relevance of business ethics in today's competitive environment and how business ethics lead to sustain in the market for a long behaving ethically leads to good leadership and good internal control system

1. Relevance of business ethics in today’s competitive business environment
(Parminder kaur)
1. Abstract
In order to survive and grow in the market, moral values is one thing which must be taken into
consideration along with the vision set up by the organization. In today’s era businesses are
growing because they are satisfying the needs of consumers in terms of technology, after sales
services etc. these happen because the organizations are in search of the first mover advantage
and react accordingly. As most are doing now a days every organization is working on the ethics
to be complied with by caring for the environment and their customers as well. In this regard,
alignment of business ethics and vision of the organization is a major factor which leads to the
growth of the organization. Ethics is a significant field that contributes to the increase in profits
and goodwill of the organization.
The aim of this paper to highlight the importance of ethics in the business environment. The
study is exploratory in nature with analyses
2. Introduction –
Business Ethics explains the guidelines about how an individual should morally judge a decision
about wrong and right. Business which is consumer oriented now a days should give ethics
topmost priority. The term ‘Consumer oriented business’ here can be more elaborated as the
business which is providing higher satisfaction in both qualitative as quantitative terms. The
business which is good in both terms will be able to survive in market. For example- A
pharmaceutical company XYZ is producing paracetamol containing norflex in it but has not
given disclaimer regarding the same so a person who is allergic to norlfex will not comfortable
and it will also increases his discomfort. Moreover in this case it is legalized for pharmaceutical
companies to give disclaimer regarding the same and also mention the composition from which it
has been made

2. Apart from legal aspects, business ethics also includes other responsibilities a business
should comply with. It can be in relation to environment or reduction in pollution or anything
which gives value to the society. For example – a business taking care that their manufacturing
will not increase in pollution and affect the people residing there. And despite all this they ensure
that their industrial waste should be recycled if possible and if not it should dumped properly. So
here the business is complying with all the ethics which will add value to their business and
increase their goodwill
Be it legal or moral responsibility, but in 21st century, it is essential to work upon the
ethics and it given a high priority. In an organization, usually work is divided and performed by
separate departments so the decision will also be taken by different departments for their own.
One who is making decision will decide according to the culture of the company In todays
competitive business world where there are a many factors to be considered in terms of
technology advancements, strengths, weaknesses, opportunities, threats, what their competitors
are doing etc, it can be quite difficult to keep one more major priority. But giving it a priority
will safeguard their reputation among the public and protect them from bad rumors created by
media and hence retaining the customers by satisfying their needs
It is not only that the customers will stick to our organization it will obviously give
benefit to the company. But the organization will also get benefited in terms of employees
because the workers will be given enough salary according to the work being done so they will
retain in the organization and moreover there will be more potential employees who want to get
employed in the organization. So with the efficient employees, goodwill and finally rising in
sales will ultimately lead to rise in future economic benefits in the organization and hence it will
help in achieving the vision of the organization.
As management guides other employees regarding the affairs of the company, so here
all comes to the management, when the management (top level) works ethically they can direct
their employees to work ethically is such a way that it benefits their personal needs as well as the
needs of the company and hence at last attaining the vision of the company. Afterwards the
employees will think what is the right path to move . Choosing a right path can lead to more hard
work as one might undergo with a bigger path , on the other hand one can go unethically in a
shorter path for earning huge short term profits. When the management and employees are

3. working ethically it creates good relationship among them which will lead to increase their
profitability and also share in the market
Along with the fact that how much the ethics are important to a business there is one
more factor that needs to be undertaken is corporate culture. In order to minimize the occurrence
of any scandal and to prevent unethical behavior in the organization it is necessary to have
corporate culture in the organization. When there will be informal session between the employer
and the employee their bond will become stronger. Keeping aside the informal meet conducted
then it comes to formal part where the vision of the organization is aligned with ethical
leadership, good corporate culture and environment responsibilities it will provide an advantage
to the company as a whole. This can be done by making promises to employee regarding
increment in their salary as and when required and justified, appreciating participation in the
formal meets in the organization. This all create a strong ethical culture in the organization
Ethical norms are never constant they keeps on changing. An act which is unethical in one
country might not be unethical in another country. For example – cow is worshipped as goddess
in India however in another countries it flesh is eaten by the people. They use to put that beaf in
burgers and buns and then take it. Ethical norms are affected by technology, culture, religion and
politics in that country. So these factors make an evaluation of what is ethical and to be done or
what is unethical and should not be done. Ethics are not developed by itself. It is done by the
interaction between the organization and society because it makes a common understanding
between the two and hence stimulates greater harmony in the society.
In order to behave everyone ethically one must ensure that all the employees in an
organization must know about what the ethics are, how will they give benefit to them as
personal, will following ethically path will lead to their achievement of individual visions and so
on. This all can be done by conducting various training programs in which the employees are
given satisfaction that if they work as stewards for the organization it will give benefits to them
on a individual level too. By giving an increment in the salary to deserving employees will prove
these type of statements. The organization’s internal system is the only thing that results in the
success or failure. Once the workers are assured that with working ethically for the organization
will help them too then along with the accomplishment of the vision of the company everyone
will be satisfied which will be very advantageous to the organization in the long run.

4. After the internal stakeholders the second thing which needs to be studied is protecting the
human rights of the people in which the organization is carrying on its production. It is always
better to understand the needs and perspectives of the stakeholders of the organization so that the
decisions which affect their interest should not be taken. For example- Anglo American is using
a SEAT process to get this work done at a local level. This toolbox will guide the managers of
the organization to assist that their decisions will not affect the community in which they are and
if yes their decision is impacting the community they change their decisions. Their main focus is
on stakeholder management. This enables them to better understanding the needs of their
stakeholders and work accordingly. It is very true that every organization continues its business
for making profit but it should be fixed that it will not be achieved at expense of social,
environmental and moral consideration. So protecting human rights, taking care of environment
should be first priority in order to make profits and thereafter moving towards the vision to be
attained by the organization
Erosion of ethics
According to Donaldson (1994) ethics can be from two views- relativist and universalist. Being a
relativist a person believes that wrong or right is judged on the basis of what is the situation
prevailing there and what the culture tells us to do and being a universalist a person believes that
wrong and right should be based on some fix standards ignoring the factor what the situation is
and whether culture supports it or not. So there is a conflict between the two which also creates
confusions in the minds of people who want to survive their business. Ultimately when there will
be conflict between the society itself, it will be hard for the organizations to take ethical
decisions
Globalization in an economy is a factor that leads to erosion of ethics specially in
developing countries. It. is nothing but a community that considers geographical boundaries be
just a political nuisance. This is done in developing countries because these are the countries
which are in need of foreign investments and possess a weak bargaining power among them.
And this attracts the unhealthy culture be entered and this all is done by a bidder who are indeed
of winning a project by hook or by crook. But this strategy to be given success or not is
completely in the hands of investors. If they do not participate in that corruption activity the
economies will not be having any element if corruption there and all will work ethically. Once

5. that unethical practice has been made it would be repeated again and again affecting the interest
of company as well as individuals.
3. Review of literature
In existing literature, several studies have been examined the need and relevance of business
ethics. The major sections which requires special focus in order to work ethically. How the ethics
can be taught and execute in an organization. What are the factors that motivate the employees to
work ethically. What is the role of the top management for behaving ethically and what are the
factors other than ethics that should be focused for achieving the vision of the organization. What
are the challenges faced regarding ethics
Kumar Babu G (2015) explains the ethics as a discipline to be maintained in students who are
indulged in medical profession either with doctor’s perspective or nursing perspective. In their
profession they are given with oaths and declarations in a form specified. The doctors are the
persons who are responsible for the lives of the public. Hence according to the author this
profession requires a huge level of ethics for saving the lives of people. It is explained that the
patient’s family possess a responsibility to the doctor. There are two areas in which a medical
student focus which are normative ethics and applied ethics. Moreover there should be morality
while taking another person’s sentiments. Hence saying truth and be moral are ethics, what the
society acknowledge and give definition is not considered as ethics
Shamas-Ur-Rehman-Toor George Ofori (2009) aligns ethical behavior with leadership. Top
level of the management and the senior management executives are the leaders of the company
who provide guidance to the whole organization must lead effectively and ethically. If they
behave unethically then this behave of managers. If managers want their organization to be
expanded globally and survive in the market in the long run then leadership is one thing that can
help them. When managers behave is rude and they don’t understand the problems of their
employees then obviously the employees will not feel free to ask managers everything and when
they don’t ask they will not available with how to perform a particular task which may lead to
arise in conflicts between the two and at the last level it will affect the company as a whole
which will give consequences in attaining the vision of the company.

6. Emett Emery (2016) mainly focuses on retail businesses that how unethical behavior affects the
small businesses do they need any change in their behavior. The sense of responsibility is here
given to the top level managers that behaving ethically should be their priority. When the ethical
behavior is aligned with leadership effectiveness and efficiency of the organization increases
substantially. When the behave is ethically it will give employees the environment that their
personal goals and company’s goals are not different and are aligned with each other this will get
the best out of their employees by increasing their productivity and when they give their full
level the organization will have better ideas in it and with this the competition can also be faced
and all goals will be achieved
Mehrdad Salehi (2012) believes that as the business is in need of technology advancements in
order to get first mover advantage ethical behavior is the only that can help them. In order to
have good internal control system within the organization is must be ensured that conflicts must
be less in the organization so that they focus on what they want to achieve and do their work
accordingly. It has also been stated that multinational companies which are growing are because
of their good corporate governance, corporate culture and corporate social responsibility.
However there are certain more challenges to them as compared to Indian companies because of
the rules and policies levied on them. But they ensure that there will be ethical behavior in the
organization so that employees would feel free to work in their environment
Hamid Saremi (2014) believes that there is no fix level of ethical behavior that company should
undertake. It depends on the management what level of responsibility they want to take in their
organization. Higher the level of ethics they want higher they need to get responsible for the
same. In today’s competitive environment the adults are more in deed of their personal motives
ignoring the ethics but it has been proved by other companies as well that if you want to survive
in the market for a long run then the ethics can’t be ignored.
4. Research objectives
i. To recognize the relevance of ethics in an organization
ii. To identify the alignment of ethics and leadership in the entity and how it helps in
achieving vision of the company
iii. To identify whether ethics fosters confidence among the employees or not.

7. 5. Need of the study
The topic ‘relevance of business ethics in today’s competitive business environment’ has been
taken so as to understand the importance of business ethics for continuing business. As the
businesses are growing day to day it becomes harder for everyone to survive in the market. If
one needs to stay there a strategy must be there which is behaving ethically. Apart from this
personal motive of earning profit the society in which the business is carrying on needs to be
cared. So what we morally provide to them is also a vast topic to be studied. While generating
revenues it should not be there that we are earning it at an expense of the environment.
6. Research methodology
This research is exploratory in nature and uses secondary data taken from other various articles.
The data has been collected from floridatechonline.com, ukessays.com,
Businesscasestudies.co.uk, Researchgate.net, linked in, pressureroom.ups.com, regent.edu,
amanet.org and many more
7. Analysis and interpretation
This research has been done in order to examine the relevance of ethics in business environment
that how ethics is the factor that is responsible for the growth or failure of the organization.
Several companies are their which are leader in their markets just because they take care of their
environment and behave ethically. Also there are companies which can’t survive in the markets
due to lack of ethics in them. Few companies are examined to get results
 Google- it is considered as one of the good companies in India which are performing
ethically. They started a Google green program in which the take care of environment so
that it won’t be affected. Under this program they have invested over $1 billion in order
to get renewal of the projects which are started with renewable resources. As resources
are scarce in nature, it is a very good step taken by the company in terms of ethics as
well as fulfillment of corporate social responsibility. Moreover while talking about their

8. human resources, they consider their human resources as their first priority and take care
of them by providing medical facilities to them and if they want to get consult with any
doctor anytime they can do so. They are provided with snack pantry and free legal
advice if they want. Above mentioned facilities were very few. There are many other
facilities provided to them. This company can be seen as best example for working
ethically
 Microsoft – it is the best company in America that retain their employees as they are
real gems for the company. They are given free medical care premiums and other perks
which are required. These perks depend upon the needs of the employees. Some might
be in need of financial perks like increment in salary and some might be in need of living
perks etc. Apart from their human resources they are contributing around $1 billion in a
year to non- profit organization and other charitable institutions. As their employees are
very crucial to them they keep on motivating other students to enter the industry by
organizing various seminars to them.
There are certain companies which did not behave ethically and this unethical behavior badly
affected their financial position.
 Enron – Enron was a company established in North America and it was the largest
company which was providing natural gas, even they are providing electricity to US as
well. The company at that time claimed that their financial position is stable but is actual
it was not. The fraud was occurring from the years but since there was lack of ethics so it
was not detected. There were many reasons for the scam like lack of truthfulness, conflict
of interest. The employees were giving surety that there will be increment their salary but
in actual the financial position was so unstable that their share went down and when fraud
was detected the company felt a shocked and went bankrupt. This bankruptcy was a
shock to the whole country. Due to this scam there was an act called Sarbanes Oxley act
was introduced in order to protect the interest of shareholders.
 Bernard Madoff – Madoff was a well known person in field of finance. The scheme
‘Ponzi scheme’ was started by him claiming that the investors will be earning high profits
with low risk. This was quite doubtful to the investors, other competitors and other

9. persons who are expertise in finance. But this scheme proved to be very profitable as
Madoff was paying to the existing shareholders the amount he demand from various
other new investors. But this came to an end where it became hard to find new more
investors and the existing shareholders were demanding for their money back along with
interest. As these all conflicts occurred the scam was detected madoff was given
imprisonment for 150 years. In that case also Madoff was not performing ethically so that
company was out of the market.
8. Findings and conclusions
The companies who are performing ethically have a secure stay from the perspective of
societal respect and they survive in the long run in the market. Their customers are stick to the
organization which not only help the organization in their vision but also they can give
satisfaction to their employees. Employees are the assets of the organization which help them to
survive in market. If they satisfy their employees there will be good internal control in the
organization. The more internal stakeholders will be satisfied the more they will work hard. The
more they will work hard the more there will be goodwill of the organization. More the
goodwill more will be the sales and hence more profitability and vision of the company will be
achieved
In this world of increasing competition it is very essential for every company to survive in
the market in order to increase their profitability. For increasing their profitability it must
require the trust of customers.
9. References
1. Stephanie yang (2014) Bernie madoff imprisonment for the fraud he occurred and
importance of ethics while continuing business
2. Karan berman and joe knight (2009) too good to be true and relevance of ethics
3. Will Kenton (2018) ethics erosion and relevance of ethics in the business
4. Lauren Jefferson (2017) how ethics impact the financial position of the company. Good
ethics return good profits
5. Mintel press team (2015) customers would not stick to the organization if they are
performing unethically

10. 6. Tim hunt (2018) companies which are doing in terms of ethical behaving and respect for
the society
7. Linda K Trevino (2008) ethical and unethical conduct in work organizations
8. Anthony shields (2013) companies with ethical corporate policies and companies which
are not indulge in ethical culture
9. Hamid saremi (2014) Islamic azad university quchan branch – role of ethics in
management of organization
10. Behrad moien nehzad (2013) Islamic azad university quchan branch- role of human
resources in ethics and ethical leadership
11. Brealey, R., Myers, S. and Allen, F (2011) necessity of attention to ethic and its
management in organization
12. Emett emery (2016) walden university – ethical behavior, leadership and decision
making in an organization
13. David Harrison (2013) university of texas, Austin – the ethical reasoning abilities
14. George ofori (2015) national university of singapore - role of ethical leadership in
profession
15. Mehrdad salehi , mojtaba saeidinia, mohammadareza aghaei (2012) management and
science university Malaysia – business ethics