accessible – and absolutely safe – place to report should be established. It could be a hotline, a section of a website, a unit in HR… whatever mechanism feels appropriate for a given culture. It doesn’t really matter what it is so long as there is one and it’s run with fairness, thoughtfulness and integrity. And it’s the job of the CEO, and all managers, to promote awareness of it.
7. Prevent Retaliation
Many victims of sexual harassment are cautious of coming forward with their complaint because of fear of retaliation by the harasser.
It is important for employers to remind all employees that retaliating against someone for filing a sexual harassment claim is not only wrong, it’s against the law.
Also, when employees chose to carry out plans of vengeance, it can both expose your company to liability and encourage the harassers.
8. Ensure That All Upper-Level Employees Attend Anti-Harassment Workshops
Doing so will help to ensure that the management has a clear and uniform understanding about this harassment and how to go about handling situations that may arise.
9. Keep Your Office Parties “PG” Rated
Everyone loves getting together and cutting loose for a fun time with their colleagues. Throwing summer picnics and get-togethers can be great for boosting the team morale However, it may be a good idea to remind employees about prohibited sexual behaviors. Having a meeting before the event to review the sexual harassment policy and the office dress code can be a nice way to ensure all of your employees have recently heard the policies and know what is and isn’t acceptable.
10. Encourage Consensual Agreement Forms for Office Romances
Also known as “love contracts,” these forms are signed by the participants of the romantic relationship to ensure that both parties have entered the relationship willingly. Although there is some controversy over these contracts, they help to protect both the company as well as both parties involved. The forms ensure that no one is being pressured into the relationship, therefore preventing future cries of sexual harassment. Here is an outline of what your consensual agreement should acknowledge:
• That the relationship is consensual.
• That they understand and have received a copy of the company’s sexual harassment policy.
• That they understand that they cannot be in a direct report/supervisor role of the other individual.
• That if the relationship should end, they will not do anything work related to retaliate .
Mr. McCoy and his friend Stephan had been preparing for over six years for an excursion and mountain climb in the Himalayas near Nepal. Thousands of dollars had been spent on this endeavor and the approach to the area they wished to climb had already been a three month effort on foot.
At an extremely challenging part of the climb, the group comes upon a stranded, ill-clothed ‘holy man’, a Sadhu – who was in desperate need of help. The group, and thereby each individual within the group, were faced with the unfortunate dilemma that stopping the climb to help the fellow (which in and of itself may not be successful) would destroy the climb attempt thus wasting years of time and resources.