DEFINATION OF ETHICS
Ethics deals with moral principles and social values.
It helps us to classify, what is good and what is bad?
It tells us to do good things and avoid doing bad things.
Ethics separate, good and bad, right and wrong, fair and
unfair, moral and immoral and proper and improper human
Ethics means a code of conduct.
It tells a person how to behave with another person.
The ethics of business is the ethics of responsibility.
THE VALUE OF ETHICS IN BUSINESS
Organizations that support ethics initiatives consistently
show more productivity and employee retention than
organizations that consider corporate ethics merely an
issue of compliance.
A company that conducts business in an ethical manner
engenders respect from within the company and from
Employee retention is high at companies that promote
Consumers demonstrate brand loyalty to companies that
exhibit a strong sense of corporate responsibility and
Business Ethics “WHAT?
Business ethics is the application of social and
individual moral values upon business decisions.
Business ethics are the moral values and principles
set forth for a company or market.
Business Ethics “WHY”?
When a business does not have ethics in it's everyday work
atmosphere, the long lasting effects can be disastrous and
often times, even fatal, to that business.
Ethics keep you moral and legal. Second, because an
ethical business will get more customers. If you are
suspected of cheating your business may be affected.
Business ethics tries to set rules where
money is the only ruler.
The purpose of a code of ethics is to set
out what behavior and actions are
considered good and which ones are
considered bad. Ethics provides a guide
Principal of Business Ethics
Customers want to do business with a company they can trust; when trust is at the
core of a company, it's easy to recognize. Trust defined, is assured reliance on the
character, ability, strength, and truth of a business.
Keep An Open Mind:
For continuous improvement of a company, the leader of an organization must be
open to new ideas. Ask for opinions and feedback from both customers and team
members and your company will continue to grow.
Regardless of the circumstances, do everything in your power to gain the trust of
past customer's and clients, particularly if something has gone awry. Reclaim any
lost business by honoring all commitments and obligations.
Have Clear Documents:
Re-evaluate all print materials including small business advertising, brochures, and
other business documents making sure they are clear, precise and professional.
Most important, make sure they do not misrepresent or misinterpret.
Become Community Involved:
Remain involved in community-related issues and activities, thereby demonstrating
that your business is a responsible community contributor. In other words, stay
Maintain Accounting Control:
Take a hands-on approach to accounting and record keeping, not only as a means
of gaining a better feel for the progress of your company, but as a resource for any
"questionable " activities. Gaining control of accounting and record keeping allows
you to end any dubious activities promptly.
Treat others with the utmost of respect. Regardless of differences, positions, titles,
ages, or other types of distinctions, always treat others with professional respect
FEATURES OF BUSINESS ETHICS
Code of conduct :
Business ethics is a code of conduct. It tells what to do and what not to do for the welfare
of the society. All businessmen must follow this code of conduct.
Based on moral and social values
Business ethics is based on moral and social values. It contains moral and social
principles (rules) for doing business. This includes self-control, consumer protection and
welfare, service to society, fair treatment to social groups, not to exploit others, etc.
Gives protection to social groups
Business ethics give protection to different social groups such as consumers,
employees, small businessmen, government, shareholders, creditors, etc.
Provides basic framework
Business ethics provide a basic framework for doing business. It gives the social cultural,
economic, legal and other limits of business. Business must be conducted within these
Business ethics must be voluntary. The businessmen must accept business ethics on
their own. Business ethics must be like self-discipline. It must not be enforced by law.
NEED OR IMPORTANCE OF BUSINESS ETHICS
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.
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.
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
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.
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
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.
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.
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
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.
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
criticised by the society. The society will always support those businessmen who
follow this necessary code of conduct.
BUSINESS ETHICS (DO’S)
Exhibit a high level of morality and fairness in all the action.
Protect people against discrimination.
Take actions in good faith.
Comply with all guidelines relating to disclosures under various acts and
Maintain secrecy in confidential matters.
Be a trustworthy co-worker.
BUSINESS ETHICS (DO’S)
Comply with service rules.
Adhere to company systems and procedures.
Be honest in attendance and punctuality.
Quote correct amount while filing claims.
BUSINESS ETHICS (DON’TS)
Exhibit partiality and favoritism in performance appraisals.
Steal credit of good work from team.
Take conflicts outside.
Overlook safety and health rules.
Give and take bribe/ gifts in violation to Company policy.
Business ethics reflects the philosophy of business.
One of the aim of Business ethics is to determine the fundamental purposes of a company.
When a business does not have ethics in it's everyday work atmosphere, the long lasting
effects can be disastrous and often times, even fatal, to that business.
A company's ethics will determine its reputation.
Good business ethics are essential for the long-term success of an organization.
Implementing an ethical program will foster a successful company culture and increase
A company's ethics will have an influence on all levels of business.
It will influence all who interact with the company including customers, employees,
suppliers, competitors, etc.
All of these groups will have an effect on the way a company's ethics are developed.