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Business Ethics

Introduction
The need for a company to behave ethically is
described in terms of a companys need to
interact productively with its stakeholders.

Business Ethics means conducting all


aspects of business and dealing with all
stakeholders in an ethical manner.

Business Ethics

Introduction

Ethics is the study of our relationships with others.

Companies do not operate in a vacuum but rather


are plunged in a universe of relationships with
multiple stakeholders.

With the globalization the scenario in which


companies operate has become even more complex,
given the emergence of global groups of
stakeholders.

Business Ethics

The quality of the individual is truly enhanced only when


the quality of life of the society in which he/she lives, is
improved.
Professional fulfillment for any institute is attainable only
when it accepts public accountability for its contribution
to social/national causes.
A business mission can be worthwhile and enduring only
if it is in line with national goals and priorities.

WHY IS ETHICS IMPORTANT?


l. Ethics corresponds to basic human needs. Man desires to be
ethical not only in his private life but also in his business affairs.

2. Most people want to be part of an organization which they


can respect and be proud of, because they perceive its purpose
and activities to be honest and beneficial to all society. These
basic ethical needs compel the organisation to be ethically
oriented.

3. Values give management credibility with employees. They


are a common language to bring leadership and its people
together

4. Organizational ethics, when perceived as genuine,


create common goals, values and languages.

5. Values help in better decision making, An ethical


attitude helps the management to take various aspects -.
economic, social, and ethical in decision making.

6. Ethics and profit go hand in hand. Cornpones driven


by ethical values are sure to be successful and profitable
in the long run.

7. Laws cannot protect society. This means where law


fails, ethics succeed.

CODE OF ETIHICS

Business must maintain the highest standards of behaviour


for the benefit of industry, employees ,customers,
shareholders and the society.

Goods and services must conform to the commitment


promised to customers.

Business must be truthful in stating claims

Customers must be given best possible service and treated


with respect and fairness.

Business must understand and respect the needs, concerns


and welfare of the community and society. It should use
knowledge and experience for upgrading the quality of
life.

All business endeavors must combine the qualities of


private excellence for public good.

Truthfulness and honesty in claims and representation and


no indiscriminate advertising of products which are
hazardous to society or individuals.

Globalization, Business Ethics &


Competitive Advantage

Globalization has brought about greater involvement


with ethical considerations and most importantly
achieving competitive advantage through business
ethics.
Globalization and business ethics are linked as they
affect a companys ability to commit to its
shareholders, in particular to external investors, and
preserve the trust needed for further investment and
growth.

Ethics of Scandal Versus


Ethics of Strategy

It is increasingly important for companies to deal with


ethics as a corporate strategy that, if uniquely
implemented, could achieve competitive advantage
for the company rather than waiting to react to possible
ethical issues of importance to the targeted
stakeholders.
It is the necessity of being ethically proactive
company rather than being ethically reactive company.

Business Ethics as
Competitive Advantage

As the speed of comparable tangible assets acquisition


accelerates and the pace of imitation quickens, firms
that want to sustain distinctive global competitive
advantages need to protect, exploit and enhance their
unique intangible assets, particularly integrity
(building firms of integrity is the hidden logic of
business ethics).

Business Ethics as
Competitive Advantage (Cont.)
behavior that is trusting, trustworthy, and cooperative, not
opportunistic, will give the firm a competitive advantage.
Sustainable global competitive advantage occurs when a
company implements a value-creating strategy which other
companies are unable to imitate.
For example, a company with superior business leadership
skills in enhancing integrity capacity increases its
reputation capital with multiple stakeholders and positions
itself for competitive advantage

Business Ethics as
Competitive Advantage (Cont.)

Business ethics as competitive advantage


involves effective building of relationships with a
companys stakeholders based on its integrity that
maintains such relationships.