What is Business Ethics?
Ethics are a set of principles that help in differentiating between what is morally right and what is morally wrong. Business ethics and values are the moral principles that a business uses in daily transactions.
They help to prevent ethical issues that may arise in the day-to-day running of operations, such as insider trading, corporate governance, bribery, discrimination, corporate social responsibility and fiduciary responsibilities.
In this article, we will be learning about the concept of business ethics and values, features of business ethics, objectives of business ethics, and the concept of values in business You will also learn about the impact of globalisation on business ethics.
Features of Business Ethics
These are the following features of business ethics:
Based on Moral Values
Business ethics are based on the guiding values related to the functioning of a business.
Business ethics are not universally applicable to all situations; they deviate from one person to another. For example, the ethics followed by Microsoft may be totally different from the ethics followed by Apple.
Both Objectives and Means
Business ethics segregate between fair and unfair. They make sure that the means opted for satisfying objectives are rational and justified.
Business ethics emphasize that a business has a social responsibility to guard the interests of all its stakeholders.
More than Law
Business ethics cannot be enforced by law. They must be acknowledged as self-discipline
Objectives of Business Ethics
Some general objectives of business ethics are:
- Same Rules and Regulations for Everyone
- Clear Communication of Policies to Everyone
- Value Employees
- Prepare Policies That are Employee-centric
- Evaluate Employee Fairly
Same Rules and Regulations for Everyone
If the organisation’s rules and regulations are fair and universally applicable to everyone, irrespective of their status or salary, then employees are highly motivated. For example, all members of an organisation should be punctual.
Just because someone is a manager, he/she should not be allowed to come to the office late even if his/her team is working on his/her behalf.
Clear Communication of Policies to Everyone
The policies must be made transparent at all levels of the hierarchy.
The rules and regulations should be flexible to allow employees to have a good work and life balance. For instance, insisting an employee attend the office even if he/she has a medical emergency at home is unethical.
Managers often lure employees with rewards or threaten them with job insecurity to pressurise them to work even when they are on vacation, during weekends, or for longer hours. This generates considerable dissatisfaction among employees.
Some companies even hold their employees’ salaries when things are not going well. This practice should be avoided and employees’ salaries must be cleared at the earliest.
Prepare Policies That are Employee-centric
The Human Resource department should ensure that proper policies for staff are prepared and implemented. A holiday calendar should be prepared and employees should be allowed to enjoy the festivals with their families.
The culture to expect employees to work even on leaves should be discouraged, as it builds resentment among the staff, which does not benefit the work at all.
Evaluate Employee Fairly
Everyone in an organisation gets cautious at the time of performance evaluation. Their performance will determine if their jobs are secure, get a promotion, or a salary hike. Some managers might expect flattery to get good grades.
Although they will say that they never asked their staff for this type of behaviour, who does not like flattery? Ethical managers are those that evaluate an employee fairly on the basis of his/her performance without any bias.
Advantages of Business Ethics
The advantages of business ethics are as follows:
- Satisfy basic human needs
- Cultivate a good public image
- Prevent business malpractices
- Improve customers’ confidence
- Safeguard consumers’ rights
- Protect stakeholders
- Gain a competitive edge
- Develop good industrial relations
- Give confidence to employees that they are working for a fair and ethical business
- Unite employees and leaders on common goals or mission
- Improve decision-making as decisions will be founded on values
- Sustain long-term growth.
Values in Business
Values in business are the essential principles that guide the business in its day-to-day transactions. They establish what the business stands for and why it stands out. For instance, if innovation is a core value for a business, then that organisation will invest heavily in Research & Development (R&D) for new product or service ideas.
If a business’s core value is agility, then that organisation will quickly adapt to change and seek opportunities to grow and retain its customer base. Each business has its own core set of values, which may or may not be specifically stated.
These values guide employees in achieving not only the organisation’s objectives but also their individual goals.
Important Values in Business
These are the following important values in business. which are given below:
Be honest and morally upright. This will benefit everyone, from stakeholders to consumers to employees.
Problems are inevitable. A company ready to face problems and solve them will be successful.
Be the change that you want to see in the world.
Being honest, open, and direct saves a lot of time, effort, and money.
Try to wear the shoes of the other person and understand his/her challenges. Evaluate how you can help them to overcome their challenges and achieve goals.
Be accountable, accept responsibility, and reveal results transparently. Brushing things under the carpet will only cause the problems to simmer and resurface later in much worse shape.
Focus on one thing at a time to achieve it; instead of trying to accomplish too much at the same time.
Globalization and Business Ethics
The impact of globalisation on business ethics is as follows:
Barriers Open to International Trade
Globalisation opened the barriers to international trade and increased economic interdependencies between countries. With the growth in trade, it became imperative for businesses to deal fairly with their suppliers, customers, and employees.
If globalisation opened more markets, provided access to cheap sources of materials and labour, and increased profits for developed countries, then it created new job opportunities, introduced new business opportunities to local suppliers, brought in multinational brands, and raised the standard of living for millions of people in developing nations.
Destruction of Natural Habitats
The growing urbanisation uprooted societies, as people migrated from villages to cities for their livelihood. Infrastructure development has resulted in the destruction of natural habitats.
FAQs About Business Ethics and Values
What are the features of business ethics?
The following are the features of business ethics:
1. Based on Moral Values
3. Both Objectives and Means
4. Society Oriented
5. More than Law.
What are the objectives of business ethics?
These are the objectives of business ethics:
1. Same Rules and Regulations for Everyone
2. Clear Communication of Policies to Everyone
3. Value Employees
4. Prepare Policies That are Employee-centric
5. Evaluate Employee Fairly.
What are the important values in business?
The following are the important values in business:
2. Problem Solver