Business Ethics

Chandrima Agnihotri Maanas Salim Ruchi Kumari Shipra Yadav Sneha Singh

Business ethics is a relative term, and can be looked at from various angles, all equally rational and valid. Importance of business ethics in the workplace and in society is a crucial study for everyone who owns a business, or believes in being a thoughtful and informed customer.

Why Business Ethics?

Profit Maximization more profits than the others as customers of businesses are loyal and satisfied with the services and product offerings of such businesses. Efficient Utilization of Business Resources If the management or seniors of an organization follow ethical business practices, i.e, they do not bribe to get their way or they do not cheat the customers, investors, suppliers, etc., the employees will follow suit. The employees too will refrain from using the office property or resources for personal benefits. This will result in better and efficient utilization of the business resources. .

 Creates Goodwill in the Market An organization, which is well-known for its ethical practices, creates a goodwill for itself in the market. Investors or venture capitalists are more willing to put their money in the businesses which they can trust. Shareholders too, remain satisfied with the practices of an ethical businesses. Thus, the importance of business ethics in creating goodwill and building long-term relationships, cannot be denied. The chief goal of any organization is to maximize its profits. The importance of business ethics can be understood from the fact that it helps the businesses in achieving its goal of profit-making by creating goodwill for the business in the market, increasing its loyalty among the customers, by aiding in employee retention and by maximum utilization of its resources.

What are Business Ethics Today... finances have to be maintained ethically and the usage of these, again, has to be made correctly. business should in no manner hamper the interest of the workers, and policies have to be formed keeping in mind the say of the trade unions. Recruitment, selection and promotions have to be done keeping in mind only the work of the individual. Marketing of a particular product or service has to be done keeping in mind the society where these businesses function. Business firms should not market or advertise or promise anything that they can't deliver. Some academics argue that business ethics is nothing but the want of drawing equilibrium between relativism and idealism. Business ethics also gave rise to corporate social responsibility (CSR) that deals with the social responsibility of corporates towards communities and the welfare of society at large. I hope this information helped you understand what are business ethics, properly and clearly.

 Any business enterprise in an emerging economy have to comply a responsible business conduct as owners and managers strive to improve business performance, make profits, and contribute to economic progress in their communities.

What is Business Ethics?

Business ethics are a code of ethical conduct, adherence to which is expected out of organizations that function in a particular society, so as to not harm the members of that society or the society itself, in any manner.

How business ethics evolved?

The businesses in olden times were seldom sensitive to the communities where they flourished. Eventually, we had economic laws that formed better ways for efficient co-existence.

 A business cannot claim to be ethical firm if it ignores unethical practices by its suppliers e.g. Use of child labour and forced labour Production in sweatshops Violation of the basic rights of workers Ignoring health, safety and environmental standards An ethical business has to be concerned with the behaviour of all businesses that operate in the supply chain i.e. Suppliers Contractors Distributors Sales agents

 Pressure for businesses to act ethically Businesses and industries increasingly find themselves facing external pressure to improve their ethical track record. An interesting feature of the rise of consumer activism online has been increased scrutiny of business activities. Pressure groups are a good example of this. Pressure groups are external stakeholders they Tend to focus on activities & ethical practice of multinationals or industries with ethical issues Combine direct and indirect action can damage the target business or industry

Direct consumer action is another way in which business ethics can be challenged. Consumers may take action against: Businesses they consider to be unethical in some ways (e.g. animal furs) Business acting irresponsibly Businesses that use business practices they find unacceptable Consumer action can also be positive supporting businesses with a strong ethical stance & record. A good example of this is Fairtrade. Is ethical behaviour good or bad for business? You might think the above question is an easy one for businesses to answer? Surely acting ethically makes good business sense? As with all issues in business studies, there are two sides to every argument: The advantages of ethical behaviour include: Higher revenues demand from positive consumer support Improved brand and business awareness and recognition Better employee motivation and recruitment New sources of finance e.g. from ethical investors The disadvantages claimed for ethical business include: Higher costs e.g. sourcing from Fairtrade suppliers rather than lowest price Higher overheads e.g. training & communication of ethical policy A danger of building up false expectations

Business ethics are moral values and principles that determine our conduct in the business world. It refers to commercial activities, either with other business houses or with a single customer. They can be applied to all aspects of business; from generation of an idea to its sale. Businesses use the society for its resources and functioning, thereby obligating it to the welfare of the society. While the objective of any business is to make profits, it should contribute to the interest of the society by ensuring fair practices. However, greed has led the present business scenario towards unethical business practices, legal complications and general mistrust.

Code of Ethics
Many organizations now implement the code of ethics in their company polices, which they implement during induction and regular training. A Code of Ethics "is generally a more blanket statement of values and beliefs that defines the organization or group. It is primarily for the following areas: Company's assets, funds and records Conflict of interest Management and employee practices Information on competition

Ethical Business Practices Following are a few ethical business practices that should be followed to build an honest reputation and ensure smooth running of the organization. Investors: Ensuring safety of their money and timely payment of interest. Employees: Provision of fair opportunities in promotions and training, good working conditions, and timely payment of salaries. Customer: Complete information of the service and product should be made available. Personal information of the customers should not be used for personal gain. Competition: Unscrupulous tactics and methods should be avoided while handling competitors. Government: Rules and regulations regarding taxes, duties, restrictive and monopolistic trade practices, and unlawful activities like corruption and bribing should be adhered to. Environment: Polluting industries should ensure compliance with the government norms regarding air, water and noise pollution.

Unethical Business Practices The financial sector is abuzz with acts of violation of norms to amass wealth in an unethical manner. Following are some of the activities that come under the ambit of unethical practice. Resorting to dishonesty, trickery or deception. Distortion of facts to mislead or confuse. Manipulating people emotionally by exploiting their vulnerabilities. Greed to amass excessive profit. Creation of false documents to show increased profits. Avoiding penalty or compensation for unlawful act. Lack of transparency and resistance to investigation. Harming the environment by exceeding the government prescribed norms for pollution. Invasion of privacy used as leverage, for obtaining personal or professional gains. Sexual discrimination

Preventing Unethical Practices in Organizations Addressing unethical behavior and practices is essential to maintain an ethical climate in an organization. Incorporation of ethical norms and conduct into all levels of the organization can be done in the following ways Codes of corporate ethics must be formulated so that employees are aware of the organization's expectations regarding ethical norms and conduct. An appeal process must be in place so that any unethical practice can be brought into light. Seminars on business ethics should be conducted for employees. This will help them in understanding the importance of ethical work culture. Compliance officers must be appointed to keep a check on fraud, corruption, and abuse within the organization. To promote ethical behavior, performance management system of the organization must be modified to incorporate ethical behavior as a parameter for appraisal and rewards.

Ethical dilemmas in business stem from challenges that push abilities of both, employer and employee, to redefine the parameters of right and wrong. As an employer, who holds an authority over the workforce,needs to identify ethical conflicts and resolve them with absolute objectivity to foster a healthy environment and an efficient workforce. Examples of Ethical Dilemmas 1. Ignoring Unethical Actions Nepotism is the reality of many organizations.. An employer has to be fair arbitrator who can read between the lines and deliver justice. To prevent escalation of small issues to larger fights, it is important that the person in power stands up for the cause. In failing to do so, the employees will lose trust, which will negatively impact production. 2. Abusing Work Ethics Production is the aim of any organization. For instance, making employee work extra hours, robbing their holidays, taking away their paid leaves, hiring child labor and demeaning your employees disrupts work environment to a large extent. Asking your employees for special favors is also an act of violating the prescribed work ethics. Abuse can scar your employees forever and stain the reputation of your work ethics for a lifetime.

3. Tarnished Images Debate of drawing a distinction between your personal and professional life. Thus, as employees, if you commit an act of personal decadence then it will also reflect badly on your organization too. In case of business ethics, bad publicity is only unwanted publicity. 3. Violation of Rules Many times, employees break certain rules to meet their predetermined goals,Such behavior needs to be corrected or punished immediately, to show employees that leniency will not be tolerated. This can lead the company in grave legal battles, sullying its ethics and hampering its growth. 4. Faking It A customer is more valuable than product. It is the demand created by the customers that makes a business run. Thus, any breach of ethics towards a customer, will make him question credibility and the authenticity of the product.

When business people speak about business ethics they usually mean one of three things: (1) avoid breaking the criminal law in ones work-related activity; (2) avoid action that may result in civil law suits against the company; (3) avoid actions that are bad for the company image.

Coca-Cola's Water Sustainability Initiatives

ABSTRACT This case is about the global water sustainability initiatives undertaken by The Coca-Cola Company (Coca-Cola). It details the activities undertaken by Coca-Cola's management and employees to contribute to the benefit of the society and community in which the company operated by pledging to return all the water it used in its operations back to the environment.

ISSUE

Understand the issues and challenges faced by Coca-Cola with regard to its global environmental responsibility initiatives. Coca-Cola was accused of draining the underground water table and of releasing improperly treated industrial effluents in less Developed countries

SOLUTION In 2007, Coca-Cola initiated a global water project that focused on reducing, recycling, and replenishing water used in the company's beverage production Coca-Cola opened an exclusive website, www.cokefacts.org.

Conclusion
Recognizing the significance of business ethics as a tool for achieving the desired outcome is only the beginning. A small business that instills a deepseated theme of business ethics within its strategies and policies will be evident among customers. It's overall influence will lead to a profitable, successful company.