ManagementEconomic Performance and Business Ethics - Essay Example

Management Business ethics is a system which deals with the moral principles in business environment. It is providing a way for possible behavior forthe organization in their strategic planning and routine operations. It is very important in modern business world to achieve business success and improve organization’s image. All organizations have their own ethical codes to ensure their social obligation. These ethical codes are applied in their day-to-day operations. “A code of ethics is a formal statement that acts as a guide for how people within a particular organization should act and make decisions in an ethical fashion.” (Certo, Samuel. C). Strategic decisions of an organization want to ensure its economic goals like profit maximization, volume, and the growth of organization. These decisions are largely influenced by their employees, customers and other stakeholders. Study of business ethics can be seen from different direction of business. Business Ethics relates to the need of ethical values in business decisions and plans. Ethics is also relevant in the context of corporate responsibility of an organization. Each organization has its own responsibilities to the society. Business ethics is a feeling of obligation to consider other human beings who are directly and indirectly involved in business activities. Business ethics also relates with good behavior of organization. Business ethics can also be deemed as an organization’s ability to ensure ethical value in its corporate decisions. The business strategy of each organization should depend on their ethical views; as such decisions affect various stakeholders. An organization’s responsibility to these stakeholders differs on the basis of its objectives. Example: An organization’s responsibility to its owner is making maximum profit and minimizing the cost. It further aims to ensure the growth and value of the business, the manager want to satisfy this responsibility at the same time they want to continue other responsibilities to the society, government, customer, employees etc. In this context all managers find themselves placed in a dilemma to take proper decision so that ethical decisions and corporate objectives stay in tandem with each other. This study aims to discuss about the problem of organizations’ social performance and economic performance. Economic performance is dealing with an organization’s main objective like making profit, generating revenue and reducing cost. On the other hand, the social performance of an organization pertains to their responsibilities to the society and relates to the ethical values in business. Ethical values are very important in a business all ethical questions are relating with what is right, just, and faire. “Terms like ‘professional ethics,’ ‘work ethics,’ and ‘business ethics’ are misnomers. The principles we use in the workplace should be the same principles we use in other areas of our lives – they’re just applied to business situations.” (What is business ethics? 2005). There is a dichotomous, yes or no choice, with regard to the organizations economic benefit and their ethical values in business. However, ethical decisions are not simple choices between right and wrong. In the present competitive world many organizations are only focusing on their ultimate goal of profit maximization. They are not bothered about the way they choose to reach the goals. On the other hand some modern managers recognize the importance of ethics in business, and hence they give more priority for ethics in their business decisions and they try to ensure that their decisions are ethical. Profit maximization is the main purpose of a business, and all managers must ensure that their activities are ethical for fulfilling this purpose. Theory of ethics believes that managers should focus on ethical values in their business activities as well as profit maximization. Ethical values are important in management. Business ethics also emphasize the important of maintaining good relationship and cooperation among employees as also customers and all other stakeholders of the business. All strategic decisions of an organization are influenced by its ethical values in business. Strategic business decisions include new product development, setting of new manufacturing plant etc and these types of decisions require to be more ethical. It is the responsibility of management to ensure that their strategic decisions are ethical. Strategic decision on the area of marketing and distribution is an organization’s main responsibility and it should aim to provide quality product at reasonable price to the customers. This ethical decision also relates to an organization’s social responsibility Social responsibility of an organization is to provide quality product to customers and protect the market from illegal or unfair business practices. All marketing activities affect the customers, and therefore a business firm wants to ensure that its customers stay satisfied with its product and service. Production and Manufacturing is another Strategic area of a business. Modern management is adopting various production methods for making maximum profits in their production function. Modern strategic production techniques and functions are affecting the employees of the organization. Modern production functions aim to avoid the over exploitation of employees. In this situation ethical business decisions help the employees from this exploitation and the responsibility of the organization is to provide better work environment for their employees. It includes the health and welfare of the employees. Some organizations only allow poor work environment for their employees, which is unethical and against the business morality. An organizations should understand their responsibility to their employees and must provide positive work environment and growth opportunity. Another strategic area in business is expansion and diversification. This strategy may cause the over exploitation of natural resources and pollution which badly affect the whole society. Ethical decision in these areas of business strives to help the society in saving and preserving the environment. An organization wants to ensure that it meets the social responsibility before taking a strategic decision in the areas of production. All organizations must try to protect the environment from pollution and eschew other unethical activities. Strategic decisions of an organization also aim to ensure that its activities do not negatively affect the environment and the society. Similarly, the business also has to be ethical towards another of its stakeholders group namely, the government. Ethical management activities further endeavors to achieve corporate goals by minimizing government regulations. All organizations are responsible to obey the government rules and regulations. Therefore, they want to take strategic decisions for their future goal achievement and to continue their ethical values in business. Work cited Certo, Samuel. C. A code of Ethics, Modern management, seventh edition Prentice Hall. p.70. What is business ethics? Scribbler’s Ink. 2005. 29 Apr. 2007 . Read More