Ethics in Contemporary Business

Introduction:
What is Business Ethics?
Business ethics is the study of proper business policies and practices regarding
potentially controversial issues, such as corporate governance, insider trading,
discrimination, corporate social responsibility and fiduciary responsibilities. Law often
guides business while other times business ethics provide a basic framework that
business may choose to follow to gain public acceptance.
According to Andrew Crane “ Business ethics is the study of business situations,
activities and decisions where issues of right and wrong are addressed”.

Importance of Ethics in Contemporary Business

Ethic is important to the business organization as well as the whole community.

Ethics should be implemented ideally throughout all aspects and operations within
organization. With successful implementation of ethical management, organization can
enhance the efficiency in the long run. Unfortunately, many organizations cannot
perform ethical management due to human nature and other inappropriate management
control systems. Business organization with successful ethical management can achieve
superior performance because they can attract and retain those high quality staff,
customers, suppliers as well as investors. However, establishing the ethical organization
needs time and effort. It cannot be achieved automatically, because the human beings are
not morally perfect. Those unethical staff, customers, suppliers, and investors are
capable of preventing business organizations from achieving high integrity and superior
performance. Also, without the adequate ethical training, the culture of trust between the
staff within the business organization cannot be established successfully. Without the
appropriate communication system within the organization, those illegal or unethical
conducts cannot be reported instantly and then carefully managed. Without the ethical
hiring system, hiring one employee with an unethical value system can corrupt an
organization. On the other hand, discrimination on an individual’s race, color, religion,
gender, national origin, physical or mental disabilities during hiring the staff could be an
offense against the discrimination ordinance. Ethical leadership performed by the
management staff can generate high quality performance outcomes. It tends to attract,
develop, and promote hard-working, conscientious, caring, and moral employees who
generate high quality performance outcomes. For treating fairly on each staff in the
workplace, management should design and implement the code of ethic so as to abstain
from any unfair treatment of customers, supplier, competitors, and employees, such as
concealment, abuse of privileged information, and misrepresentation of material facts.
With considering the above issues and knowing why managing ethics is essential and the
nature and negative ramification of unethical activities within business organization,
ethic management of organization can be implemented in the appropriate ways. In such
a way, ethics in business policy may be viewed a set of honest standards but it is
important to understand that standards, or to put it more precisely ethical standards,
established within a company should meet the general standards that are commonly
acceptable and applied in the society. What is meant here is the fact that ethical business
policies should mirror ethical norms, values and standards established within the society.
At the same time, companies should guide customers using ethical principles. In other
words, companies should show customers positive models of behavior and positive
business patterns, which are ethically correct. Customers, in their turn, naturally prefer
companies that conduct ethical and responsible policies in relation to customers,
environment, employees, and so on. At this point, it is worth mentioning the fact that
companies cannot ignore the position of customers and they should develop their
business policies respectively to needs and demands of customers.

Benefits of ethics in contemporary business-

The importance of business ethics reaches far beyond employee loyalty and
morale or the strength of a management team bond. As with all business initiatives, the
ethical operation of a company is directly related to profitability in both the short and
long term. The reputation of a business from the surrounding community, other
businesses and individual investors is paramount in determining whether a company is a
worthwhile investment. If a company's reputation is less than perfect based on the
perception that it does not operate ethically, investors are less inclined to buy stock or
otherwise support its operations. Other benefits are;

1. Long-term growth
Large profits are always attractive, potentially allowing faster achievement of strategic
goals, a greater provision against risk and a greater sense of success and stability.
2.Cost and risk reduction:
Companies which recognize the importance of business ethics will need to spend less
protecting themselves from internal and external behavioral risks, especially when
supported by sound governance systems.
3.Limited resources: the planet has finite resources but a growing population; without
ethics, those resources are repleted for purely individual gain at huge cost both to current
and future generations.
4. Build Customer Loyalty.
5. Retain employees.
6. Positive Work Environment.
Ethical Issues in Contemporary Business

Fundamental Issues
The most fundamental or essential ethical issues that businesses must face are integrity
and trust. A basic understanding of integrity includes the idea of conducting your
business affairs with honesty and a commitment to treating every customer fairly. When
customers perceive that a company is exhibiting an unwavering commitment to ethical
business practices, a high level of trust can develop between the business and the people
it seeks to serve. A relationship of trust between you and your customers may be a key
determinate to your company's success.
Diversity Issues
An ethical response to diversity begins with recruiting a diverse workforce, enforces
equal opportunity in all training programs and is fulfilled when every employee is able
to enjoy a respectful workplace environment that values their contributions. Maximizing
the value of each employees' contribution is a key element in your business's success.
Decision-Making Issues
Ethical decision-making processes should center on protecting employee and customer
rights, making sure all business operations are fair and just, protecting the common good
and making sure individual values and beliefs of workers are protected.

Conclusion:
Ethics is extremely important in the contemporary business environment. The
violation of ethical norms and principles undermines company-customer relationships,
relationships of companies with their business partners, and, eventually, leads to the
deterioration of their marketing performance, whereas in the most serious cases, the
violation of ethics may lead to the ruin of a company, as was the case of Enron and
others. In such a situation, companies are growing more and more concerned with the
elaboration of effective methods of the implementation of ethical business policies. In
this regard, the development of Codes of ethics may be quite effective but the effective
implementation of Codes of ethics depends on the responsibility of leaders, who should
guide their subordinates and show them a positive model of behavior to follow.