BUSINESS ETHICS

WHAT IS ETHICS?

 The term “ethics” is derived from the Greek word “ethos” which refers to character, guiding
beliefs, standards and ideals that pervade a group, a community or people.
 In philosophy, ethics defines as what is good for the individual and for society and
establishes the nature of duties that people owe themselves and one another.
 Ethics can be defined as set of moral principles and values about what is fair and unfair;
what is right or wrong; true or false; proper and improper; and what is right is ethical and
what is wrong is unethical.

As a business owner and leader, you’re going to make a lot of important decisions for your
company. On everything from marketing to sales, operations to human resources, your team
will look to you for guidance and ask which direction they should go in. In addition to keeping
profitability in mind, you also have to look at decisions from an ethical standpoint. The role of
ethics in decision making affects on how you approach decisions, how you decide which action
to take and whether or not you need to consult someone else for their viewpoint.

WHAT IS BUSINESS ETHICS?

The definition of business (corporate) ethics can be expressed in many ways:

 Business Ethics means applying the principles of general ethics to business practices.
 Business Ethics is a practice that determines what is right, wrong, and appropriate in the
workplace.
 Business Ethics are ethical standards or the philosophies, practices, norms and principles
that guide the owner or management on their day to day business decisions.
 Business ethics is about doing the right thing when it comes to the establishment and
enforcement of a business’ policies and procedures and involves creating a culture that is
honest and has its stakeholder’s best interest at heart.
 Business ethics is described as a set of rules that a business or organization follows.
 Business ethics is a code of conduct that individuals of an organization would be
expected to follow and uphold.
 Business ethics helps provide employees with a set of guidelines on how they are
expected to act and behave in the workplace.

Characteristics of Business Ethics:

 Business Ethics is greater than law.
 Business Ethics concerns itself with the relationship between business objectives,
practices, and techniques and the good of society.
  Business Ethics are based on moral values and principles like human welfare, service
to society, good behaviour, fairness, honesty and sincerity.
 Business ethics reflects on the behaviour of a businessman while conducting a
business, by observing morality on his business activities.
 Business Ethics can be strong preventive medicine to the organization.

Scope of Business Ethics:

 Moral duties towards society and government.
 Moral duties towards various stakeholders.
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IMPORTANCE AND ADVANTAGES OF BUSINESS ETHICS:

An organization can never succeed if it ignores ethics on its business practices. Ethics is the
key to success in every organization. The top management of an organization ought to
develop “Code of Discipline and Ethics” also sometimes referred as “CODE”. It is made to
enable the organization to have:
 Good reputation.
 Better decision-making.
 Growth of business.
 Better employee-employer relationship.
 Employee growth.
 Prevention of court case cost.
 Enhanced employee commitment.
 Prevention of Fraud.
 Better service to the society.
 Avoid conflict of interest.
 Maintain high ethical standards in the performance of its employees’ respective duties
and responsibilities.
 Promote and increase level of confidence among the consumers and other stakeholders
with regard to the production of goods and delivery of services.
 To uphold global competitiveness.