Keywords: Business ethics, business ethics theories, business.
In today’s environment, ethics is about the behaviour in humans which is good or bad. Ethics deals with moral principles and values. With ethics, it can be avoid bad things and do the good things. It is also the rules of what is right and what is wrong. There are many ethical issues arising in many aspect of life such as in business, in workplace, in health care and also in our daily life. Ethics also the moral principles that can be classified in certain groups such as legal ethics, medical ethics, teaching ethics and others. Business is a company or organization or individual that provide services or goods to a customers. I am focusing on ethics in business. Ethics in business context involves the behaviour in business transaction. It also known as corporate ethics which means the ethical practices and policies that used in business. Corporate ethics will give a guidelines to a company to measure what is the right and what is the wrong. Ethics in business can be defined as behaviour, moral principles or value that applied in the world of commerce. The acceptability of business ethics can be determined by customer, government regulators, competitors, interest group and many more.business ethics are implementd in order to get trust between customer with the business organization. Ethical will build the trust among individuals and business relationships. Business ethics are applies in all aspects in business transaction event that transaction from individual or organization. There are many ethical issues in business such as fundamental issues, diversity issues, decision-making issues, compliance and governance issues, and many more. For example is fundamental issues in business is facing with integrity and trust. Integrity means the way we conduct the business matters with honest and full commitment in treating the customers. So the company or business will success and get support from the customers when have ethics in doing business. It is very important in applying ethics in business because the business can be succesfull when get the trust from the customers, vendors, suppliers, shareholders and many more. Business ethics are essential as they keep business persons to operate in a moral pedestal and laws that not only give their the internal satisfaction yet increase sales because many people like to deal with an honest business. So good business ethics should be practice by all businessman because can leading successful in business and people will trust to business trade that provide by business indvidual, company or organization.
The methodology that used in completing this term paper is by using primary and secondary literature to enable get depth understanding on business ethics. The primary sources is from my understanding on the business ethics. From my understanding, i wrote my opinion in accomplshing this assignment. I also do an observation about business ethics that implement in the trade around me and from that i can evaluate the good business ethics and also bad business ethics. By oservation, it teach me a lots about the ethics in our daily life. For the secondary literature which is by reading the information about the business ethics on internet, reading the articles journal from databases. I used to refer the article to get more understanding on the topic and with that understanding i can wrote this term paper. From the reading the articles, i understand what is business ethics and also its importance, challenges , theories and many more. From the primary and secondary literature, i can suggest some recommendation to the challenges in business ethics. The primary and secondary literature is very crucial in complishing the term paper.
Definition and concept of business ethics
According to HubPages Inc (2013), "Ethics" is a set of principles used to determine what is "right" when it comes to the conduct or behavior of an individual. This includes individuals who are acting on behalf of a business entity. Business ethics involves the application of moral standards to the systems and organizations through which provide good services to customer and organizations.
According to http://www.saylor.org in the article that entitled business ethics and social, act ethically in business means more than just compliance with laws and regulation. Business ethics can be define as the application of ethical behavior. It mean honestly, do not do harm to others, compete fairly, and declined to put your own interests above those of the company by its owners, and also its workers
According to Patil (2012), business ethics is a behavior that all businesses stick to. Also known as corporate ethics. Business ethics concepts are concerned with three different kinds of moral issues. Some concepts are related to issues involving the conduct of business within the systems where business operates, including economic, political, legal and other social systems. Other concepts are concerned with corporate issues which is involving questions related to the conduct of a particular company. Other concepts are concerned with examination of individual issues which is where questions are related to the behavior and conduct of one or more individuals within a company. The concepts of business ethics is businesses as "corporate" citizens, "good" business ethics, immoral" business practices, what constitutes a moral "right?" and ideas about justice.
"Good" business ethics involves having and adhering to a code of moral conduct that places the rights and expectations of people over and above the "profit motive" of business. Even though it is the goal of business to make money, the manner in which profit is sought can come under intense scrutiny if it is believed that the rights of human beings are being compromised in the process of making money. For this reason, it can result in good business for companies to practice good business ethics, because moral business practices, in the final analysis, can be seen as "profitable."
According to Grublein (2012), business ethics is a codes of principles and set of corporate values, which can be written or unwritten by the company that evaluates its actions and business-related decisions. Business ethics can be written or unwritten because ethics business and the criteria for what is good and what is bad is formed by the company’s best practices and old culture at all the time.
Terms of ethics has many differences. Ethics has been called the study and philosophy of human conduct emphasis on determining right and wrong. It also has been defined as inquiry into the nature of morality where the term morality is taken to mean moral judgement, standards and rules of conduct. Building on this definition, it can begin to develop a concept of business of ethics. Most people would agree that high ethical standards require both business and individuals to conform to sound moral principles. Most definition of business ethics is reference rules, standards and moral principles regarding what is right and what is wrong in special situations. Business ethics comprises the principles, values and standards that guide behaviour in the world of business.
Concepts of ethics are generated by values, not what is but what ought to be.Values are basic in a culture as they represent fundamental considerations of what is considered ethical by the group.
Business ethics theories
Here are several theorie in Business ethics.
Table 1: Business ethics theories
Business ethics theories
The utilitarian approach.
Business can utilize utilatarian approach to ensuring outcome of various situations to help the maximum amount of stakeholders in the company. This approach focuses on using ethical actions or morally right action that will promote the good value among a society. It is limits the amount of harm as few people as possible.
A rights ethical approach.
This approach is based on the belief which is all persons have rights in life and must be treated with respect and dignity. Morality plays important role in this because individuals himself must use ethical behaviour in order to achieve the goal. Business ethics theories frequently use rights ethical approach by do not imposing their missions, products, or systems on consumers.
Justice as an ethical approach.
Justice as an ethical approach is where all people are treated fairly through society, regardless of race,position,rank, class or others. Also known as the fairness approach. For example, the employee who get awards must the good performance and e the est among the employess in the companies. It must fit the criterion in getting awards.
The common good approach
This approach is to promote the moral or ethical principles that found in a society. Todays, the ethical principles are different based on the country. It is based on their beliefs and culture. So, Business owners and managers must implement these principles based on their country culture because it easily accept and understand by society itself.
The virtue approach.
The virtue approach is it difficult for businesses to implement because it is normative. These principles is to replace the current values if they do not bring the good or best development of humanity.
Importance of Business ethics
Business ethics is very importance in business trade. There are some importance of business ethics which is:
Stop business malpractices
When business ethics is put in the practice, it will stop the business practices. Not all businessmen involve with business practices but there are some immoral businessman doing business malpractices. Business malpractices is involve with unfair trade such as black marketing, selling clone product, selling harmful product and many more that can be harmful to customers.
Improve customers' confidence
Business ethics are very important in increasing customer confidence about the quality of product , quantity of products, price of products, and other products that offered by company or organization. The customers will have confidence and have a trust in doing business that follows ethics rules. The will safe when doing business or buy the product with those companies that follows business ethics.
Survival of business
For business survival, business ethics is compulsory. Dealers who do not follow business ethics usually will have a short term success only. For example they have cheated the customer at once, but the customer can remember and they will not buy the goods again from that businessman besides tell to their friends about that cheating. So the image of that businessman will be negative and leading to failure in the business or in the market. From that, it is important to follow the business ethics in appropriate ways.
Safeguarding consumers' rights
Businessman must protect or respects to the consumers right. Example of consumer right is right to choose, right to complain, right to be informed, and others. By applying good business ethics among businessman, it will safeguard the consumers’ right.
Protecting employees and shareholders
In business ethics, it is required to protect the interest of employees, shareholders, dealers, suppliers and many more from exploitation through unfair trade practices.
Develops good relations
In developing good relationship between business and society, business ethics is essential. This will cause a regular supply of good quality items and services at lower prices to the community. It will also lead to profit for the business thereby causing economic growth.
Creates good image
If a businessman follows all regulations of ethics, then the user acceptance is good. People can accept the goods from business and will not criticized it besides support the business that conducted by those businessman. It will create good images to society when implementing good business ethics.
The consumer gives a lot contribution in the market. Without consumer, the business cannot survive in the market. In business transaction, user or consumer satisfaction must take seriously. When follows the business ethics, the consumer will satisfied to the services then the business can gain lots of profit.
Healthy competition will exist in business when the businessman implements business ethics while dealing with competitor. For example, the businessman will avoid monopoly in business when practice the business ethics.
Challenges of Business ethics
There are several commaon challenges in business ethics:
There is a challenge in recruitment and selection processes in hiring the employee to the company or organization because they are usually embrace the company’s ethics. It is quiet hard to distinguish whether candidates business ethics are consistent with the company before hiring them. By reviewing their resume, interviewing, and reviewing their jobs skills are not enough to determine whether candidates are qualified on the jobs required.
There may be ethical issues related to original founders of the company even before the business reaches a point where the principal fields of business plan to potential investors. All founders must share the ethics values of the similar business principles. If they have conflict principles, they will have a difficult time obtaining financing or obtain business through the start-up process. Typically, groups of friends or business founders came together because they have same vision yet differences can arise when they began to explore the purpose of organization and organization structure.
Ethics refers to the way in doing business and whether company, management and employees conduct business in a manner that complies with the standards and principles of a particular business. But not all employee or staff in the organization can follow the rules in doing the business. There are some unethical business practices among the employee in the business organization or from manager itself.
Corporate Governance is a basically a set of relationships between a company's board, management, its shareholders and the society within an institutional framework. These relationships evolve into the corporate governance framework, which is the system by which companies are directed and controlled. But it is usually quite hard to manage corporate governance in business in order implementing ethics within company’s framework.
There are discrimination happens between staff in the company and also the customer. There are many type of discrimination in such as gender’s discrimination, position discrimination, race, ethnicity and others. For example treating staff differently based on the gender in the company are unethical behavior in the organization. This discrimination can be among the staff in company and also between staff and customer. For example the staff in customer service treating the customer differently based on genders, position and many more.
Recommendation to address the challenges of Business ethics
In response to these challenges, several recommendations are proposed as follows:
Hire temporary workers before hiring to a permanent job
In hiring the employee in the organization, the top management must follow the recruitment and selection processes which are by interviewing, reviewing jobs application and work history, candidate’s skills and many more. The top management can hire the candidates when they are passes in interview but to know that candidates are embraces to company ethics by hiring temporary workers for a several months. After several months, the management can evaluate the employee and after that can hire to a permanent job if they are consistent with the company ethics and also their performance.
Sharing business value, principles and ethics.
Before formatting the business, all the founders must have similar value, principles and ethics because it easy to manage the business. There must no conflicting principles among them business formation because it will lead to failure to the business. They must explore the organization structure and organization purpose before starting the business.
Follows the standards and principles of the company
Management and employees must conduct business in a manner by creating an flexible institutional framework that complies with the standards and principles of a particular business. They must follow the standards and principles of the company that will encourage the participants in the business to contribute the best performance aligned with good practices. The entire employee must follow the rules that are provided in the company and know the business ethics.
Built a good relationship between board directors and executive managers.
Board directors must provide a good guidance to their executive managers such as financial manager, human resource manager, operation manager and others. This relationship will present the company ethics or business ethics. Good corporate governance will lead to good development of frameworks. Corporate governance encourages companies and those who own and manage them to achieve their corporate objectives through a more efficient use of resources.
When have a discrimination issues in the business or in the organization, that individuals must report that kind of bad ethics to management or to Equal Employment Opportunity Commission. The individual itself must file a charge of discrimination under the discrimination act when there is discrimination happen in the organization or in business trade. Besides that, in the company itself must have a discrimination policies and rules to avoid the discrimination among the staff or discrimination to customer. Strict action should e taken to the staffs that practice discrimination in the business.
As a conclusion, business ethics is very important in a business world or in business trade. Business ethics is very important for protection of customer rights, better relation with among staff and society, give the interest to industry, and many more. Business ethics deals with the behavior in the business which is do good things and avoid the bad things. The business ethics is very importance for the survival of the business that handled by the organization or individuals. Business ethics is a process for integrating values such as honesty, fairness, transparency and trust into its policies, decision making, and practices. By adopting the business ethics, it will help the company built the reputation in the business. Besides that, the productivity and performanceof the employee can be improved. Ethics in business will contribute to the employee commitment and they will provide the best services to an organization and also to the customer. Business ethics is very crucial in the business trade in order to manage the business and also the succesfull of the business. Usually the company who apply the business ethics will success and will get trust from the customer, stakeholders, interest group, goverment regulator because they are confident with company that implement a good ethics in trade or in business. Business ethics are essential as they keep business persons to operate in a moral pedestal and laws that not only give their the internal satisfaction yet increase sales because many people like to deal with an honest business. So good business ethics should be practice by all businessman because can leading successful in business.