Business ethics is an art or science of maintaining a harmonious relationship with society, its various groups and institution as well as reorganizing for right or wrong of business conduct. Business ethics deals with morality in the business. It is a system of moral principles and values applied to business activities. Wrongdoing by businesses has focused public attention and government involvement to encourage more acceptable business conduct. Any business decision may be judged as right or wrong, ethical or unethical, legal or illegal. Business ethics is the principles and standards that determine acceptable conduct in business organizations. The acceptability of behavior in business is determined by customers, competitors, government regulators, interest groups, and the public, as well as each individual’s personal moral principles and values. Many consumers and social advocates believe that businesses should not only make a profit but also consider the social implications of their activities. We define social responsibility as a business’s obligation to maximize its positive impact and minimize its negative impact on society. Although many people use the terms social responsibility and ethics interchangeably, they do not mean the same thing. Business ethics relates to an individual’s or a work group’s decisions that society evaluates as right or wrong, whereas social responsibility is a broader concept that concerns the impact of the entire business’s activities on society. From an ethical perspective, for example, we may be concerned about a health care organization or practitioner overcharging the provincial government for medical services. From a social responsibility perspective, we might be concerned about the impact that this overcharging will have on the ability of the health care system to provide adequate services for all citizens. Knowing that the company, they deal with, has stated their morals and made a promise to work in an ethical and responsible manner allows investors’ peace of mind that their money is being used in a way that arranges with their own moral standing. When working for a company with strong business ethics, employees are comfortable in the knowledge that they are not by their own actions allowing unethical practices to continue. Customers are at ease buying products or services from a company they know to source their materials and labor in an ethical and responsible way. A company that sets out to work within its own ethical guidelines is also less at risk of being fined for poor behavior, and less likely to find themselves in breach of one of a large number of laws concerning required behavior. Reputation is one of the company’s most important assets, and one of the most difficult to rebuild should it be lost. Maintaining the promises it has made is crucial to maintaining that reputation. Businesses not following any kind of ethical code or carrying out their social responsibility leads to wider consequences. Unethical behavior may damage a firm’s reputation and make it less appealing to stakeholders. This means that profits could fall as a result. The natural world can be affected by a lack of business ethics. For example, a business that does not show care for where it disposes its waste products or fails to take a long-term view when buying up land for development is damaging the world in which every human being lives and damaging the future prospects of all companies. Need for business ethics • to stop business malpractice; • to improve customers’ confidence; • for the survival of business; • to safeguard consumers’ rights; • to protect employees and shareholders; • to develop good relations; • to create a good image; • for smooth functioning; • consumer movement; • consumer satisfaction; • importance of labor; • healthy competition. Can businesses come back from a problem with ethics? If so how?
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