Innovative Box: What is Business Ethics

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Ethics are a set of values and beliefs which influence how individuals, groups and society behave.

Business Ethics are concerned with how such values are beliefs operate in business.They help firms to decide what actions are right or wrong in certain circumstances.Ethics might influence the following business decisions.

• Should products which might damage the health of consumers be withdrawn from the market.

• What efforts, if any should be made to ensure that business activities do not damage the environment.

• Should money be spent on wheelchair access to workplaces and retail outlets.

• Should a firm reject a bribe given to secure an overseas contact.

• Should part time staff be offered the same employment rights as full time staff.

• Should a workplace creche be provided for working mothers.

• Should contribution be made to a local charity.

?A business that says''yes'' to some or all of these questions might be described as ethical. A firm which is ethical with regard to society as a whole the community within which it is based might also be described as 'socially responsibilities'.?

The Benefits Of Ethical Behavior:????????????

There are certain advantages for businesses in behaving in an ethical or socially responsible way.

Consumer's Views:

Increasing numbers of consumers are taking into account a firm's 'behavior' when buying products. As a result, ethical behavior can be good examples of this . A feature of Body Shop's marketing is that its products are not tested on animals.The company has also lent support to groups helping firms in the world's poorest countries. This stance has perhaps helped body shop become a successful business,there is a number of other firms which have responded in a similar way. The Co-operative bank, for example, has conducted a wide ranging campaign. It refuses to invest money in or finance a variety of concerns. These range from countries with poor human rights records to companies using exploitative factory farming methods. This policy was introduced as a result of a survey carried out amongst the bank's customers, which found that they regarded a clear ethical policy as important for the bank.

Improvements in the Recruitment and Retention of Staff:

Firms with an ethical approach believe that they will be more able to recruit well qualified and motivated staff. In addition , ethical firms argue that they are able to retain their staff better if they adopt a more caring approach to employees.

Improvements in Employee Motivation:

Firms which behave in an ethical manner believe that their employees are more committed to their success as a result. They may be prepared to work harder to allow the business to achieve its aims.

Should businesses be expected to act ethically

There is considerable debate about how businesses should actually behave.Some argue that businesses have a responsibility to act ethically. Those who hold this view stress the fact that firms do not operate in isolation. They are a part of society and have an impact upon the lives of those communities in which they operate. As such they should act in a responsible manner and consider the possible effects of any decisions they make. This means that profit making should not be the only criterion used when making decisions. Other factors which firms might consider included the effect of their decisions upon the environment , jobs, the local community, consumers, competitors, suppliers and employees.

Others argue that businesses should not be expected to act ethically. There are two main views in supporters of free market economics. They argue that the primary responsibility of businesses is to produce goods and services in the most efficient way, and make profit for shareholders.Firms should attempt to do this in any way they can, providing it is legal. Only by doing this will the general good of everyone be served.If firms are expected to act ' ethically'; then consumers may suffer because the ethical behavior could lead to inefficiency, higher costs and higher prices.?

A second argument is that in most cases it is naive to expect businesses to act ethically. Whenever there is a conflict between acting ethically and making greater profits, the vast majority of firms will choose the latter.Those firms which do act in an ethical manner only do so because it is profitable. This view is often held by those who favor government intervention to regulate business.They argue that it is necessary for the government to force firms to behave responsibly through a variety of laws which it must enforce.

Are Businesses becoming more ethical ?

It could be said that the late 1980s have seen a move towards a more ' caring' attitude by businesses. The growth of companies producing health care products which are not animal tested the use of recyclable carrier bags and sale of organically grown vegetables by many retailers could all be an indication of this.Some pension funds and a number of investment schemes are now termed ' green' They will only invest savers' money in companies which promote the environment.On explanation for the findings of the survey is that business culture continues to be driven by short term profit.This suggests that the stakeholders, such as shareholders and directors,hold most influence in setting the objectives of the business.These groups tend to be most interested in the profit of the business.

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