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Business Ethics

Business Ethics

Humans are a social animals and every human wants to be benefitted from its society.However, in case the laws and ethics holds the balance in the society in which all the members have to respect the moral values of others. Ethics are actually the moral principles that protect the rights of the individuals to maintain a balance in the society, in the organization and even among the nations in the process of social interaction.

Ethics and laws become more important while people having different minds, from different professions, different races, different colours, and having different social, cultural and religious norms and values interact with each other. If we look at the history, we can have many examples in which people having differences in religious, political, cultural and social conflicts had great conflicts and sometimes these conflicts results as massive destruction and human assassinations. Ethics are proposed to eliminate such conflicts by the mean of realizing all human to respect the moral values of every one (Christiansen).

Considering this aspect, in the business organizations ethics were not that much important in the past as there was fewer conflicts in between the people because most of the business were local business as it was hard for the people to travel other countries because of lack of transportation modes. Therefore, the business organization had always been ethical conflicts such as gender abuse, health dangers, child labour abuse, environmental abuse and sexual harassment but rarely there were effective laws to address these ethical issues in business organizations. (Foss)

However, as the process of human development become fast, similarly, more awareness come to the people about the ethics and in the present time there are thousands of books have been written since the start of twenty first century. It is true that the concept of business ethics rapidly spread in the business world since the start of twenty first century, but it is as old as the marketplace.

According to a historian of Santa Clara University Richard de George, the term business ethics was used in various ways and various meaning but it became commonly used in America from the 1970s decade. Bentley College is considered as the founded centre for the business ethics as this term was discussed there in 1976 and then the first academic conference was held in this regards in the year of 1977. In this conference the economists discussed the business ethics in term of Business values and justices, and the associated capabilities and contradiction (George). At the land of America, the term of business ethics became important within time and now it is concerned as a major part of the business practices. In the last few decades, a large number of the native national rebuild the system of self determined government and this is still going on with a great pace. In this process it was concerned that the cross culture has been emerging with a rapid pace that address the need to ethical laws.

Within the process of development, the organizations started to understand that every has his own ways of thinking and the intellectual thoughts of a person are developed through a social process, therefore, in the response of the social process, the social, cultural and religious norms and values takes place that varies from region to regions. However, there are some common points and the ethics core purpose is to forced all the participants to understand those common values with an intention to give respect and values to every other human by addressing the civil rights (Christiansen).

In the modern business practices, the business ethics are adopted by addressing the responsibility of the company towards the employees, towards the customers and towards the society and all the other stakeholders. Considering the business ethics, many companies are force to make sure the fulfilment of aforementioned responsibilities. However, in the modern practices business practices are now been using as an advantage to take competitive growth (Rossouw). In case of formalized ethics the purpose is to make sure that all the stakeholders understand the rules and expectation. It also contains the importance towards the cultural values, and a system of good ethics include the trusted reporting and publicized system, protection against the retaliation and frivolous issues, and trusted investigation process. They promote the transparency of the environment, accountability and predictability to develop a supportive environment, to avoid illegal activities by considering the rules, to encourage and enhance the growth of the business through social corporate responsibilities (Hoffman).

In broader point of views, the business ethics in the modern business practices is being used as a source to organizational economic growth in many ways. In this aspect if we look at the world most famous and most successful organizations such as Wal-Mart, Coca Cola, Apple, Google, Nike, etc. We found that in their business practices they give much importance towards their social corporate responsibilities (Srivastava).  Most of the organizations have defined their rule by considering the values of their diversified employees who belong to different cultures, different societies and have different religious norms and values. In case of Nike’s unethical practices of Child abuses, the company had to face great economic lose as its products was abandoned by the consumers. In India, people abandoned coco Cola because of its unethical practices of harming environment in Kerala India at its bottling plant (Srivastava).

The decision of right and wrong is based on the moral judgements judgments that are directed under individual’s ethical concern. The decision in the organization is taken by groups or some individuals that are influenced in organizational culture. The decision making must be ethically moral, in which individuals select right choice of actions. It might be ignored biggest short term profit for ethical decision. Corporate social responsibility as well as ethical behaviours in the organization has significant impact on the business environment (Foss). When companies implement the structure of corporate social responsibility then they have the ability to attract customers towards firm products and create trust.  This will provide potential benefits in organizational core values like reduction in recruitment cost, many employees wanted to work for business and enabling most talented employees. This will also increase over all performance characteristics of the organization. Attracting more investors is that create significant impact on the company share price. These are the potential benefits that are generating ethical business behaviours (Schweppes).

On the other hand lack of corporate social responsibility and unethical behaviours harm organization goodwill. Ethical behaviours are an important concern regarding goof corporate governance which is integral part of Cadbury Schweppes report. Fair treatment as well as transparency in communicating the core value to shareholders reveals best ethical practices towards corporate governance. A well managed corporate social responsibility is best interest for all stakeholders including suppliers, employees, shareowners, Customers and business partners.  Thus business principles in the organization must be clear in accordance with ethical decisions.  The corporation corporate values understand by employees in achieving desired objectives. The good practices of Cadbury Schweppes’ were identified when most of admired companies implement the structure of corporate social responsibility. The environment and community responsibility are the most concern towards ethical responsibility in the business environment (Foss).

The ethical values in the organization are most important to made effectiveness in the performance characteristics.  In most of organizations, a set principle with code of ethics are build to provide the guidelines to individual that how to ethically behave. The guidelines based on the policies, programs and business decisions in accordance with ethical behaviours. The philosophy of ethical values in the organization can affect productivity, reputation, performance attributes and bottom line of business. Following are the certain ethical values that must be formulated in the corporations (Christiansen).

The development of loyalty and morale are developed by the ethical leadership in formulating business operations and it is directly associated with the business economic growth. Leaders used code of ethics to determine discipline and workers behaviours in an organization. High ethical standards are following by leaders to encourage workers to attain high performance.  Ethical leadership is one of the most important aspects in building financial reputation in community. Effective integrity and ethics in the organization builds solid reputation that improves overall operations of business. Moreover, the in an ethical organizations the leaders can give attention in taking other decision as there is no need to give more concern to the conflict management, therefore, the business ethics impact on the leadership management has two ways impact as it makes easy for the leader to manage the organization and leader can utilize his abilities in making progressive decisions (Schweppes).

The ethical behaviours of employees show commitment and integrity with organizational behaviour. These ethical value guidelines stick to employee’s rules and policies to met organizational goals. Higher standards of quality work are achieved under the ethical behaviours of employees among subordinates. This enhances reputation of company towards quality product and services. The employees’ loyalty enhances the efficiency of the employees that directly accelerates the organizational economic growth (Hoffman). 

The code of ethics is implemented by employees and leaders to create ethical organizational culture.  The development of ethical culture in the organization has immense importance organizational success. The employees are rewarding towards integrity and values to obtain ethical culture. The disciplinary guidelines and code of ethics are beneficial for both employee and employer to obtain desired aim. In this way wrong choices of organizations are discarded and attain right path towards high ethical cultural values. An ethical organization increases its economic growth by avoiding illegal activities and by getting values from its employees and its customers (Hoffman).

The morale and loyalty of employees are major concern in healthy organizational culture to sustain high corporate values in well manner. Employee retention as well as increase in productivity and financial benefits is the potential advantages of the ethical organizational culture. Higher level of productivity is achieved when employees are engaged in the ethical decisions that improve efficiency of company performance. On the other hand, increasing in employee retention is decreases cost of hiring new employee that resulted as economic growth for the organization (Christiansen).

There are many benefits and advantages of running ethical business practices. It is source to attract and retain the employees, customers and investors. The companies that work according to the rules and regulation of ethical business, their investors are more satisfied with them. They think that they invest their wealth in good place and it provides pace of mind to the investors. A company, which runs its operations ethically the employees of this company feel more comfortable to working in it because they considered that  they are doing ethical work and comp[any never take by them any unethical work.  Customer’s point of view revealed that they are comfortable of buying products of an ethical company because they know that this company sells clean quality products with any harmful effects (Christiansen). For example, a company of coffee argued that they picked their raw beans from a sustainable plant. These plants experienced not any deforestation through the people, which have good living style and paid good wages, it is a strategy to show the market they foreign coffee has no harmful effect because they are cultivated and picked from the sustainable plants which have no deforestation. It is method to advertise a product from starting to the final stage (George).

Some companies established their own ethical rules; they are also on the less risk of experiencing poor behaviours. In addition, theses find themselves involving in the law breaching activity concerning the required behaviours. For example, law against the payments to the corrupt government or states and policies of environment. If a company involved in law breaching then the whole company will be fined, directors will also pay the fine, even the employees will be fined in case of breach. The company has more concerned about its reputation and considered it as important assets. When it lost it reputation, one time then it would be difficult to rebuild it.  To fulfil the promises is a very effective way to maintain its reputation. If someone is going to start a company or business, ethical law will be benefited for him or her (Ferrell).

It can be concluded that In the modern business practices, the business ethics are the active player in the performance of the organization as it directs the organization towards the corporate responsibility of the organization towards the its stakeholders and shareholders. The business ethics directly associated with the economic growth as unethical business practices may have to face greater employees turn over that increase the hiring costs, in case of inexistence of employees loyalty there are more chances of fraud or corruption. In case of doing illegal activity company might have to pay huge fines against its illegal activity and companies do not succeed to get customers trust that left band impact on the company’s goodwill and so on the sale as well.




Work Cited

Christiansen, Bryan. Handbook of Research on Economic Growth and Technological Change in Latin America. Print IGI Global, 2014.

Ferrell, Odies C., John Fraedrich. Business ethics: Ethical decision making & cases. Print, Cengage learning, 2013.

Foss, Nicolai J. "Linking Ethics and Economic Growth: a Comment on Hunt." Norwegian School of Economics and Business Administration, 6.3 (2011): 4-9.

George, Richard T. De. A History of Business Ethics. Web, 2013. November 4 2015 <>.

Hoffman, W. Michael, Robert E. Frederick, and Mark S. Schwartz. Business ethics: Readings and cases in corporate morality. Print, John Wiley & Sons, 2013.

Rossouw, Deon, and Leon Van Vuuren. Business ethics. Print, Oxford University Press,, 2012.

Schweppes, Cadbury. The importance of ethics in business. Web, 2013. 4 November 2015 <>.

Srivastava, Amit. Coca-Cola Continues Unethical and Dishonest Practices in India. Web, 2009. 28 October 2015 <>.

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