Business ethics play an important role in holding an organization and its employees responsible for the actions of those individuals because it impacts others. Both the external and internal behavior is included in it. It helps keep a check on the organization’s conduct and its individuals and encourages them to pursue responsibility. Business ethics are also guided by laws such as environmental regulations, minimum wage, restrictions against insider trading, and collusions. It also plays an important role in managing the behavior of the organizations that are mostly uncovered by the government’s laws. Certain actions are detrimental to certain groups like employees, members of a community, and other such groups affected by the organization’s actions, even though they are legal. To regulate those actions of the business and the behavior, having a code of conduct with ethical standards is important as it ensures regulating the management decisions. Honest in the business is another vital role of business ethics. There are certain unethical acts that, though they do not constitute yet, often lead to acts with are not lawful. Therefore, the maintenance of strong business ethics impacts the growth and the success of the business. An organization with proper business ethics, while making decisions, considers the behavior or conduct of the individuals, which will impact the holding the stakes of the organization. Therefore, according to the philosophy, even though while it is legal for a company to act in its own long-term interests, it is also moral for it to think about those who help it flourish.
Importance of Business Ethics
Business ethics helps the organization identify issues relating to it and provide approaches to resolve those issues. The importance of business ethics can be described as follows:
Retention of improved employee: Ethical behavior of the managers is directly related to the organization’s productivity and profitability. The employee becomes loyal towards their organization and morally conducts themselves making ethical choices.
Increase in value of team unity: In a well-structured business ethics environment, the organization’s individuals have better work performance and respect. Thus, it fosters a good working environment and also aids in team unity and productivity.
Increase in professional value: When you have a positive attitude about your work and the people you work with, the quality of your work will improve. It also boasts one’s worth to their coworkers and the firm as a whole
Decision Making Process in Business Ethics
Making decisions is an important part of the business. Therefore, a framework to make the decision is necessary while dealing with ethical issues concerning the business. The role of ethics in making decisions affects how one approaches the decisions or decides to take actions or needs consultation of others while taking decisions. Following are the steps of the process in the business ethics while making a decision:
Understanding the issue in the business is the first step of ethical decision-making.
The second step includes gathering the facts which are relevant to the issue instead of assuming things. Conducting research and getting the facts requires consulting in specific fields, which helps arrive at the right decision. In addition, the experts’ opinions provide a wider perspective and aids in gaining clarity and understanding of the issue.
In the third step, it is important to consider options to look beyond their organization and analyze the performance while dealing with a similar issue. Again, having a handful of options helps provide different solutions that are rather difficult in fewer options or a couple of options.
In the final step, after evaluating the options, the decision is to be taken concerning the code of conduct of the business and the ethical standards. Finally, the decisions and the reason behind are shared with stakeholders and the organization’s individuals.
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