Ethical Business Practices - Term Paper Example

Introduction In this age of globalization and industrialization, the most essential weapon that might be used by any business organization or entrepreneur is ETHICS. Ethics acts as the catalyst which helps an entrepreneur to retain its portfolio and image in the market for long period of time. It also helps to retain the power of dominance in the market in-spite of numerous new entrant s and new products or services. Thus, it might be stated that ethics and entrepreneurship are entirely dependent over one-another. The entire world is dependent over the process of buying and selling varied types of products and services in exchange of money. But in performing such type of operations, Ethics is extremely essential. It is known as the philosophy that an entrepreneur or business organization adheres in its dealings. This means, each and every business organization or entrepreneur comprises of certain rules and principles that its employees need to follow at the time of tackling its operations. Otherwise, the entire business organization might lead to downfall of productivity and profit margin. Apart from Ethics, Morality is another essential term offering high value towards business. Morality is mainly concerned with varied types of values, norms and beliefs that help an individual to detect the right or wrong actions. Thus, the behavior of an individual is highly influenced by such values, beliefs and norms that vary from person to person. With the help of such behaviors, an entrepreneur or individual enhances the prospects of a business organization. So, such values are extremely essential for an entrepreneur. Discussion The characteristics of Ethics in business are as follows: Ethical decisions differ from one person to another. It is mainly due to different views, values, norms and beliefs of varied types of individual. However, each and every types of ideas and values need to be apt for the customers or employees of the organization. Ethical decisions need to be at par with the cost incurred and the profit margin of the business. In order to do so, the entrepreneur needs to offer the products and services in such types of prices to its customers. The decisions of the employees in a business are voluntary their own deeds. So, it is essential for the employees to present ethical decisions that might prove effective for the business in long run (Shaw, 2010). Ethics is a trait of human being that needs to be ethical. Otherwise, being an employee of an organization, he might not be able to take any type of ethical decisions. Not only in his professional life, but ethics is also essential in one’s private life. If he or she fails to take the ethical decisions, then he or she might never prosper in life in future era. Side by side, due to an unethical decision, not only the image or productivity of the organization might get reduced but also the reputation may decline. The range of customers might get reduced slowly and slowly leading to downfall of the entire profit margin of the organization. Thus, the rate of loyalty over the brand or the entrepreneurial image might get faded among the public day by day. So, it is extremely essential to maintain a strong status and supremacy in the market for the brand and its products on the basis of ethical decisions. Only then, an entrepreneur might prosper. Ethics is a type of characteristics feature of a human being that varies from one individual to another. Moreover, working in a group or an organization, the ethical views and norms of an individual also gets highly influenced by others. Some of the aspects by which, ethics within an organization gets affected are stated below: Religion- as numerous individual works within an organization or under an entrepreneur, some due to diverse religious traditions and norms, ethical decisions also get affected. Thus, sometimes, due to religious variations, the decision making of the individual gets influenced to a certain extent. But still, serving the human being in a best way is the only view of any religion and so every individual try to follow that norm effectively. Culture- cultural variations also highly influences the ethical decisions of the individual or employees working within an organization. Due to which, sometimes the decisions or ideas presented by diverse employees vary from one another. Experiences- experiences of an individual also helps him or her to tackle any situation. Due to which, the ideas or values presented by an individual at the time of crisis situation highly differs from one another (Shaw, 2010). Therefore, these factors affect the ethical decision making of an individual or entrepreneur. In order to operate an organization or business, each and every entrepreneur tries to offer high concentration over ethical standard. This is because; ethics is the root cause for the success of any organization or human resource. This means, in order to maintain the human resources of an organization in an effective way, an entrepreneur need to support the positive or ethical decisions. Not only this, he or she needs to realize the pros and cons of any specific decision so as to tackle it in an effective way. Otherwise, due to wrong decision making, the fame and image of the organization as well as the entrepreneur himself might decline in the market among others. And once, the brand image decline, it becomes extremely hard to develop or build it again in the previous way. This is because the target customers fail to offer the similar type of trust over the brand or product lines. Therefore, in order to maintain the similar reputation and dominancy, maintenance of ethical standards is extremely essential. The role of ethics is extremely vital in an organization and so stated below: Ethical motivation-if the management of the organization tries to follow the ethical standards or decisions within an organization. Then, by seeing the ethical decision making of the management, the employees also try to follow those rules and norms so as to make the organization reputed and renowned. Employee retention- due to the maintenance of ethical standard within the organization, numerous experienced employees try to retain within the organization. Due to which, the productivity and efficiency of the organization also gets enhanced resulting in amplification of its profit margin and revenues as well. Fulfillment of the demands of the stakeholders- by retention of the experienced employees, the productivity of the organization might also get increased by fulfilling demands of the stakeholders and shareholders. Improvement of productivity- if the organizational management and the employees follow ethical path, then the relationship among them might also remain harmonious and effective. As a result, the morale and motivation of the employees towards work might also get increased resulting in amplification of the productivity. Improvement of brand image- due to improvement of the loyalty within the minds of the customers, the rate of total sales might get increased resulting in amplification of the brand image of the organization as well (C & et. al., 2011). Improvement of profit margin- if a specific ethical standard is maintained within an organization, then no wrong deeds might take place resulting in amplification of the profit margin and ROI. So, ethics plays a very important role within an organization that helps to maintain its effectiveness in the market among other rivals. Code of ethics means a set of rules and regulations that need to implemented or obeyed within an organization for its betterment. Along with this, these codes comprises of certain rules and norms that helps in talking positive decisions for the organization. And also helps in tackling varied types of challenging issues and troubles. Moreover, it also encourages the employees to take positive steps at the time of any crisis situation or economic downturn. Due to such reason, it is extremely essential for any organization and its employees (Caudill, 2011). This is because; it might help to improve the well-being of the employee along with the brand value of the organization. Therefore, on the basis of the above mentioned points, the importance of code of ethics might be evaluated. Analysis After analyzing and evaluating each and every aspect of the above mentioned points, it might be depicted that ethics is the most vital concept of entrepreneurship. An entrepreneur might not sustain in the market without following ethical standards or characteristics. This is because, if the organizations code of ethics is wrong, then the shareholders or stakeholders might not retain with the organization for long time resulting in reduction of its equity in the market among others. Side by side, its total range of sale might get reduced along with reduction in the target customers. And as a result, the profit margin might get reduced along with its consistency in the market among other rival players. So, it’s extremely essential to maintain, ethical rules and policies within an organization. However, if not followed then varied types of issues might also arise such as conflicts due to cultural differences within the employees, issue due to employee privacy in workplace, issue between employee and employer, strikes, lockouts, sexual harassments and many others (Businesscasestudies.co.uk., 2012). Thus, each and every organizational entrepreneur needs to offer high concentration over ethical standards, rules and regulations to maintain evenness. Conclusion Conclusively, it might be stated that ethics and entrepreneurship are just the two sides of a coin. This means that one may not be separated from another. If one part gets affected then the other side also attains its influences (good or bad). If the proper ethical decisions are taken, then it might surely offer positive effects and in case of negative decisions, worse consequences might decline the flow of the organization. So, before taking any sort of decision, one might think numerous times so as to detect the positive effects. It is done, so that all sorts of decisions and regulations implemented within the organization might prove effective in long run. Apart from this, such decisions might also help in fulfillment of the primary and secondary needs and tertiary needs of the employees. This might help in enhancement of the motivation and morale of the employees resulting in improvement of the level of performance and productivity of the organization. So, it is highly essential among others in the organization. Hence, the importance of ethics may be clearly detected from the above mentioned paragraphs. References Businesscasestudies.co.uk. (2012). Ethical business practices a cadbury schweppes case study. Retrieved from: http://businesscasestudies.co.uk/cadbury-schweppes/ethical-business-practices/the-importance-of-ethics-in-business.html#axzz2i32jYEkd. Caudill, Donald. W. (2011). Journal-of-ethics & entrepreneurship. Center for ethics and entrepreneurship, vol(1), no(1), pp.7-97. Retrieved from: http://www.gardner-webb.edu/percussion/journal-of-ethics/ethics-1-1.pdf. C. Odies & et.al. (2011). Business ethics, 9th ed.: ethical decision making and cases. New York: Cengage Learning. Shaw, William. H. (2010). Business ethics: a textbook with cases.: a textbook with cases.New York: Cengage Learning. Read More