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Business ethics or corporate ethics dictates the policies and best practices that address ethical morals and hardships faced while operating a business. The best practices or code of conduct are applicable to all stakeholders associated with the corporate including individuals and the entire organization and how the stakeholders should conduct themselves to maintain an ethical decorum and legality while running a business. A clearly defined business ethics basic guideline helps taking decisions when the company or an individual stakeholder faces an ethical predicament.
Need for Business Ethics
“Ethics is knowing the difference between what you have a right to do and what is right to do”
said by Potter Steward (former American lawyer and judge)
The concept developed in 1960s-70s as globalization started taking world business to the next level. With rising interaction and an increasing focus on customer satisfaction, respecting cultural norms, social causes started to become an integral part of the process to connect a chord with the customers. For adding maximum value, corporates started following practices that showcase honesty, transparency, equality, integrity, loyalty, respect, compassion, and fairness. It also assisted in building brand value or goodwill in the market, along with creating a trust level with customers or clients.
As a company expands, its communication within existing stakeholders and new stakeholders increases. For the business to operate smoothly, rules and regulations set by the company help the stakeholders to follow ethical guidelines and conduct themselves virtuously with each other. Business ethics also supports fair practices being conducted in the business and adhering business commitments. The best practices assist in deciding the right path and not to take a wrong path for immediate business gains. It ensures that when two entities or individuals carry out a business deal, there is fairness maintained in the agreement.
For example, suppose a TV manufacturing company expects quality spare parts from its suppliers in a given time, the suppliers are liable to remain committed to the business deal i.e. to provide spare parts that have all gone through quality checks, and not a single defective part should reach the manufacturer which may lead to production hassle or customer loss for the manufacturer. If a supplier fails to comply with quality issues or time commitment, the manufacturer can experience considerable criticism from its end-users.
#Business #Ethics #StockMarket #Kalkine
