Ethics is a term that never found a rigid definition in business environment. In general ethics are simply the guidelines that differentiate between the right and the wrong. But, on broader terms there is nothing known as universal right and nothing is universally wrong. Right for one is wrong for another and vice-versa. For example eating non vegetarian food is unethical in many countries but in many other countries it’s a normal course of food. Now, non vegetarians can’t say that it’s wrong to be vegetarian and similarly vegetarians can’t put the non vegetarian people behind the bars just for eating the non vegetarian food.
So, ethics is all about values and believes and it’s true that we can never set the ethical guidelines by using the legal protocols. Despite of this fact, ethics are very important to consider in business environment, because human beings can cross all the limits just for the sake of earning more profits.
Using the simplest words we can say that business ethics define a set of principles that a business man should always follow. Some unethical practices in modern day business are corrupting, stealing, cheating, bribing, lying, despite advertising etc. To follow the business ethics, it’s very important for the businessmen to firstly be aware of what is “business ethics”, so that they can contribute in sustainable development of entire world.
Importance of ethics in business
Business in itself is just a subsystem of society. So, everything that businesses undertake certainly put impact upon the whole society. A social system feels the impact due to any of the following:
• The way in which the business operates
• The organizational structure of business
• New innovations
• Transmission of information
These business activities put direct or indirect impacts upon the social system. A business find following responsibilities:
• Responsibility towards society
• Responsibility towards shareholders
• Responsibility towards employees
• Responsibility towards consumers
• Responsibility towards community
• Responsibility towards environment
The guidelines of business ethics define the protocols to play these responsibilities with full care and concern.
Important ethical practices that should be followed by a business-
• No businessman should cheat or deceive the consumers by selling them the defective products. For example- many textile merchants usually sell their defective stock by giving huge discounts to the customers.
• Marketers should not use deceptive advertisements just to sell their product. For example- advertisements of automobiles and cosmetics usually hinder much of information from target audience.
• Businesses should not get indulged in activities that report unhealthy competition.
• Business should not try to destroy the image of competitors through unfair methods, for example- soft drink companies always try to dilute the brand of their competitors through aggressive advertisements.
• Accurate business records should be maintained, so as to develop transparency for the shareholders, for example- Mr. Raju Ramalingam of Satyam published false information to shareholders.
• Organizations should never ignore tax, debt and other liabilities.
• Organizations should make sure that they are paying minimum wages to all workers and adhering to the prescribed labor laws.
Few suggestions to comply with business ethics
• Trade associations should develop some common guidelines to be followed by all members.
• Business leaders can set examples and make other follow by gaining the social value.
• Government should spread awareness about ethical concerns.
• Management and ownership should be different, so that profit maximization don’t cross ethical limits.