By: Richard V.
Tugas
Divine Word
College of Laoag
Laoag City, Philippines
ABSTRACT
All businesses, small or big, must incorporate
ethics into its organization. It should
be the core center and lifeblood of every business for them to succeed in their
endeavors. It should be the common
ground of doing business. Having a
business is not just for profit alone but consider also for the social
responsibility of the business. How it
will affect the consuming public, the market, the economy, as well as the
environment? Ethics plays a major role in
doing business. Having good ethics means
building a stronger business that offers a lot of benefits not just to your
business but also to the community. It's
a trust-building tool with customers. Having a strong ethical core to your business can
directly affect the strength of your business as a whole and it's future.
Keywords:
Business ethics, business, ethics, ethical conduct
INTRODUCTION
Businesses can operate even without ethics
incorporated in their organization. They
may gain profit, as well. But the
question is how long they will exist/survive?
Long-term sustainability, it's a goal of every
business in the marketplace especially nowadays that we have a very competitive
business environment. How businesses strive
in such an environment if they don’t have ethics, good moral character, good
intention, social responsibility? For a
business to exist the people involved in the business must have some sort of
minimal standards of ethics. A business would fail if all members think that it
is normal and acceptable to steal, lie, and break agreements. Besides, a
business also needs a stable society in which it carries out its business. The
stability of a business depends on some standards of ethics.
So,
a business cannot survive without some standards of ethics. Therefore, it is in
the best interests of businesses to promote ethical behavior among their
members and society. It can also be said that good ethics is good business.
The paper will reiterate the importance of ethics in all businesses. Business ethics is about how a company incorporates ethics into its operations. The argument is that, will a business survive even if it disregards ethics?
BUSINESS
VS. ETHICS VS. BUSINESS ETHICS
Business is defined
as an organization or enterprising entity engaged in commercial, industrial, or
professional activities, it's referring to the organized efforts and activities
of individuals to produce and sell goods and services for profit (Hayes, 2020).
Businesses
can range from small operations operating in one industry to large operations
operating in many industries around the world.
Ethics, on the other hand, is a code of
conduct that covers the whole human lives and his surroundings which include
the relationship of man and his /her fellow man, his society, other sentient
beings, and his natural environment (Abun & Magallanes 2018). Ethics helps
us to classify, what is good, and what is bad? It involves learning what is
right or wrong and then doing the right thing. There's always the right thing
to do based on moral principle, and others believe the right thing to do
depends on the situation, ultimately, it’s up to the individual. It tells us to do good things and avoid bad
things. So, if we want a successful business
venture, then we are to do business and applying ethics at the same time.
Ethics involves people from
different walks of life agreeing
on some basic principles of how to conduct themselves. Since business transactions involve
businesses with employees and owners who come from different backgrounds
interacting with each other regularly, business ethics provide a common ground
everyone can agree upon. Take for
example the meat business. Buyers of
livestock who came from different provinces will adhere to the same standard,
which is establishing a suggested retail price (SRP) of livestock. In that case, sellers will sell their
livestock fairly.
Business Ethics means various
things to various people but the main point is knowing what is good and bad in
the workplace. However, it’s not enough
to just know what’s good and bad but also doing what is good with regards to
the products/services you are offering to the market and also to your
workforce/employees. Customers like to
be associated with companies with a positive image; this includes a reputation
for good ethical trading. In doing so,
you need to (1) treat your employees well, give them the wage due them, show
them equal respect, motivate them to be productive; (2) be honest to your
customers by giving them quality goods/services, to your suppliers by paying
them on time, to your employees by giving them all their benefits, to the
government by paying the right taxes; (3)know your social responsibility, don’t
harm the environment by polluting it or by abusing its resources, practice
recycle-reduce-reuse if necessary.
By definition, business ethics are the moral principles that act as guidelines for the way a business conducts itself and its transactions. In many ways, the same guidelines that individuals use to conduct themselves acceptably – in personal and professional settings – apply to businesses as well (Corporate Finance Institute, ND). It keeps the business working within the boundaries of the law, ensuring that they aren't committing crimes against their employees, customers, consumers, or other parties. Business ethics can be a marketing tool, customers are likely to choose one who practices well in their operations over a company who just after the profit.
APPLICATION
OF BUSINESS ETHICS
Ethically doing it means
you are doing it right. Ethical business
practice means doing what is right in your business operations. For example, giving proper safety gear for
your employees on the construction site.
This is very rampant in our country, where companies ignore safety
gear. Depriving them using such gears as
a helmet will put workers in danger. If
a hard object falls into one of your workers’ heads, he may suffer injury.
Determining what’s ethical
or not is sometimes difficult. For
example, assuming your company needs a supplier of its annual supplies of
personal protective equipment (PPE). Supplier
X offers the same price as Supplier Y, but the former gave you an "under
the table" 10% commission of the total price of the contract. Eventually, you chose the supplier that gave
you a commission. Technically, the
transaction is not illegal. However,
there was bribery happened. And it gave
Supplier X due advantage because of the "commission" offered to you.
Now that we are in a war
with this pandemic, the battle against Corona Virus Disease (COVID-19), new
normal is being observed. Minors below
21 years old and senior citizens above 60 years old are not allowed to go out
of their homes. During the onslaught of
the COVID-19, lockdowns were being implemented.
The government together with its health experts warned the citizens to
cooperate and begged to “flattened the curve”, to help each other curb the
virus, a responsibility all we share, enumerating the behaviors to achieve that
goal. Without
specific guidance on what ethical conduct is and why people will decide things
like the ethics of ordering their food.
People are aware that delivery boys may be a carrier of the virus, so
they opted to cook for their food. To
avoid crowded places like in public utility jeeps/buses. To not going out if not necessary. The ethical behavior at this moment is to
just stay home. The mandatory use of face mask and face shield,
social distancing, and other health protocols.
There's now the ethical behavior being practiced with this public health
crisis. We observed that the prices of
this Personal Protective Equipment (PPE) skyrocketed. Demand is very high,
while demand is low, as a result, price increases. As a manufacturer/dealer of PPEs, you may
increase the price. It is reasonable
because of the market needs. But is it ethical/moral to double the price even though
your supplies are from your old stock?
It’s your social responsibility to help stop the spread of the virus,
hence selling your PPEs at a low price will help not just your customers but
the government as well.
Encourage Business Ethical Conduct
Conducting
yourself ethically as a small-business owner and encouraging your employees to
engage in ethical business conduct brings about several benefits for your
company. Similarly, unethical conduct can hurt your business financially and
tarnish its image, leading to diminished future opportunities for your company
(Symes,n.d). If your employees feel that
they are treated well, they are less likely to do unethical in your
business. They will take good care of
your equipment because they will treat it as theirs. After all, you treated
them as family/friends. When your
business engages in a behavior that is either ethical or unethical, the
consuming public or customers will notice it.
If your company acts in ways the public considers ethical, your company
enjoys an increase in public trust.
Building a positive image in the public unlocks opportunities and avoid unnecessary
negative feedback about your operations.
Practicing ethical conduct in your business will help your business to
build customer loyalty, attract and retain talented employees, and avoid legal
problems. Customer loyalty means they
will choose to patronage your products/services over your competitors’
products/services. Having a loyal
customer base is one of the keys to long-range business success. This will generate an additional sale and
eventually income. Also, treating your
employees well and giving benefits due them will choose to stay and help you
succeed in the operation of your business. Talented individuals want to be
compensated fairly for their work and dedication. They want career advancement
within the organization to be based on the quality of the work they do and not
on favoritism. They want to be part of a company whose management team tells
them the truth about what is going on. On
the other hand, if you disregard practicing good moral ethics in your business
then you may be facing a possible devastating
lawsuit, negative publicity, wasted time, loss of money, and low employee morale. At times, you may be tempted to cut corners in pursuit of
profit, such as by not fully complying with environmental regulations or labor
laws, ignoring worker safety hazards, or using substandard materials in your
products. The penalties for being caught can be severe, including legal fees
and fines or sanctions by governmental agencies. The resulting negative
publicity can cause long-range damage to the company’s reputation that is even
more costly than legal fees or fines. This
may result in bankruptcy.
1. Hayes, A. (2020). Business definition. Retrieved from https://www.investopedia.com/terms/b/business.asp
2. Abun, D. & Magallanez, T. (2018). Universal Business
Ethics: A Challenge to Multinational Companies.
3. Corporate Finance Institute (n.d). Retrieved from
https://corporatefinanceinstitute.com/resources/knowledge/other/business-ethics/
4. Symes, S. (n.d).
Importance of Ethical Conduct in Business. Retrieved from https://smallbusiness.chron.com/importance-ethical-conduct-business-25163.html
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