Importance of Business of Ethics

Ethics is important to business for several reasons as stated below:-

(i)    Ethics corresponds to basic human needs. It is a human trait that man desires to be ethical; not only in his private life but also in his business affairs where, being a manager, he knows his decisions may affect the lives of thousands of employees. Moreover, most people want to be part of an organization which they can respect and be publicly proud of, because they perceive its purpose and activates to be honest and beneficial to the society. Most top managers would like to respond to this need of their employees; and they (managers) themselves feel an equal need to be genuinely proud of the company they are directing. These basic ethicalness compete the organization to be ethically oriented.

(ii)    Values create credibility with the public. A company perceived by the public to be ethically and socially responsive will be honored and respected even by those who have no intimate knowledge of its actual working. There will be an instinctive prejudice in favor of its products, since people believe that the company offers value for money. Its public issues will attract an immediate response.

(iii)    Values give management credibility with employees. Values are supposed to be common language to bring leaderships and its people together. Organizational ethics, when per-ceiled by employees as genuine, create common goals, values and language. The management has credibility with its employees precisely because it has credibility with the public. Neither sound business stratifies, nor can a generous compensation policy and fringe benefits win employee credibility; and perceived moral and social uprightness can.

(iv)    Values help better decision making. Another point of great importance is that an ethical attitude helps the management make better decisions, i.e., decisions which are in the interest of the public, their employees and the company’s own long term good, even though decision making is slower. This is so because respect for ethics will force a management to take various aspects-economic, social, and ethical-in machine decides.

(v)    Ethics and profit Ethics and profit go together. A company which is inspired by ethical conduct is also profitable one. Value driven companies are sure to be successful in the long run, though in the short run, they may lose money.

(vi)    Law cannot protect society, ethics can. Ethics is important because the government, law and lawyers cannot do everything to protect society. Technology develops faster than the government can regulate. People in an industry often know the dangers in a particular technology better than the regulatory agencies. Further, government cannot alpacas regulate all activates ethic are harmful to society. Where law fails, ethics can succeed. An ethical oriented management takes measures to prevent pollution and protect workers health even before being mandated by law.

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