Management Ethics

Understanding the Relationship between Business and Ethics

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"Understanding the Relationship between Business and Ethics"
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The relationship between business and ethics can be compared to marriage and morality. A good marital relationship has several essential moral ingredients: commitment of loyalty to each other by the partners, none of the spouse ever having any extra marital affairs, commitment to healthy upbringing of the children, taking care of parents and elders in the family, earning decent money by unquestionable means for running the family, maintaining a responsible relationship with the society and contributing albeit in a small way for its welfare.

Almost in similar lines, business and ethics have their connection. Any family running within the framework of above moral guidelines gets respect from the society. Likewise, a business run within ethical framework gets respect amidst its stakeholders.

Let us analyze the equivalents of some of the moral aspects of a marital bond that we listed above as applicable to business ethics and grasp their purport more.

== Commitment to Loyalty ==

Particularly if a business is run or partnership, the loyalty of business partners to each other is extremely important. It covers mutual trust and respect too.

In a public corporation, the commitment of the management to the shareholders, or the commitment of the business promoters to the rest of the share holders is very important. Within the organization, the commitment and trust of higher management towards the employees and the employee's loyalty and sincerity towards the management are to be well established through good communication and well articulated and understood codes of ethics.

== Absence of Unethical Extraneous Relationships ==

If top level executives at the helm of affairs in a business organization have underhand dealings and indulge in corrupt practices to siphon off the company's money and resources to fulfill their selfish needs, or to unduly favor their near and dear ones, the very ethical framework of the organization will get a jolt. Such practices can greatly mar the image and trustworthiness of the organization in the eyes of its stakeholders.

== Healthy Concern for Employee Welfare ==

Does the organization consider and treat its employees as human assets and not like commodities? Do the employees at different levels in the organization feel that they are treated like respectable individuals and not as herds of slaves? Just in case the business faces some acute hardship (like a recession) and employees are to be retrenched in large numbers, how decently and courteously is the unpleasant task carried out?

The answers to such questions will reveal the level of ethical business standards existing in the organization.

== Ethics Behind Profits ==

Any organization that tends to bulldoze the business scenario by corrupt practices may make huge profits and even become adorable to the stakeholders, but such practices will definitely mar the image of the organization in the long run. Other than corruption, other channels of unethical profit making will cover large scale exploitation of scarcity, stifling competition by means of unfair business practices, creating artificial scarcity to manipulate the prices, compromising on product quality and safety for the sake of maximizing the profits and so on.

== Social Responsibility ==

Engaging in the business to make profits by producing products that have harmful effects on consumers, by creating pollution and consequently causing potential health hazards to the society etc will be considered as poor business ethics from the point of view of accountability to the society.

Any organization making huge profits by cheating the exchequer by circumventing the tax laws will also be against ethics of social responsibility of the business. An organization paying taxes and duties promptly and justly as per laws is in fact contributing revenue to the Government and this revenue ultimately comes to the society by means of welfare measures and infrastructural development. An ethically sound organization may also contribute a portion of its profits by engaging in philanthropic activities for the welfare of the society.

It is quite likely that profits may appear to have an inverse relationship with business ethics. But ethically sound business can run smoothly like a well oiled machinery and is most likely to run longer and stronger when compared to immensely profitable competitors who lack ethical standards.


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