Business Ethics

Thesis

Ethics are the rules or moral principles that individuals or group of individuals agree on and use as aspiration goals (Corey, Corey, & Callanan, 2003). Businesses that enforce and abide clear ethical standards or ethical code of conduct create ethical working environment. Business’s ethical working environment creates better reputation that brings more trust and profit from clients and dedication from employees. Companies that operate unethically often are not successful in a long run, they gain negative reputation and distrust from the customers.

Introduction

“Business ethics is a form of applied ethics that examines ethical rules and principles within a commercial context, the various moral or ethical problems that can arise in a business setting and any special duties or obligations that apply to persons who are engaged in commerce” (http://en.wikipedia.org/wiki/Business_ethics ). Business world or the world of commerce is a competitive world. Just like in sports, competition must have ethical rules that guide businesses.

Businesses are created by people for people and operated by people. Products and services that are produced by the organizations are for the customers. People are involved in all aspects of business world. Human factor must be counted when it comes to business world. This is where business ethics plays a crucial role. For example, telling the truth about the product or the deadline is an ethical dilemma in many businesses. Ethics in Business world help create structures that are inviting for all members of the equation and encourage them to think globally about the future. It generates trust between all the members, grows good reputation, and strengthens interest in each other. This in turn makes the business stronger and more productive.

Business ethics and employees

Ethical environment at a business setting attracts better employees, supports “good will” of the employees which in turn raises the value of the business, promotes growth and development (Costa, 2006). Employees in such environment are more creative and willing to make a difference to benefit the company. Vershoor (2006) explained, "According to the LRN study, 94% of employees said it is either critical or important that the company they work for is ethical. Eighty two percent said that they would rather be paid less but work at a company that had ethical business practices than receive higher pay at a company with questionable ethics" (p. 21). It is clear that ethics in business are important not only to the clients or customers but also to the employees of the companies.

Business ethics and customers

Ethical business performance attracts more customers. Customers would rather stay loyal to an ethical kind of organization, than to an organization that does not implement ethical practices. It is because the customers know what to expect in return for what they pay. Customers would rather stay with a business they can trust than a business with unreliable reputation. Ethical approach pays off in a long term run with acquiring loyal customers. For example, Welsch (2006), a business owner and an author of the article in the Air Conditioning Heating & Refrigeration News, explained that when service technician acts in the best interests of a customer, telling the truth and not overcharging for simple problem such as a turning “on” the switch of a thermostat, it develops a good trusting reputation that brings more customers. Such clients are not afraid to refer their friends, neighbors, and families to use this company's services. Welsch (2006) wrote: "I can tell you we have sold many systems to customers because we told them the thermostat was in the “off” position (or something similar), and when they really needed a system they remembered how we had treated them in a situation when a service technician acts in the best interests telling the truth about turned off thermostat instead of acting busy to run up a larger charge" (p.50).

Unethical example

A friend of this writer works in an Information Technology (IT) department as a computer programmer, where it seems like the management focuses its attention only on accomplishing some ridiculous deadlines than quality of the product (Personal communication, 2006). The management promises to the clients to deliver the product in an unrealistic timeframe. By doing this, management creates a situation where employees are not satisfied with the working environment and customers are not satisfied with the products. The applications that are done quickly, often have a lot of problems. Therefore, frustrated clients have to come back again and again to fix the problems and make applications