Ø Ai’sha
Wirastri Putri (20216425)
Ø Andri
Ramdani S (20216820)
Ø Fadli
Magdat (22216466)
Ø Why
is ethics important to business?
Ethics concern an
individual’s moral judgements about right and wrong. Decisions taken within an
organisation may be made by individuals or groups, but whoever makes them will
be influenced by the culture of the company. The decision to behave ethically
is a moral one; employees must decide what they think is the right course of
action. This may involve rejecting the route that would lead to the biggest
short-term profit.
Ethical behaviour and corporate social
responsibility can bring significant benefits to a business. For example, they
may:
·
Attract customers to the firm’s
products, which means boosting sales and profits
·
Make employees want to stay with the
business, reduce labour turnover and therefore increase productivity
·
Attract more employees wanting to work
for the business, reduce recruitment costs and enable the company to get the
most talented employees
·
Attract investors and keep the company’s
share price high, thereby protecting the business from takeover.
Knowing that the
company they deal with has stated their morals and made a promise to work in an
ethical and responsible manner allows investors’ peace of mind that their money
is being used in a way that arranges with their own moral standing. When
working for a company with strong business ethics, employees are comfortable in
the knowledge that they are not by their own action allowing unethical practices
to continue. Customers are at ease buying products or services from a
company they know to source their materials and labour in an ethical and
responsible way.
For example, a coffee
company which states all their raw beans are picked from sustainable plants
where no deforestation has occurred, by people paid a good living wage, in an
area where investments have been made to ensure that producing the coffee for a
foreign market has not damaged the local way of life, will find that all these
elements of their buying strategy becomes a selling point for their final
product.
A company which sets
out to work within its own ethical guidelines is also less at risk of being
fined for poor behaviour, and less likely to find themselves in breach of one
of a large number of laws concerning required behaviour.
Reputation is one of a company’s most important
assets, and one of the most difficult to rebuild should it be lost.
Maintaining the promises it has made is crucial to maintaining that
reputation.
Businesses not following any kind of ethical code or
carrying out their social responsibility leads to wider consequences. Unethical
behaviour may damage a firm’s reputation and make it less appealing to
stakeholders. This means that profits could fall as a result.
The natural world can
be affected by a lack of business ethics. For example, a business which does
not show care for where it disposes its waste products, or fails to take a
long-term view when buying up land for development, is damaging the world in
which every human being lives, and damaging the future prospects of all
companies.
Ethics is important to businesses for many reasons.
Businesses can increase sales or increase their reputation.
Business
ethics is an interesting branch of business theory, primarily because of the
fact that they are inherently interesting in a market economy. People tend to
be extremely distrustful of corporations in market economies and the bigger
they are, the worse that problem of trust usually gets. Business ethics
therefore are politically charged in many different circumstances and that in
turn serves to make them interesting. Aside from this academic interest
however, are also important for a company and its success. Here are some ways
in which this is true :
1.
Public
Image
It
is impossible to discuss business ethics as a branch of academia without taking
a look at the relationship between business ethics and public image. Each
corporation has a particular public image, which represents the way in which
the public views the corporation. Wal-Mart, for example, has a terrible public
image. Toyota, on the other hand, has a very positive one. These public images
are the result of a number of different things, but they are primarily the
result of the way in which a corporation acts with respect to the different
things around it.
A
corporation's environmental policy, the way they treat their employees and the
way they treat the communities they exist in are all part of their overall
behavior and this in turn is the principle factor in determining their public
image. As proof of this, you will notice that even though Wal-Mart makes
products that have a decent quality and an extremely low price, they still have
a negative public image.
Since
public image is largely a result of company behavior, business ethics play a
large role in determining public image since they determine behavior. And
public image is important to success in most cases, which is one of the reasons
as to why business ethics are important to a company's overall success.
2.
Investment
Another
reason that business ethics are important is the relationship they have to
investment. When a person or an entity is considering investment in a
particular stock, there are a number of things they take into account. Aside
from the quantitative factors surrounding a company's profit margin a future
prospects, consideration is also given to a particular company from the point
of view of the qualitative aspects such as their public image and the products
that they happen to sell. All of these things are taken into account before the
final investment is made.
Therefore,
a company that would like to encourage extra is a company that has a strong
sense of business ethics. Part of business ethics is responsibility to the
investor and for that reason companies with strong reputations in the field of
ethical business behavior are also companies that tend to attract more
investment from people that are new into the market. Investment is most definitely
important to success.
3.
Partnerships
In
the business world, joint ventures happen all the time. They happen all the
time because they are ultimately of great importance to the bottom lines of
businesses. A business can be made or broken on just one joint venture and part
of the reason that joint ventures are successful is that they combine the
forces of two extremely powerful companies on occasion.
If
you want your company to do well in joint ventures, then you need to have good
partners. The only way to get good partners is to have a good reputation both
in terms of a track record and in terms of your business overall. And of
course, the best way to get a good reputation is to ensure that your company
has a strong tradition of ethical business behavior.
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