Ethical issues in the business

 Business ethics are moral principles that guide the way a business behaves.
 Acting in an ethical way involves distinguishing between right and wrong. And then making right choice.

 Ethics is a branch of philosophy which seeks to find answers about the moral concepts like good, bad, evil, right and wrong
etc.

 Honesty applies to every part of running a business while making profit.

 Personal ethics are usually considered as the foundation of for running ethical business.
Ethical issues in the business.

 The past conception of the companies about the ethical issues in the business was related to administration of the rules,
regulations in the organisation.

 Today business from the top level management and the business owners have understood that this concept of ethical issues
in business is far superior than handling the rules and regulation
 The function of this business unit is to provide understanding about the four basic aspects of a business’s Product, Price, Place
and Promotion.
 It provides interface to the management related not only to the customers but the other related parties like media, investors,
distribution system, supply chain partners, legal framework, as well as others.
 Marketing can be defined as “practice that emphasize transparent, trustworthy, and responsible personal and organizational
marketing policies and actions that exhibit integrity as well as fairness to consumers and other stakeholders”.
 Accounting ethics articles help in understanding the importance of business code of ethics, besides the profit/loss, balance
sheets and financial statements.
 Enhancing the financial figures and statements which is manipulated for the purpose of achieving something which is
unethical.
 The most fundamental or essential ethical issues that businesses must face are integrity and trust.
 When customers perceive that a company is exhibiting an unwavering commitment to ethical business practices, a high level
of trust can develop between the business and the people it seeks to serve.
Advantages:

 Business ethics offer companies a competitive advantage.

 Good will of the firm hikes depending on its responds towards it ethical issues.
 Productivity through rigid, firm and sincere workers as well as other business chain members.
 Through increasing morale and trust business can increase their market share.
 Publicity due well and ethical performance of the company. ‘Words of mouth’ is the fastest and best source to gain market.
Thus, a good performance will help in publicity through words of mouth of public.
 Acceptance of product.

For example: most of consumers prefer classmate’s notebook of ITC just because it is eco-friendly and it contributes a part of
its profit for social welfare
 Disadvantages:

 Business ethics reduce a company’s freedom to maximize its profit.

 Diversity in achievements.
For example. A company may diverse from its achievements and turn towards any other directions.
 Extra expenditure in some cases.
For example, in some cases company may incur extra cost for solving certain ethical issues like accident compensation,
solution for pollutions etc.

 Now that we understand the idea of business ethics, it is important to practice good ethical behavior. Leading by example;
teaching by example; being a role model; these are all things that will come if you practice ethical behavior and choose to
make the right decisions.
 One of most formidable challenges is avoiding immoral managements and transitioning from an amoral to moral management
mode of leadership, behavior decision making, policies and practices. Moral managements require ethical leadership. It entails
more than just “not doing wrong”.
 Moral management requires that managers search out those vulnerable situations in which morality may reign of careful,
thoughtful reflection is not given by management. Moral managements require that managers understand, and be sensitive to,
all the stakeholders of the organization and their stakes.
 If the moral management model is to be achieved, managers need to integrate ethical wisdom with their managerial wisdom
and to take steps to create and sustain an ethical climate in their organizations. If this is done, the desirable goals of moral
management are achievable.