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Ethics. Its not an easy word to define. Almost everyone wants to live an ethical life, but knowing what that means is not as simple as it sounds! That's where the phrase “ethical dilemma” comes from. In some situations, there are two contrasting ideas that may seem ethical, but it is hard to determine which is actually the right course of action. Some common ethical dilemmas have little consequence: for example, is it right to tell a fib when someone asks you if they look fat or if their bad tasting dinner is delicious? The ethical dilemma there: which is more ethical, lying or being unkind? Other ethical dilemmas become a big more complex: for example, is it right to steal from the rich to give to the poor? Is it right to fight wars in the name of a good cause, even if innocent people are injured? The answers to these ethical questions depend on your definition of ethics!
Dictionary Definition of Ethics
The dictionary defines ethics as:
the study of standards of conduct and moral judgment; moral philosophy
2. a treatise on this study 3. the system or code of morals of a particular person, religion, group, profession, etc. According to this definition, ethics can be one of two things: it can be something that you study and think about, or it can be a code that you follow and live by. Of course, in the real world, ethics is often both. Philosophers who think about ethics usually try to live by an ethical code, while the people who set up a code of ethics often study and think while they are doing so. Of course, knowing that the definition of ethics is a code of morals doesn't really help to define what is ethical, does it? The moral code itself has to provide that definition. So, the question "define ethical" becomes synonymous with the question "define moral."
The 9 Theories of Ethics
Because of the difficulty in defining ethics, which we've already begun to see, philosophers have given a lot of thought to this question. Since they haven't been able to come up with a clear answer either, they've provided 9 theories of ethics that can be used to determine the ethical course of action in a given situation: 1. Consequentionalism: An action is ethical, or not, depending on the consequences of the action 2. Values Clarification: Your ethics should be determined based on your internal values, and not what anyone else thinks 3. Utilitarianism: The action that has the best result for the most people is the ethical action 4. Moral Absolutism: An action is always moral or immoral, regardless of the circumstances 5. Situation Ethics: The ethical nature of an action is dependent on the situation, and decisions must be made out of love and helpfulness in the particular moment. 6. Ethical Realism: The ethical choice is the choice that is the lesser of two evils
Ethical Hierarcicalism: There are many possible choices on the continuum of ethical choices, and we must choose the choice that benefits the greater good
8. Principle Ethics: The ethical decision should be based on an underlying set of logical principles 9. Cognitive Moral Development: Ethical dilemmas should be solved using critical thinking
to understand and change an individual's behavior we need to understand and try to change the communities to which they belong. discussions about ethics in organizations reflect only the "individualistic approach" to moral responsibility.e. which is reflected in the "communal approach. many people viewed an alcoholic as an individual with problems. According to this approach. and it is how an organization ethically responds to an internal or external stimulus. Today. organizational ethics is neither OB. . Although. attention to ethics in business organizations has never been greater. the behavior of the alcoholic requires that we change the entire family situation. nor is it solely business ethics (which includes corporate governance and corporate ethics). it is akin to both organizational behavior (OB) and business ethics on the micro and macro levels. Treatment focused on helping the individual deal with his or her problem. Good leaders strive to create a better and more ethical organization. Restoring an ethical climate in organization is critical. one has to be aware that there are two ways of approaching the subject--the "individualistic approach" and what might be called the "communal approach. But there is another way of understanding responsibility. and 4) systems for confidential reporting. the alcoholic is often seen as part of a dysfunctional family system that reinforces alcoholic behavior. and any efforts to change that behavior should focus on the individual. In many cases. 2) ethics training to executives." Here individuals are viewed not in isolation. however. every person in an organization is morally responsible for his or her own behavior. The four elements necessary to quantify an organization's ethics are: 1) written code of ethics and standards. More often than not. 3) availability for advice on ethical situations (i. Any adequate understanding of. Not so long ago. When talking about ethics in organizations. advice lines or offices). Basic elements of an ethical organization There are at least four elements which exist in organizations that make ethical behavior conducive within an organization. managers. So. and employees. Yet. Organizational ethics is interdependent with the organizational culture. as it is a key component in solving the many other organizational development and ethical behavior issues facing the organization.Organizational Ethics is the ethics of an organization. but as members of communities that are partially responsible for the behavior of their members. Organizational ethics express the values of an organization to its employees and/or other entities irrespective of governmental and/or regulatory laws." Each approach incorporates a different view of moral responsibility and a different view of the kinds of ethical principles that should be used to resolve ethical problems. Importance of Ethics in Organisation From debates over drug-testing to analyses of scandals on Wall Street. Recent changes in the way we approach the "problem of the alcoholic" serve as a good example of the interdependence of individual and communal approaches to problems. ethical problems arising in organizations requires that we take both approaches into account. much of the attention given to ethics in the workplace overlooks some critical aspects of organizational ethics. and effective solutions to.
It is important to the success of a business that those who are in a leadership position set the pace for the others. is often confined to an approach that focuses on individual rights. indispensable for achieving social justice. By ignoring the communal aspects of drug abuse. The communal approach. while opponents of drug-testing argue that drug-testing violates the employee's right to privacy and due process. when we consider what these programs are trying to accomplish. for example. are held paramount. In this case. the good of both the employer and the employee? Using the two approaches to dealing with ethical problems in organizations will often result in a greater understanding of these problems. But perhaps the greatest challenge in discussions of ethics in organizations is to find ways in which organizations can be designed to promote the interests of both The Importance of Ethics In Any Business Organization It is an important aspect of any organization. The debate over drug-testing. (especially in top management). when our willingness to consider both the good of the individual and the good of the community leaves us in a dilemma. individuals are not treated equally. a more just society. Management personnel should be taught that their ethical behavior determines the ethical . should take moral priority over the good of the individual. which stresses the common good. enjoining us to consider ways in which actions or policies promote or prohibit social justice or ways in which they bring harm or benefits to the entire community. The communal approach would ask us to consider questions which look beyond the interests of the individual to the interests of the community: What kinds of drug policies will promote the good of the community. but to do so would maintain an unjust society. Affirmative Action Programs. There are times. and also acknowledge that minorities and women continue to be shut out of positions. then these programs are. most discussions of ethical issues in the workplace take an individualistic approach.These two approaches also lead to different ways of evaluating moral behavior. however. Once again. At other times. both sides neglect some possible solutions to the problem of drug use in the workplace. would have us focus on the common good. bring concerns over individual justice into conflict with concerns over social justice. When facing such dilemmas. on the other hand.This is sad. and needs to be addressed. This article will explain the importance of business ethics and the best advice on how a business can maintain the use of their current ethical standards. They focus on promoting the good of the individual: individual rights. When we draw upon the insights of both approaches we increase our understanding of the ethical values at stake in moral issues and increase the options available to us for resolving these issues. while still remaining competitive. On the other hand. to have proper ethics. regardless of how large or small. When women and minorities are given preferential treatment over white males. the weights we assign to certain values will sometimes lead us to choose those organizational policies or actions that will promote the common good. for example. our values will lead us to choose those policies or actions that will protect the interests and rights of the individual. such as the right to freedom of expression or the right to privacy. which is unjust. many businesses have started ignoring their ethics in order to stay on top with the competition. With the problems of the economy and the extremely high market competition. Dropping preferential treatment programs might put an end to the injustice of treating individuals unequally. in fact. and we are forced to choose between competing moral claims. Advocates of drug-testing argue that every employer has a right to run the workplace as he or she so chooses. many argue that a communal approach.
to be the final determinative force. you should have open communication with members of management and also the employees. your employees will mimic what you do and how you behave. These are the ones that should be avoided at all costs. This is the foundation for the entire ethical code that you design for your business. your employees will follow suit. Deontological Actions are judged as ethical or unethical based on the inherent rights of ." Actions that maximize the "good" (create the greatest good for the greatest number) are preferred. not only in the very beginning. and Ferrell. 2002. All aspects of the ethical rules should be detailed. It is vital to the ultimate success and implementation of the entire set of ethical principles for your business. Every person should be made aware of the company's specific ethics that are used. Finally. They should also have specific procedures that are designed to deal with the issues of ethical misconduct. Table 1 Approaches to Ethics in Business Adapted from: Ferrell. as the business' owner. as well as how crucial it is that they be followed. The moral philosophies or ethical "theories" that have been developed form the foundation for ethics in business. Although you may have an ethical enforcement team. it is still vital for you. Fraedrich. even if they know it is not right APPROACHES TO ETHICAL DECISION-MAKING Philosophers have studied and written about ethics for thousands of years. You should make all your employees. If you act unethical. p. EXACTLY what your business' ethical code is. You should remind all employees of these sets of ethical rules. there should be a team designed strictly for the purpose of watching the ethical actions of all the employees within the company. communication must be open so that employees at all levels can discuss any issues that make come up regarding the code of ethics. and also to have a level of comfort and trust. Actions are judged as ethical or unethical based on the consequences to one's self. They should also be made aware of the wrong ethical behaviors. Teleological Egoism Actions are judged as ethical or unethical based on their results. those that he employs will follow the same ethical behavior. if the owner of the business uses the utmost applications of business ethics. Second. Table 1 shows some of the major ethical philosophies that are applied to business ethics. Ultimately. but also on a regular basis. merely out of loyalty to you. at every level. Each of the ethical philosophies is briefly considered in this section. when creating your business' ethical code. Most importantly. 57. First. In order to promote confidence in each other and the company. They should have specific procedures to identify incidences of unethical behaviors. Actions are judged as ethical or unethical based on the consequences to Utilitarianism "others.behavior of the other employees in the company. There are three main factors that you need to consider when creating an ethical code for your business. Actions that maximize self-interest are preferred. you should have a vision that is clearly explained.
group to group. Individuals are to be treated as means and not ends. procedural. Fig. Actions are judged as ethical or unethical based on the fairness shown to Justice those affected. there are three types of influences on ethical decision-making in business: (1) individual difference factors.individual and the intentions of the actor. and (3) issue-related factors. and culture to culture. (2) situational (organizational) factors. It is the action itself that must be judged and not its consequences. A behavioral model Of ethical/unethical decision making. Actions are judged as ethical or unethical based on subjective factors that Relativism may vary from individual to individual. and/or interactional means. Fairness may be determined by distributive. . 1. FACTORS AFFECTING ETHICAL DECISION-MAKING In general.
According to Kohlberg. Theoretically. or justice) to ethical issues in an attempt to resolve them. can cause individuals to reach different conclusions about ethical issues than they would have on their own. Individual difference factors are personal factors about an individual that may influence their sensitivity to ethical issues. individuals' level of moral development passes through stages as they mature. helps to explain why different people make different evaluations when confronted with the same ethical issue. the organizational factors that affect ethical decision-making include the work group. deontological. the individual looks outside him or herself to determine right and wrong. In the business ethics context. the individual typically will evaluate ethical issues in light of a desire to avoid punishment and/or seek personal reward. the individual assesses ethical issues on the basis of the fairness to others and a desire to conform to societal rules and expectations. Thus. The highest stage of moral development is the "principled" level. Each of these factors. most adults operate at the conventional level of moral reasoning. codes of conduct. SITUATIONAL (ORGANIZATIONAL) FACTORS. and behavior are affected by contextual factors. Individuals' ethical issue recognition. a principled person looks inside him or herself and is less likely to be influenced by situational (organizational) expectations. the individual is likely to apply principles (which may be utilitarian. This section looks at one of these organizational factors. behavioral intentions. The principled level. It posits that an individual's level of "moral development" affects their ethical issue recognition. the supervisor. The lowest level of moral development is termed the "pre-conventional" level. judgment. According to the theory. Research has identified many personal characteristics that impact ethical decision-making. The pre-conventional level of moral development is usually associated with small children or adolescents. individually and collectively. The middle level of development is called the "conventional" level. organizational codes of conduct. and behavior. . and the overall organizational culture. and their related behavior. At the two stages of this level. Individuals at different levels of moral development are likely to think differently about ethical issues and resolve them differently.INDIVIDUAL DIFFERENCE FACTORS. According to Kohlberg." This framework. their judgment about such issues. The cognitive moral development framework is relevant to business ethics because it offers a powerful explanation of individual differences in ethical reasoning. there are three major levels of development. The individual difference factor that has received the most research support is "cognitive moral development. judgment. developed by Lawrence Kohlberg in the 1960s and extended by Kohlberg and other researchers in the subsequent years. in more detail. At the stages of the conventional level. organizational policies and procedures.
the research suggests that issues with more serious consequences are more likely to reach the threshold level of intensity. and enforcement mechanisms that spell out the moral and ethical expectations of the organization. A key part of organizational codes of conduct are written ethics codes. The conduct code must contain communication mechanisms for the dissemination of the organizational ethical standards and for the reporting of perceived wrongdoing within the organization by employees. in and of themselves ethics codes are unlikely to influence individuals to be more ethical in the conduct of business. Likewise. Research suggests that unless ethical behavior is rewarded and unethical behavior punished. and they are expected to pay their full share of the costs for meals or other entertainment (concerts. ISSUE-RELATED FACTORS. In general.Codes of conduct are formal policies. for it is easier to list the things a person should not do than to be precise about the things a person should. Certain characteristics of issues determine their moral intensity. These norms and beliefs are generally proposed. However. etc.) that have a value above $25 per person. the code's effectiveness will be reduced considerably. Almost all large companies and many small companies have ethics codes. the norms and beliefs are then disseminated throughout the firm. Organizations must also ensure that perceived ethical violations are adequately investigated and that wrongdoing is punished. sporting events. . To be effective." Hosmer points out that the norms in an ethical code are generally expressed as a series of negative statements. Conceptual research by Thomas Jones in the 1990s and subsequent empirical studies suggest that ethical issues in business must have a certain level of "moral intensity" before they will trigger ethical decisionmaking processes. that written codes of conduct are unlikely to be effective. the theater. Ethics codes are statements of the norms and beliefs of an organization. Thus. issues that are deemed by a societal consensus to be ethical or unethical are more likely to trigger ethical decision-making processes. An example of a code item would be. Whatever process is used for their determination. Executives must display genuine commitment to the ideals expressed in the written code—if their behavior is inconsistent with the formal code. the code of conduct must be specific to the ethical issues confronted in the particular industry or company. individual and situational factors are unlikely to influence decision-making for issues considered by the individual to be minor. ethics codes must be part of a value system that permeates the culture of the organization. procedures. and defined by the senior executives in the firm. "Employees of this company will not accept personal gifts with a monetary value over $25 in total from any business friend or associate. It should be the subject of ethics training that focuses on actual dilemmas likely to be faced by employees in the organization. discussed. At a minimum.
Q-1 What are the ethical issues faced by organizations in today’s environment? What will be your suggestion for Eliminating the evil of corruption in an organization? Introduction: Ethics. This subject needs special attention because multinationals operate in a large number of countries with varying standards of moral behavior and multicultural perceptions about what is right and what is wrong.its practical essential is best expressed by the seven sins of Mahatma Gandhi. While ethics. but taken together.’ It is a function of one’s consciousness. It represents the practiced value system. Their workface also consists of high diversity with individuals having different values and beliefs. Lobbying: This is a tool of public relations. These all have their positive and negative sides. What is ethics? ‘Ethics is the discipline that examines the moral standards practiced by an individual or a corporate or a society. which are as under: Politics without Principles Wealth without work Pleasure without Conscience Knowledge without Character Commerce without Morality Science without humanity Worship without sacrifice Ethical issues faced by Organizations: Some of the common unethical practices business resort to include: Manipulation of stock markets: In India manipulation of stock market is not uncommon. business ethics is an exceedingly complicated area. guidelines in place for effective ethical decision making. in general. they may assist the businessperson to steer toward the most ethical decision possible under a particular set of circumstances.In summary. although law represents the moral code or standards practices by a society or country to resolve conflicts and allow freedom to achieve their uniqueness. The is important also as economic programs of developed and developing countries cannot only be faster but also will be long lasting if built on strong moral foundation. MNCs generally avoid manipulation of capital markets. one that has contemporary significance for all business practitioners. pursue their goals and live in peace. There are several investigations and a few brokerage firms and individuals have been prosecuted. It is therefore beyond the boundaries of law. however. There are. Some activities may be legal but may not be ethical. Japanese more . is concerned with concepts of right and wrong for societal purposes . social responsibility of business and corporate governance have become hot issues in the wake of a series scandal reported from all over the world.
competition and promotion:In spite of equality laws in different countries companions still practice same bias in selection and other management process on the basis of gender. India. 4.examples • • • • • • Involvement in the community Honesty.The 18th Century economist Adam Smith demonstrated how in a free market the self interest of producers and consumers will produce an outcome desirable to all concerned . Eg: cake and Pepsi. Suggestions to eradicate corruption: 1. 3. Discrimination in selection. colour. including violation of cultural norms and nudity. apart from false information to customers.com. 7. Latin America and Eastern Europe. and race and show ethnocentrism. Planning and execution of a clearly defined award and reward system based on professional ethics. Institution of strong ethical structure based on social values and professional requirements. Speedy disposal of unethical behavior cases. Product Piracy: Lax enforcement of intellectual property rights has resulted in large-scale piracy of music and picture videos. Ethical issues arising from the nature of markets . Surrogate and Deceptive Advertising: There are many ethical issues in advertising. wealth and market power: • • • Monopoly suppliers can exploit consumers Monopsony buyers can exploit supply firms World wide inequality of income can result in unethical practices such as the child labour Ethical issues and society . water cooper and Satyam.g. fake drugs and other intellectual property capital in China. software. 5. It is estimated that 30. 6. Promote a clear understanding of ethical behavior and its advantages in individual and business growth.000 shops in Shangai alone sell pirated videos. Sound appraisal system.than other countries spend millions of dollars in the US every year to bend rules in award of contracts or to get sensitive information or restricted equipment. 2. intensive faming The degree of safety built into product design Donation to good causes . Strong action against unethical behavior. truthfulness and fairness in marketing Use of animals in product testing Agricultural practices e. 8. Sexual harassment at workplace is a growing trend. world.But the market can also lead to inequality of income. Eg: Enron. Fudging of Accounts and Balance Sheet: It is very common in developing countries like India and Indonesia to manipulate accounts to avoid taxes or manipulate share price before public issue. Transparency in working. Institution and execution of sound process of business.
especially in relation to groups such as the elderly Counterfeit goods and brand piracy Copying the style of packaging in an attempt to mislead consumers Deceptive advertising Irresponsible issue of credit cards and the irresponsible raising of credit limits Unethical practices in market research and competitor intelligence Unethical practices relating to products . safety and environmental standards .examples • • • • • • • • Selling goods abroad which are banned at home Omitting to provide information on side effects Unsafe products Built in obsolescence Wasteful and unnecessary packaging Deception on size and content Inaccurate and incomplete testing of products Treatment of animals in product testing Ethics and the supply chain . tobacco Involvement in the arms trade Trading with repressive regimes Ethical issues arising from internal and industry practices .It would be hypocritical to claim to be a ethical firm if it turned a blind to unethical practices by suppliers in the supply chain.examples • • • • • • • • • • • Pricing lack of clarity in pricing Dumping – selling at a loss to increase market share and destroy competition in order to subsequently raise prices Price fixing cartels Encouraging people to claim prizes when they phoning premium rate numbers “Bait and switch” selling .g.g. spillages and leaks The selling of addictive products e.• • • • • The extent to which a business accepts its alleged responsibilities for mishaps.attracting customers and then subjecting them to high pressure selling techniques to switch to an more expensive alternative High pressure selling .e. In particular: • • • • The use of child labour and forced labour Production in sweatshops Violation of the basic rights of workers Ignoring of health. honouring the spirit as well as the letter of the law in respect to warranties and after sales service The number and proportion of women and ethnic minority people in senior positions The organisation’s loyalty to employees when it is in difficult economic conditions Employment of disabled people Working conditions and treatment of workers Bribes to secure contracts Child labour in the developing world Business practices of supply firms Unethical practices in marketing .examples • • • • • • • • Treatment of customers .
This is an audit of all the firms activities Purpose: • • • To check that ethical principles are being pursued To check the extent to which actions are consistent with the organisation’s stated ethical intentions And to establish action plans if they are not Q5. when negotiating deals Behaviour towards society e.g. when dealing with customers and suppliers Corporate behaviour e. Bribery This is a key ethical issue in business • • • It first needs to be stated that bribery to secure a contract (especially a contract with a public sector body) is against the law and severe penalties can result However.g. when recruiting Behaviour towards the environment e. it is sometimes seem (wrongly) as a victimless crime and is often rationalised in terms of “if we don’t offer a bribery.g.g. others will” From a moral or ethical perspective it should be approached not in terms of “can we get away” with it but is it right to offer a bribe to secure a contract Institute of Business Ethics Suggestions for Good Practice The Institute recommends that organisations issue statements of ethical practice in respect of: • • • • • • • • • • • Relations with customers Relations with shareholders and other investors Relations with employees Relations with suppliers Relations with the government and the local community The environment Relations with competitors Issues relating to international business Behaviour in relations to mergers and takeovers Ethical issues concerning directors and managers Compliance and verification What is an Ethical code? This is a It is likely to cover: • • • • set of principles governing morality and acceptable behaviour Personal behaviour e.An ethical producer has to be concerned with what is practiced by all firms (upstream and downstream) in the supply chain. . when deciding on process Ethical audit . Characteristics of an ethical leader Here are my weekly tips to help you and your colleagues become more effective and respected leaders.
pointing fingers. Charisma.” 9. Max Weber. 6. Researchers and thinkers made efforts linking some of the theories across these leadership islands.) Leadership By Example Leaders earn the right to expect others to do things by doing those things themselves.) Encouraged Initiative People are rewarded for Walking The Talk rather than complaining. Situational. and practices are evaluated to ensure they reflect and support organizational values. But each model has its own pros.) In Sync Policies and Procedures Rules. 3. Latest researches are conducted on Situational & Transformational leadership styles.) Values-Based Selection The degree to which people subscribe to and practice organizational values is a key criterion in hiring and promotion decisions. or waiting for others to take the first step. 4.) High Values Awareness Values are regularly communicated and discussed to ensure awareness and understanding throughout the organization. Incremental Change Emphasis is placed on many small improvements rather than quick-fix fads and “programs of the year. 2.) Attention To Perceptions Climate surveys and other perception-collecting activities are important components of organizational assessment and change strategies. Transactional Leadership Vs. Behavioral. policies. Leadership gurus presented new models as variations to the already existing models. 8.) High Values Accountability People are evaluated on values-driven practices as well as results—with zero tolerance for conscious values violations. 10. 7. Transformational.) Values-Driven Education Training and other developmental activities teach people how to demonstrate ethics and apply organizational values.) Steady. 5. assumptions & limitations.) Values-Driven Decision Making Decisions are checked to ensure they are in accord with organizational values BEFORE they are implemented.1. Transformational Leadership Number of Leadership theories evolved on the basis of Trait. . cons.
This type of relation is called as ‘Transformational’. In general. let us review our everyday life. Transformational Leaders work toward a common goal with followers. Leaders do exist in this world with these behaviors. dedicated. at one point of time. Warren Bennis & Nanus are few important researchers in the area of transformational leadership. In business. The more exchange they have the more stronger the relation. a relationship between two people is based on the level of exchange they have. In life.Bass. to engage the full person of the follower … to a higher level of need according to Maslow’s hierarchy of needs” … Bass As exactly said by Bass – “the transactional leaders work within the organizational culture as it exists. put followers in front and develop them.MacGregor Burns. committed. Leaders who show these kind of relationship are called ‘Transactional Leaders’. Bernard M. conditions and rewards (or punishment). In this way. mom’s dedicated service to her kid. Understanding the difference between transactional and transformational leadership is vital in getting the whole concept of transformational leadership theory. if something is done to anyone based on the return then that relation is called as ‘Transactional’ type. In politics. economic exchange to met subordinates current material and psychic needs in return for “contracted” services rendered by the subordinate …. Following table shows difference of transactional and transformation leadership. things happen without expectation from other side. Bass Transformational Leader: “recognizes and exploits an existing need or demand of a potential follower… (and) looks for potential motives in followers. As a starting point. in followers reward. Transactional Leadership Transformational Leadership * Leaders are aware of the link between the effort * Leaders arouse emotions in their followers which and reward motivates them to act beyond the framework of what may be described as exchange relations * Leadership is responsive and its basic orientation is dealing with present issues * Leadership is proactive and forms new expectations * Leaders rely on standard forms of inducement. seeking to arouse and satisfy higher needs. Mom plays a major role in shaping up the kid’s future life. These relation is all about requirements. inspire followers to transcend their own self-interests in achieving superior results. take followers’ to next level. Say. leaders announces rewards in turn to the productivity. and engages the full person of the follower” … Burns The leader who recognizes the transactional needs in potential followers “but tends to go further. leaders announces benefits in their agenda in exchange to the vote from the citizens. it can be anything. punishment and sanction to control * Leaders are distinguished by their capacity to followers inspire and provide individualized consideration. the transformational leader changes the organizational culture”. Mom doesn’t expect anything from the child and the service she provides in raising the child is unconditional. Transactional Leader: approaches followers with an eye to exchanging one thing for another … Burns pursues a cost benefit. Your manager expects more productivity from you in order to give good rewards. Exchange need not be money or material. * Leaders motivate followers by setting goals and intellectual stimulation and idealized influence to . seeks to satisfy higher needs.
Vendors will be more inclined to extend credit to a company that has a reputation for being above board in its dealings. the customers may continue to shop at a store that they feel has been less then honest with them but only for the really good sales. Vendors that are left hanging or who are threatened with a boycott of their products if price demands aren’t met may have no choice but to play along but you can be sure they tell other vendors how they were treated. Customers are willing to spend a little more if they feel certain that they will be treated fairly and won’t have to worry about being cheated. everything else they will buy somewhere else. Are business ethics or profits more important? Results so far: Ethics Profits 75% 605 votes Total: 810 votes 25% 205 votes Ethics vs Profits Ethics Watching the bottom line is very important when one is in business but even more important is keeping a vigilant eye on one’s business ethics. The general person may seem stupid to some top executives but eventually that customer smartens up and notices the bait and switch or the inferior merchandise or the out of date product and begins to shop somewhere else. It means a less stressed work environment which in turn means less employee sick days. to develop strong emotional bonds with followers * Leaders motivate followers to work for goals that go beyond self-interest. their followers * Leaders create learning opportunities for their followers and stimulate followers to solve problems * Leaders possess good visioning. rhetorical and management skills. For a business to put profit ahead of ethics is the same as being ‘penny wise but pound foolish’. Companies know that if they gear up production to supply WalMart then they must sell to Wal-Mart at the price Wal-Mart demands or they will be dropped and . Businesses’ that always behave in an ethical manner will spend less on lawyers and won’t need to spend as much on advertising as their less trustworthy competitors do. Sure there is gain today but at what cost? Customers can be mislead.promising rewards for desired performance * Leadership depends on the leader’s power to reinforce subordinates for their successful completion of the bargain. Putting business ethics first means that employees will be loyal not out of fear but out of respect. and accounting corners can be cut to fool the investors but like a house built upon the sand it falls apart eventually. To have business ethics means treating all stakeholders fairly and to treating people and other businesses fairly is showing them respect. Oh. vendors can be strong armed. No store can exist selling only their ‘come on or loss leader” items.
even Wal-Mart will eventually succumb to this fact of life. All of our parents. Business ethics can be profitable . It’s Karma. whereas ethics should be the coupled together later on. They say that with a pure heart. it means that the primary focus of a growing business is profits and hopefully when one's business is large enough. or science. However. it can be coupled with ethics that can change society for the better. is exactly as its meaning. A good analogy would be to portray a growing tree from a seedling. most people will see the generosity with greedy eyes. are making billions of dollars. one will one day reap the rewards they have given out as good deeds.left with a glut of product and no place to sell it. Profits In a strictly business topic. will keep us on the track of good consciousness for a better world. it only works in a utopia. on helium. an enterprise that exchanges goods or services for wealth. whose quarterly revenues cannot even match 10% that the big boys are making. Should the tree try to grow apples for the inhabitants of the forest when it is young and fragile. which are just a plot to make money from others by giving the service of making money. profits should be the primary focus. Because everyone works for a profit. profit is key. we cannot tell the future. This does not mean that banning ethics is the answer. government. and two. no. teachers. the idea that one will go out of his or her own way to enrich someones else's wealthiness without a clear return in value is considered "crazy. Why is it that fast food chains in America. even though they are ethical. even people here. exchanging goods and services for wealth. serves no purpose and is unethical. For instance. in order to cut their product costs and stay in business. not the person behind it. and elders told us that working hard and doing good in the world is the key to success and wealth. This has caused several companies to have to move their production out of the U. Therefore by starting and maintaining a business. and live a happy life. pyramid schemes. or focus on growing big and tall to the point where it can make thousands of apples for the entire horizon. This contrasts the agencies that try to prevent obesity and promote good living. we can definitely assume that the inventors of the pyramid schemes are sitting on top of their "business" making thousands. because humans find most other humans insignificant and even though another may show graciousness and generosity. We hope for ethics in this world and that one day our leaders. if not millions. and one CAN deny that without ethics a business will fail." And its true. Mostly everyone in this world works for a profit. it got Enron and one day it will get to Wal-Mart because what does around comes around. work for a profit (do to the fact the majority do not donate their revenues). but for this moment in time in a business field. One cannot deny that high revenues signal a strong business. profit is the driving force of success and growth. Certainly profits must not be ignored after all that is why businesses are in business but trying to realize a profit while ignoring or only paying lip service to the ethics of one’s business will not work in the long run. whether in business. Therefore I say.S. of dollars laughing at the ethical man who cannot keep his own business afloat selling something with actual worth. whose method of manufacturing food and marketing is considered very unethical due to the fact the food is considered "unhealthy" and it markets to children. This is a speculation because one.
Sure they might make a quick profit through their unscrupulous acts. Corporations have the reputation of being ruthless and being all about the profit. How often do you search for information online to find out about a product or business? Chances are if you regularly engage in looking up information you've seen how vocal people are when it comes to companies they've done business with. news and even reviews on the Internet this will increase your chances to be more profitable. There are many significant advantages to integrating a philosophy of ethics into your business. In today's competitive environment the companies which act unethical will lose in the long run. . All it takes is a few bad reviews on the Internet outlining unethical practices and this will live on forever in every search engine. *Good Ethics Lead to a Loyal Following Customers tend to shy away from businesses that are known to be unethical or recognized for being less than stellar in their behavior. If you read the headlines they often sound something like "CEO bilks millions". Although to another degree this is a stereotype because it doesn't mean that profits and ethics can't peacefully co-exist. One bad experience. When you set an example of integrity and establish a sound moral compass across your business this will directly impact success and growth. While profits are obviously an important consideration there is no good reason ethics can't play a part in it. but this kind of profit isn't the sustaining kind. When your business acts in an ethical fashion it gives your business a positive impression and as a result you'll achieve a good reputation. While some companies do engage in these kind of unethical activities in the pursuit of profit.Business and ethics almost sounds like an oxymoron. but this isn't going to sustain them in the long term once those negative headlines emerge. What some profit-intense management members fail to consider is that establishing a good ethical foundation in an organization can actually give the company a competitive advantage and increase profits. Profits and ethics can live in harmony and one can even enhance the other. *Solid Reputation Businesses that regularly practice good ethics attract consumers. in the long run you'll often hear of their demise rather than their success. this is the face you'll be showing the world when people look for information which also will remain visible in search engines for customers to see. negative treatment or shady business deal is all it takes for a customer to be willing drop their loyalty. "Executives involved in illegal activity" or "Corporation harms the environment". profitable and ethical. all of which impact profitability. There are many companies which are successful. Over the long term their dishonesty is going to catch up with them because they won't be able to retain loyal customers. Sure they might attain some quick short term profits. Here are a few other advantages a strong moral compass will lead your business to receive. To an extent this is perhaps true because a for-profit company's mission is to return a profit to its stakeholders. If your company acts ethical. Word of mouth and good press are positive referrals and if your business can receive the stamp of approval from customers.
Even if your prices are a bit higher. When you can attract customers based on your good name. Those short term profits won't add up to much if your budget is spent trying to continually attract new customers because your unethical practices drive existing ones away. If people do a search for your kind of product or service they are going to comparison shop and if it comes down to a business known to be ethical and one that is not as reliable due to shoddy ethics. Profits and ethics are not exclusive. this further increases visibility and establishes yourself as having a solid reputation. A business who is known to be unethical isn't going to have this competitive advantage. When you do business with other ethical companies and forge solid partnerships. In the long run this further increases your profit margin. It is a lot less expensive to keep returning customers than it is to attract new ones. takes a level of corporate social responsibility and forgoes ruthless and cut-throat practices this is of immediate value to your business. *Competitive Advantage Acting ethically when conducting business gives you a strong competitive advantage. chances are your company will be the one selected. people want to pay for quality and honesty because they know they'll be getting exactly what they have been promised. in fact with today's competition it is probably now more important than ever to engage in ethical business practices.If you can establish a loyal customer base you'll be guaranteed ongoing profitability. Once you're established as a company which conducts business honestly. If you are associated with companies who are known for their immoral activities. It is in your best interests to run a morally strong organization . Customer loyalty is definitely more profitable and good ethics is a good way to keep people returning. there is a chance this reputation will transition to you. On the other hand if ethical companies recognize you as one who is comprised of good moral standing and only works with companies who hold similar business philosophies they'll do business with you. *Attract More Business It goes without saying that ethical companies attract customers for many of the same reasons mentioned above. *Good Reputation for Building Partnerships Creating strong partnerships with other ethical companies is another advantage to running an ethical workplace. but if you can't sustain your customers it is going to cost you in the long run. In today's global economy businesses are often dependent on one another for sustainability and growth. reputation and quality product or service this is very profitable. Consumers run the market and if they don't like the way you do business they'll simply turn to one of your competitors.
If you don't have integrity. The world of business is generally perceived as jungle where the bottom line takes precedence over all other matters. The drive for success in the marketplace and to maximize return of capital can lead a company astray with disastrous results. WorldCom. Xerox and other scandals shook public confidence in ethical value system of organizations. Ford India. "If you have integrity.A business that makes nothing but money is a poor kind of business. nothing else matters. Rockwell Automation. profitably running businesses suffer from a downfall and some seemingly effective corporate receive a great fall in their profits and popularity all due to the lack of business ethics. While it is certainly true that profits are the true measure of success. The company and its management might get diversified to malpractices. and momentarily gained fame and fortune but what was the end result?? Many companies strive for and achieve ethical behavior. nothing else matters. Successful businesses fail. This is a complex journey especially during tremendous economic pressures. As is very rightly said by Henry Ford . But it must understood very clearly Relativity applies to physics. not ethics (Albert Einstein) Profits and ethics are in reality part of the same equation. ONGC it is inferred that Ethics remain being important in business and strong ethical values takes the business a long way. There are companies that have crossed ethical lines in the pursuit of profit. Any corporation large or small ultimately lives by its reputation. commercial ruthlessness doesn't necessarily lead to unethical practices. Hence in situations such as these referring to morality to help decide what needs to be done should take precedence. Satyam. Looking at names like Tata group." -Alan K. There sometimes arises an inevitable conflict in the company between their moral obligations and improving the bottom lines. Ethics must sit at the top of the mountain for any successful company that wants the trust of the consumers and investors. ITC. There are very few second acts once the public perceives the organization flawed by dishonesty or inferior quality. But ultimately companies following the path of ethical value system succeed in long run as sooner or later consumers learn to separate fact from fiction. Enron. Hindustan Unilever. Ethical decision-making gets especially interesting when organizations must reconcile their core values and show a healthy bottom line which end up in conflict with one another.******** Can Ethics and a Healthy Bottom Line For Companies Co-Exist? There's a view that soaring profits and ethics are mutually exclusive concepts. A business that lacks ethical principles is bound to fail sooner or later. however. Nowadays Money and Ethics are seen to be diametrically opposed to each other but it turns out money and ethics do have much in common. Ethics are important not only in business but in all aspects of life because it is an essential part of the foundation on which civilized society is build. Simpson . the two can co-exist. Infosys Technologies. A corporation that wishes to grow and increase its financial return to its owners must balance ethics and operations.
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