ASSIGNMENT # 1

Topic : Importance of Ethics in Business

Course Title : Business Ethics

Submitted to : Ms. Rabia

Submitted by : Semra Ayub (BBA-5B)

Registration No. : 14226

Dated : 29th September 2010

 WHY IS STUDYING ETHICS IMPORTANT IN BUSINESS?

INTRODUCTION:

Whenever any organization starts a business, its main objective at the moment is to be successful by
ensuring profits at the end of each accounting period.

To make this happen; not only professionalism and specialization are needed in the business but ethics
is also needed on equal basis because it forms the values and principles which direct the business to
operate in the very right manner that helps it be regarded as a good business as it transforms its
transaction into benefits for all; for itself and for the environment and its element among which it is
operating.

BUSINESS ETHICS CAN BE DEFINED AS:

The branch of ethics that examines questions of moral right and wrong arising in the context of business
practice or theory.

FOLLOWING ARE SOME OF THE MANY REASONS THAT JUSTIFY THE EXISTENCE AND
IMPORTANCE OF ETHICS IN BUSINESS:

1. Establishment of an Efficient and Effective Working Environment:

Ethics improvises the working environment and through its codes it enables everyone element
to do the tasks with efficiency and choose effective practices to accomplish the goals of the
same which all results in a productive environment within the organization.

2. Builds a Good Reputation of the Organization:

Ethics puts forwards a good reputation of the organization in the outer world because when its
use in the business practices and processes act as the ticket to the organization’s creditability
and reliability which builds its good image in the eyes of stakeholders and the potential users.

3. Makes the Organization a Better Employer:

Ethics portrays the idea that a particular organization where it is being implicated will provide
you with better career opportunities by offering better jobs as compared to other organizations
and at the same time it ensures job satisfaction attracting potential job candidates.

4. Provides Motivation to Employees to do their Best:

Ethics also guides the working employees as how to do their jobs in the sense it motivates them
to use their talent, capabilities, experience, expertise and skills up to the maximum level
possible to provide benefits as a whole for the whole organization and its stakeholders.
 5. Encourages Mutual Understanding and Reduces Working Conflicts:
Ethics encourages elements like co-operation and team work which increases mutual
understanding among the employees as they learn to put aside their difference which reduces
conflicts which are destructive in natures and in turn gives space to discussions which are
constructive in nature and work as a team where each other’s skills, talent and potential are
complementary in achieving significant goals.

6. Fulfillment of Social Responsibility:

Ethics directs the attention of the organizations towards the social causes and issues of the
society and encourages them to contribute from their behalf in order to bring betterment in the
areas of society where such needs exist including steps for environmental causes, health issues,
aftermaths of natural disasters and progress of potential small business areas.

7. Encourages Effective and Efficient Business Transactions:

Ethics helps in carrying out the business transactions in an even way i.e. it ensures that are held
in the right manner where they are violating any rules and regulations whether of legal or
societal concerns. They are done in the best interest for all.

8. Ensures Equal Employees Opportunities (EEO) Practices:

Ethics helps in formation of programs and practices that ensures equality in the working
organization where every employee is able to avail equally important and productive
opportunities and benefits. No one is able to exercise biasness or favoritism on any base like
gender, cast, position etc.

9. Strengthens Good Customer Relationship Management (CRM):

Ethics helps in the acquiring and maintaining long term relationships with the customers as by
providing the value which benefits the customers’ needs and wants and also adds to their
welfare by providing ethical value. Through this way; their loyalty is earned which results in
customer retention making more ways to market share opportunities.

10. Strengthens Vertical Integration:

Ethics also helps in vertical integration which means establishing good, profitable and long term
relationships with the suppliers (backward integration) and with the distributors (forward
integration) as the organization also puts into consideration the benefits of its partners along
with its own.

CONCLUSION:

It therefore can be said that ethics is the ingredient to purify the soul of the organization which proves
its worthiness in the conduct of business as in simple words: business ethics provides the motivation to
carry out the business and its transactions based on ideas of right and wrong.