Business Ethic Notes

Business Ethics.

Ethics are the moral principles that should underpin decision making. A decision on ethical grounds might reject the most profitable solution in favour of one of the greater benefit to society as well as the firm.

Among the important ethical consideration in business are: dealing honestly and fairly with customers. protecting the environment through action such as the use of sustainable sources of raw materials. dealing with bullying, harassment and discrimination within the organisation. the provision of accurate financial and other numerical information. anti-competitive practices. testing products on animals and similar production issues. whistle blowing on unethical practices within the business. 

Ethics can be defined as a code of behaviour considered morally correct. Our individual ethics are shaped by a number of factors, including the values and behaviour of our parents or guardians, those of our religion, our peers, and the society in which we live and work.

A useful starting point may be to consider business objectives in relation to ethical behaviour. We can pose the question 'why do businesses exist?' For many businesses the answer would be to make the maximum profit possible in order to satisfy the owners of the business.

Every era witnesses a series of ethical crises for companies- individually or collectively.

Yet the picture isn't entirely bleak. In 2009 Cadbury became the world's first major chocolate company to convert all sourcing of a major brand to fair trade, when bars of daily milk started to show a new logo.

An example of an ethical code of practice is:To meaningfully contribute to local, national and international communities in which we trade, by adopting a code of conduct that ensures care, honesty, fairness and respect. 

As a response to consumer expectations and competitive pressures, businesses have introduced ethical codes of practice. These are intended to improve the behaviour and image of a business.

A typical code might include: personal integrity - in dealings with suppliers and in handling the firms resources. corporate integrity- such as forbidding collusion with competitors and forbidding predatory pricing. environmental responsibility- highlighting a duty to minimize pollution emissions and maximize recycling. social responsibility- to provide products of genuine value that are promoted with honesty and dignity.

Advantages of ethical behaviour: Marketing advantages Public relations advantages Positive effects on the workforce Disadvantages of ethical behaviour: Reduced profitability

It has been suggested that most of the interest in business ethics and its development has been in universities and colleges. A number of arguments can be set out to support the view that ethics will be increasing importance to businesses throughout the world.The adoption of ethical practices:Recent studies show that over 80% of the major businesses in the UK have implemented an ethical code of practice.The commercial success of high-profile 'ethical' companies:Companies that are seen to have high ethical standards have enjoyed considerable commercial success over recent years.

New Page