Need and Importance of Business ethics


Business ethics seeks to prohibit certain conduct as a company, firm managers and employees should not be involved in. Ethics is a source of guidance beyond law enforcement. It is clear and uncontroversial to companies and their employees shall not engage in unlawful acts, such as selling harmful or defective products, and ignorance of the law can not be used as justification for the unlawful acts. Business and management ethics goes beyond the law see to provide guidance on what is acceptable behavior in business. Be based on values, however, it is often not clear what ethical behavior is and what it is not that different people may have different values.

For example, you should report to your supervisor affair between two of your co-workers? Some would say yes, but others would think it’s none of their business. What about selling a product abroad has proved harmful to health and is not allowed lo be sold in the United States? Or buy foreign products made with child labor? Or polluting abroad in a way that is not allowed at home? These issues are important for the company because, regardless of the moral candlestick, that they could have a serious impact on the bottom line if, for example, lead the angry consumers to boycott the company.

Today, most large companies established codes of ethical conduct for employees of the company and created an “ethics officers” or guardians of corporate integrity, the task of keeping their employees upright than the law requires. A company with such a code of conduct and ethics officer is more likely to hear of unethical behavior in the company before it becomes legal problems or before it leads to reaction of consumers, both of which can damage the image and performance of the company. There have been many such cases, such as when it became clear that Nestle (Swiss multinational and the largest food manufacturer in the world) pushed infant formula in many poor countries when the mother’s milk would be healthier for the baby, or when Nike was to be paid poverty wages many developing workers make high-priced sneakers her.

An important additional incentive for many companies establish rules of conduct for its employees and creating ethics officers was the creation of sentencing guidelines replaced the courts in 1991 as reduced fines for white-collar crimes committed by employees of companies which had established a comprehensive ethics applications. Such ethics programs try to indicate as clearly as possible the behavior of the company regards as unethical and employees are encouraged to avoid. This is a telephone company for personal use, taking office supplies home, lying about being sick is missing work, reporting the illegal behavior of other employees, give or accept gifts, and many others.

Since it is almost impossible to list all types of hypothetical behavior that companies would consider unethical and come up with a universally accepted code of ethics, by listing many such examples, providing some companies broad guidelines “do not do it if it does not feel right or if you want to be embarrassed to read about it in the local newspaper or hear about it on the local evening news. “Today, the professions, such as medicine, law, and accounting of professional ethics. Despite this, a number of spectacular financial frauds were exposed.

It would be better to change the structure or architecture of the company so that foster ethical behavior. This could be rewarding its CEO more with stock options that tie rewards to long-term profitability but with the salary relationship with current profits; require the founders of the company to hold a large position in shares of the company to ensure that their interests are in line with the new investors, rewarding employees for the production of both quality and quantity, and not just quantity; provide bonuses for the sales force to have satisfied customers and not just to maximize sales; and rewarding rather than punishing employees exposing illegal behavior by the company.

Many groups of consumers want companies to go further and have a social conscience and use some of its resources to remedy social ills, such as by helping the poor, promote education, funding crime-prevention programs, reducing general environmental pollution, funding of public projects, and so on. Some of these measures can directly benefit the bottom line of the company; By helping schools, for example, the company gets a better trained worker than another (thus saving on training costs it), or it may benefit indirectly by establishing a reputation for the company as a “good citizen” (so as to attract more customers and leads to more sales).


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