Business and Professional Ethics - Research Paper Example

Business ethics Ethics is a discipline that mainly deals with what is good or bad with moral duty and obligation (Schneeman, 2000, p. 198). Simply, ethics can be defined as moral principles that guide the behavior of an individual or a corporation. A corporation relates with other institutions e.g. competitors. As a result, there is need for a standard code of ethics that ensures that there is a good interrelationship between the two parties. Code of ethics therefore, contains principles that a party or organization must follow in order to gain benefits without infringing losses or pain to the other parties. Ethics can be written or unwritten depending with the extent of the interaction between parties. Some of the written ethics that a person must follow are contracts and warning signs such as this is a non smoking zone. Failure to follow such regulations may have negative effects to the other parties (Howie, 1987, p.17). Business ethics are moral principles that guide business people to earn their profits without having to infringe losses or doing harm to the other party. Some of the major principles include principle of common good, principle of beneficence, principle of respect of autonomy etc. These principles guide the interaction between two parties by putting boundaries and outlining the expected behavior by those individuals when transacting their activities. If not followed, the other parties might suffer. One of example where ethics are not followed in doing business is tarnishing the name and products of the competitor in order to increase the size of the target customers. Business is therefore expected to compete in a neutral ground without doing any harm to each other (Howie, 1987). Importance of business ethics One of the major importances of business ethics is ensuring that there is a good coexistence between business personnel or corporations. The main aim of any business is to make profits. As a result, some business goes to an extra mile of using unethical means to ensure that they eliminate the competitors in order to increase their profit margin. One of the examples of unethical behavior is a business person purchasing all the products of the competitor in the market in order to reduce customer loyalty towards the products of the competitor. When ethical principles are keenly followed, businesses are able to exist peacefully without any of them doing harm to the other (Brooks, Dunn, 2009, pp. 66). Business ethics improves customer loyalty towards the products or services. Currently, customers are very keen on what they are consuming and the source of the product. As a result, they keep on monitoring the ethical standards of their preferred company or businesses. If the business acts unethically be it through its transaction or even employees being unethical this may have an adverse repercussion. This tarnishes the image of the company/business, an aspect that reduces trust of the customers towards the product. This behavior may result to reduced revenue of which can lead to collapsing of the business. This case can also give the competitors a competitive advantage as they can use unethical behavior by the business to lure customers to purchase their products (Ferrell, Fraedrich, Ferrell, 2009, p. 79). Business ethics improves customer relation. Moral conduct of a business plays a greater role in attracting customers to the business (Kline, 2010, p. 39). Customers like to be associated with a business that has a clean reputation. Poor moral values by the business distance the customers from the business. Therefore, employees hold a very important part in enhancing customer relations. Business ethics increases brand equity. Brand equity is the public valuation of business’ brand name. The brand name attracts investors towards the business. This increase capital that the business holds therefore enabling the business to compete effectively in the market. This capital is also used in diversification of the company operations therefore enabling the company to expand its sources of revenue (Schneeman, 2000, p. 56). Business ethics reduces business losses that may result from legal fines (Schneeman, 2000). Unethical behavior may make the business to be sued as a result of causing harm or damage to the other party. The legal process is expensive and time consuming. This can make the business to lose its capital through payment of damages. This is in addition to loss of customer trust towards the business as the legal process is open to public viewing (Kline, 2010, p. 34). Fundamental ethical principles Stewardship This is a principle that requires one to be the caretaker of the other person. One cannot cause harm to a person when he/she is mandated to be a steward of the other. This principle therefore puts a responsibility on every person to take care of the neighbor. As a result, this principle reduces conflict and harm that a person can direct to the others and enables parties to live in harmony (Kline, 2010). Respect for persons This principles requires every party to respect others existence. Lack of respect leads to conflict as one party tries to justify its superiority. In a competitive market context, one party is required by this principle to respect the other party’s existence. This reduces conflict among the parties and enables them to compete in a neutral ground. In addition, a good relationship exists between the parties therefore enabling the businesses to grow together as they respect each other existence (Schneeman, 2000). Do no harm to others For a good relationship to exist among different parties, parties should not harm each other either psychologically or physically. This ensures that all parties coexist with each with no parties using unethical mean e.g. threats to gain advantage over the other parties. This principle therefore prevents one party from infringing any harm on the other as this will be also legally wrong because each party has a right to exist (Schneeman, 2000). Case study In McKinsey case the accusations that were leveled against one of the former manager tarnishes the reputation of the company at large. McKinney depends largely on its reputation due to intense competition on the market. This setback may have adverse effects to the whole performance of the organization. Fraud accusations that were directed towards Mr. Gupta shows high levels of negligence an aspect that might lead to lack of trust by the customer towards the operations of the company. It may also discourage the potential investors towards investing in the company. This may reduce the company’s reserve capital that is used to compete in the market (Howie, 1987) Question 5 The principals indicates that business mainly depend on its reputation. The success of the business depends on the image that customers carry towards the business. This is because a positive image encourages the customers towards the business together with potential investors. In the case study, the major lesson is that individual actions have a great impact on the whole image of the company. This is irrespective of the person’s position on the company or organization. Any behavior counts on the whole image of the company therefore each individual holds an important position towards the existence of the business in the market (Schneeman, 2000). Another important note is that transparency and accountability of the individual plays a great role in creating or tarnishing the image of the company. In McKinsey case Mr. Gupta lack of transparency and accountability even after leaving the company has an important role to play in the current success of the company In conclusion, business success mainly depends on the larger image that community has towards its operations. This is important in creating customer relations, brand equity and loyalty of the customer towards the products. Instead of the organization concentrating too much on advertising its products, it should ensure that it sets policies that will see improved performance of the whole business by keeping high ethical standards. Works Cited Brooks Leonard J., Dunn Paul. Business & Professional Ethics for Directors, Executives & Accountants. Cengage Learning, 2009.Print Ferrell O. C., Fraedrich John, Ferrell Linda. Business Ethics: Ethical Decision Making and Cases. Cengage Learning, 2009. Print Howie, John. Ethical Principlas and Practice. New York, United States of America: SIU Press, 1987. 1-107. Print. Kline, John. Ethics for International Business: Decision-Making in a Global Politica Economy.. Taylor and Francis, 2010. Print. Schneeman, Angela. Paralegal Ethis. New York: Cengage Learning, 2000. 1-156. Print. Read More