The Role and Importance of Business Ethics in Society

Business ownership entails having an unavoidable deal with people and all that concerns them. Businesses encounter problems more often and find it difficult to handle them. The challenges involved in operating a business include behavioral control with customers from both internal and external sectors, management of confidential information and ensuring that the business operation is in line with the requirements of the law and legislation.

Ethical principles forms the core rules when making the business decisions and not just a factor that can be left out. Ethics can be defined as the values that provide guidance when making decisions on choices and actions in our lives. Ethically people are required to accept loss without having to avoid it through cheating, lying or stealing. People who do not accept loss they go to whatever levels to avoid it hence finding themselves acting unethically. A business is always destroyed by acting unethically to cope with difficult situations.

The importance of business ethics has increased globally and every company has realized its significance in their success because it is the key determinant of the customer confidence to the company.  A great emphasis has been put across to encourage companies to enhance and improve their legal and ethical practices when carrying out their business. All companies whether private or public, small or big are being held responsible for every action they do. This is due to the demand by the society for high standard social responsibility from all businesses. The society should create a culture of ethical behaviors, norms and accountability which will be of great benefit to the whole society. Ethical values are beneficial to the society as ell as the business itself.

The benefits of good business ethics have been experienced by those companies whose managers use ethical values when making business decisions. Among those benefits is the goodwill that a business develops in the long run as a result of being perceived as transparent, trustworthy, reliable and straightforward. Goodwill is something that is earned from the external sector of the business through maintenance of ethical factors as the key principles in all business operations.

A business that conducts its operations in an ethical manner has a more probability of having high and consistent profits than that that operates in unethical values. A business that upholds ethics does not struggle to win and find customers in the market because their actions are evident and can be seen by the general public. The most commonly indicators used by the public is the quality and prices of the goods and services produced by the company. A company that is ethically right will always produce its products according to the required standards. This is opposite of the corrupt businesses which find ways that are unethical to cut costs so as to take advantage of the customers.

Ethical practices also assure the going concern of a business since a business that is profitable will always be expected to survive in the business for many years. Every investor would want the invested business to operate as long as possible. To achieve a long life span of the business then the business must be conducted in an ethical manner. The other key factor is the sustainability of the business.  Sustainability affects the earnings generated from the investments done on the business. Operating a business without ethical values will mean no sustainability in the business and investments. A business is also able to compete efficiently in the market through the use of ethical principles in its business operations. This is because the image, popularity and reputation of the business affect its competitive power. These factors are maintained and controlled by the ethical practices of the business.

Business ethics are codes or modes of acting set for professionals, to apply while they are conducting business. These ethics usually apply to both the mode of conducting business and the way the individuals conduct the business themselves. Business ethics are mostly used to control what government may not control. Take an example of profit making, most companies are out to make as much money as possible no matter whom gets hurt but, business ethics prevents and controls these actions. Business ethics also apply to foreign countries ethics must also be observed even in these countries.

The first ethical issue that must be observed in doing business abroad is that one has to obey the rules and the regulation of that foreign country. These laws range from those of making sure that the products that your business is going to sell or provide is not harmful to the people in that country. It is common for some superior countries to damp goods to third world countries while they pose these goods as legitimate. The goods may also be harmful to the consumer, and the company refuses to reveal this or bribes the authorities so as to continue selling the goods with the aim of making a profit. This is unethical, and the company should follow the rules of the country where they are doing business.

Another issue that arises with the law is making sure the business has complied with all the importation regulations that have been put in place in that country. The business must also observe tax laws in that country and make sure they pay their taxes promptly. Business in foreign lands may be tempted to hide the amounts of profit that they are making and may channel this profit back to their mother country. Such an act is unethical and should not be conducted.

Business must also observe the ethical issue of acknowledging that the foreign countries have different cultures from them, and they must respect these cultures. They are various cultures that exist in different countries, for example, if a company is to conduct business in a country where the Muslim religion is dominant, it must make sure that it respects the values and beliefs of this Muslims. It is unethical if the company was to expect its new workers to behave like those from their mother country, yet they are different.

Another ethical issue that is to be observed while doing business is the protection of information on the employees. Many countries prohibit sharing of personal information of employees across the border. This is only permitted if circumstances under which this information is been transferred is serious and the authorities in these countries has approved. It is, therefore, unethical for a business not to respect the privacy of employees’ private information simply because they are operating abroad.

A common issue with multinational companies in third world countries is their tendency to bribe government officials. Although this can also be done in their countries, they are rather punished severely and can easily be caught, in contrast to the third world countries. Most businesses results to bribing these officials to avoid the loss of money when they are establishing these businesses. The bribed government official in return is supposed to do what this multinational ask of him even if it is against the law.

Another ethical issue with multinational companies is their tendency to support poor governance and condone it simply because they want the favor of this government on their business. This occurred mostly in South Africa at the time of apartheid. Most multinationals that were operating in South Africa at the time could not condone the acts of the apartheid government even when they were doing barbaric acts. This is unethical for businesses because it portrays the lack of social responsibility toward the people of the country in which they are operating.

Exploiting third world countries is another ethical issue that is of concern. Most businesses when operating in the third world countries tends to exploit the people and the government in these countries. For example, multinationals in third world countries exploits their employees. In their country of origin, these companies give people benefits and better pay, but when they come into the third world they exploit their employees and resources in those countries while they would not do the same in their own countries. This exploitation of people and resources is unethical, and businesses should avoid these acts while doing business in foreign lands.

It is also unethical for businesses in foreign countries to conduct illegal boycotts or support illegal boycotts. For instance, if a multinational company is not happy with a policy that is made by the government of a certain country in which they are operating their business. They may decide to stage an illegal boycott to oppose the policy. This is unethical for a company to behave in such a manner and yet they do not behave the same way in their home country.

In conclusion, ethics and codes are put in place to avoid misconduct of people in business, also conducting dishonest business. These ethics range from those that deal with products and service those of different cultures to those of bribing government officials. All these ethics are well observed in the countries of origin but are a little bit twisted when these companies expand their businesses to foreign countries. The above issues of ethics must, therefore, be observed by multinationals or by businesspersons who venture into foreign countries.

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