How Do You Define Ethics in Business? Essay Example

Our world has been changing at a rapid pace due to the forces of globalization and the role of businesses in the society has been expanding. Not only businesses are now engaged in dealing with local communities but they are increasingly expanding their operations to more areas, often outside national borders. As a result, businesses’ impact on the societies has been increasing. This also places greater responsibility on the businesses to follow higher ethical standards because their actions now impact increasingly large number of stakeholders. Ethics could be defined as behaviors that conform to accepted or expected behavioral rules or norms in the society and business ethics may be the minimum standards that various stakeholders expect businesses to adhere to. It is important to note that while compliance with law is important, ethics often go beyond mere legal obligations. In order to ensure high ethical standards, businesses should understand their responsibilities towards various stakeholders.

One stakeholders businesses serve are employees. One of the organization’s ethical responsibilities towards employees is making sure everyone has equal opportunity at promotion and everyone is paid according to the same standards irrespective of their racial, gender, and social background. Another ethical responsibility towards employees is to treat them fairly which includes making their participants in the profits of the business. Ethical businesses do not merely reward management and owners but also employees when a business does well.

Another stakeholder in an organization is management. Management controls the direction of the organization, thus, it is not only important for management to treat others fairly but also demonstrate commitment to higher ethical standards through personal examples. One example of ethical conduct may be to engage in fair business practices and avoid violation of rules and ethical standards, no matter how huge the financial incentive may be. This will send a strong message to the employees and help shape a business culture that truly endorses and rewards ethical conduct.

As far as customers are concerned, ethics require businesses to be truthful about the product and service and only introduce product or service after it has been extensively tested to be verified as safe. Businesses should also immediately recall products if there is a reasonable concern about harm to the customers and immediately provide communication and information access to the public.

As far as suppliers are concerned, a business should make sure that the suppliers follow business practices that are in compliance with all applicable laws as well as ethical such as safe working environment, fair wages to workers, and fair employment terms such as reasonable working hours. A business should also ensure that suppliers adopt sustainable business practices that involve minimizing the harm to the environment.

Regarding owners and shareholders, a business should ensure it follows the best interests of the owners and there is minimum conflict of interest between the management and the owners. A business should also be truthful in providing information such as annual reports to the interested parties. Accounting rules give considerable flexibility to businesses. Businesses should attempt to use accounting rules that provide the most realistic economic picture of the business rather than those that present the business in the best possible light and may have the potential to mislead.

Last not least, businesses are also accountable to the communities in which they operate. Businesses’ ethical responsibilities to communities include fair wages, minimum harm to the environment, and contributions to programs of social interest such as education and health.

It is clear that ethics goes beyond mere legal requirements and display higher standards when it comes to dealings with different stakeholders. Commitment to ethics show business as a good citizen and may also result in huge economic benefits because customers like dealing with companies who hold onto high ethical standards.