What is the importance of observing ethics in business?

Answer 1

Business Ethics is studied as a subject in Business related studies. It is one of the most vital subjects in Business and it is a must as in today's era it is very essential to get aware of the modern business rules and ethics to get success as a successful businessman.

According to the American Management Association, it is an important characteristic of effective leaders today. In a survey of 462 executives who were asked, "What characteristics are needed to be an effective leader today?" 56% ranked ethical behavior as an important characteristic, followed by sound judgment (51%) and being adaptable/flexible (47%).

This is an enough evidence to prove the importance of business ethics.

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Answer 2

Your organization's statement of ethics makes clear to organization members and those outside the organization the contents of the organization's value set. The results are standards for behavior, internal and external relationships, and quality of the organization's output.

Answer 3

Business ethics is a value system with the capability to provide an organization with the guideline within which the management can operate (Fernando, 2009).Ethics are performed through practices such as performing routine work and are not mere objects (Carter, 2007) Ethical practices in business world are important for all the organizations conducting business. It is a vital component of an effective business strategy. A strong stress on ensuring ethical practices in business organization results in positive inference for the firm, some of which may be summed up as below.

• While adopting ethical practices an organization ensures that it takes steps which are presumed correct by their customers, stakeholders, community as well as the society. Consequently, the strategic decision making within organization improves and positive images for the firm gets create develop.

• Nowadays more emphasis is being laid on developing the quality of core management in an organization. This is because it is their responsibility to manage, foresee, adapt, make decision, empower and cope with the changes in the environment. Also, top management executives face the dilemma of doing what is ethically right or what is required to achieve the desired objectives. However, the organizations that implement ethical practices experience effectiveness in their strategic leadership.

• It has been found out by many successful top management executives that exercising ethical practices in their business strategy enhances the clarity of the purpose and results in efficient business process (Ashoor and Mubarak, 2009). That is why for long term survival; inclusion of ethical practices in decision making is a mandate that is being followed by all the successful business leaders across the globe unanimously.

• Implementation of ethical practices not only portrays the image of an organization as an entity that makes decisions with good intentions, but it also provides numerous benefits for the organization's internal environment. With positive reputation employees will believe in their CEOs' good decisions and have faith in their organization, which will lead to employee loyalty.

• Further, loyal customer base will also be developed for the firm as customers will trust the organization and the products. This would further provide the organization with an edge over the competitors. Thus, observing ethical practices in a business organization has myriad advantages which are likely to be seen in reputed market position, sustaining success, satisfied and loyal customers, high performing workforce and also increased revenues and profits.

References:

• Fernando, A., 2009. Business Ethics: An Indian Perspective: Pearson Education India.
• Carter, C., 2007. Business ethics as practice: representation, reflexivity and performance : Edward Elgar Publishing
• Ashoor, Z., and Mubarak, B., Applying ethical practices to effectively lead the organization to the aimed success, 2009