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The Need for Business Ethics

The Need for Business Ethics

Every individual should be guided by certain code of conduct. Ethics deal with personal conduct and moral duty and concerns human relations with respect to right and wrong. In business, ethics is doubly important and the society expects the businessmen to act ethically. Business ethics adds to the image of the company and develops a sense of trust in the minds of people and a  long lasting relationship that is to stay. If the businessmen act ethically there is no need for legal rules and regulations that govern the code of conduct. Most of today’s businessmen want to make a fast buck and does not have business ethics.

Business ethics

Benefits of Business Ethics

1. Creates Credibility

2. Helps in ethical decision making

3. Enhances quality of living

4. Corresponds to basic human needs

Business ethics is primarily concerned with the relationship of business goals and techniques to specifically human ends. It is a dynamic philosophy of socio-economic adjustments whose field is widening day by day.

Definition of Business Ethics:

  • Typical definitions refer to the “rightness or wrongness of behavior, but not everyone agrees on what is morally right or wrong, good or bad, ethical or unethical.”
  • “Application of general principles of ethic customary in a society to the areas where business operates.”
  • In the words of T.M.Garrett, “business ethics is a study of moral rightness and wrongness of the acts involved in the production, distribution and exchange of economic goods and services.”

 Elements of Business Ethics:

· It should be above business interests-no harm should be done to the society

· It is more of a code of business behavior

· It has responsibilities as roots and outcome as fruits

· It is guided not by sentiments and emotions but by definite tenets

· It has to be followed by one’s own will and cannot be enforced upon

· It cultivates high sense of honesty, general welfare, justice and responsibility in the minds of businessmen

· It emphasizes the importance of self discipline over external control by legislation. The businessmen should not make false promises which destroy the fair image of the business.

Principles of Business Ethics:

· Do not sell substandard or defective products or stick to under measurement

· Do not resort to hoarding, black-marketing or profiteering

· Do not destroy or distort competition

· Ensure accuracy and sincerity in advertising, labeling and packaging

· Do not tarnish the image of competitors by unfair practices

· Make accurate business records available to all authorized persons

· Pay proper taxes and satisfy other obligations

· Do not form cartel agreements to control production, price etc. to the common determinant

· Refrain from secret kick backs or pay-offs to customers, suppliers, administrators, politicians etc.,

· Ensure payment of fair wages to and fair treatment of employees

· Fulfill honestly all responsibilities towards the organization. Owners, employees, consumers, suppliers, government and society at large.

The most common unethical practices being followed would be:

1. Adulteration

2. Spurious products

3. Duplicates

4. Injurious products

5. Defective Advertisements

6. Low salaries

7. Poor working Conditions

8. Exploitation- Sexual harassment and bullying, use of child labor

9. Financial misconduct-Employees being made to sign for more than actually paid for

10. Tax evasion- Improper records or bogus records to show hiked up profit in the p&l

11.  Pollution

12.  Bribes and circulation of money to buy political support- The notoriously popular 2G scam

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