Ethics in Business

1. Ethics in Business MGM4136

2. Definition of Ethics • Ethics refer to a body of principles or standards of human conduct that govern the behavior of individuals and groups. • Business ethics means a form of the art of applied ethics that studies ethical principles and moral or ethical problems that can arise in business environment. It deals with issues concerning the moral and ethical rights, duties and corporate governance between a company and its shareholders, employees, customers, media, government, suppliers and dealers. Thus, ethics plays important roles in the business activities

3. Importance of Ethics in Business • Ethics is important not only in business but in all aspects of life because it is the essential part and the foundation on which the society is build. Moreover, organization's culture has sets standards for determining the difference between good or bad, right or wrong, fair or unfair in business world.

4. Importance of Ethics in Business • Some management guru emphasized that ethical companies have an advantage over their competitors. “Consumers are used to buying products despite how they feel about the company that sells them. But a valued company earned a kind of customer loyalty most corporations only dream of because it appeals to its customers more than a product,” said Cohen and Greenfield.

5. Importance of Ethics in Business • Ethics need to be high on the list for organizations because it will lessen total negativity within the organization and encourage the performance from both the managers and employees. Furthermore, ethics can be understood as important to the individual because the individual's reputation is on the line, and from this ongoing positive reputation, success and personal satisfaction will be the results.

6. Ethical Issues in Business • 1/Social responsibility that a business is supposed to have towards the community. For example, the Exxon Mobil oil spill. It is the responsibility of the business to protect the interests of the people, animals and environment where it uses resources. It became public relations nightmare for the company due to improper handling of the issue. Now, Exxon has been ordered to clean up the area which it should have taken care not to damage in the first place. If there is indifference to business ethics in this case, it will cause negative public image for the company and a huge lawsuit.

7. Ethical Issues in Business • 2/ Inter-company dealings and negotiations. Rivalries in business often can turn ugly due to the amount of money and ego riding on them. For example of

8. Ethical Issues in Business • 3/ Stakeholder protection. Every business has stakeholders other than its owners – the employees, the stockholders and the general public. They have to ensure that the rights and interests of all of these groups are adequately protected in the course of its operations. For example, the harassment and bad working conditions of employees in Wal-Mart led to the generation of a lot of negative press about the outsized department store. This gives the opportunity to the rival to get ahead while the company is busy trying to do some damage control

9. Conclusion • The ethical issues in business have become more difficult because of the global and diversified nature of many large companies. Moreover, because of the complexity of economic, social, global, natural, political, and legal and government regulations and environment, hence the company must decide whether to adhere to constant ethical principles or to adjust to domestic standards and culture.