How Important For Companies Today To Be Ethical Management Essay

The beginning of the 21rst century started with big scandals that raised some issues on corporate social responsibility and on ethics policies inside companies. This essay says about the how important is it companies to be seen as ethical’s today? Yes because it will cause to a win-win situation for everybody concerned. If a company having and maintaining ethical standards will guarantee consumers and workers that they could belief the company. Meanwhile, Companies could be rest guaranteed that, with the belief of their stakeholders, their business will continue to develop. “Companies don’t have to be legally but they can do morally”

Public interest in business has never been higher than it has is currently. In considering the past thirty years of business ethics experiences, two conclusions may be drawn.

attention in business ethics has heightened during each past forty decades.

Interest in business ethics and corporate social responsibility seems to have been spurred by major headline grabbing scandals.( Sims 2003)

This essay traces the basic ideas of ethics and applied ethics fuscous on company ethics theoretical view, and the important of ethical behaviours, and steps for developing an effective code of ethics, business ethics in global economy And some more further information’s are contains in this essay.

Definition of Ethics

The theory has come to mean various things to various people, but generally in the context of organizations coming to know what it right or wrong in the workplace and doing what’s right – this is in observe to effects of products/services and in relationships with stakeholders such as employees, customers, suppliers, and local/national community. In times of fundamental change, values that were previously taken for granted are now strongly questioned. For example, life long employment is considered one of the best policies of organizations. However in the changed competitive situations we find that downsizing, delivering, outsourcing production systems raise questions about the fundamental premise of previously laid down good practices. Consequently, there is no clear moral compass to guide leaders through complex problems about what is right or wrong. Attention to ethics in the workplace sensitizes leaders and staff to how they should act. Perhaps most important, attention to ethics in the workplaces helps ensure that when leaders and managers are struggling in times of crises and confusion, they retain a strong moral compass.(web 1)

What is business ethics?

Business ethics focuses on what is right and wrong behaviour in the business word. It has to do with how businesses apply moral and ethical principles to situations that arise in the work place. Because business decision makers must often address more complex ethical issues in the work place than they face in their personal lives, business ethics is more complicated than personal ethics. (Roger 2009)

Why business ethics is necessary

During the early part of the 2000s, the United kingdom public was shocked as one business ethics scandal after another became headline news. Business ethics is necessary for companies, business ethical is vital not because it is fashionable though business can ill afford to ignore anything, however silly, which seriously influences the market in which it operates, rather business ethics is necessary because ethical choices are unavoidable. The business ethics challenge is to make that predictable ethical decision making explicit so as to make it better. Far from being anti business, business ethics actually provides essential support for maximising long term owner value (MALACHOWSKI A 1997)

Ethical behaviour report in UK.

According To IBE research in UK Sixty percent of people don’t trust business leaders to tell the truth. The public wants business to behave more fairly, ethically, and increasingly, a commitment to ethical practice is a standard for stakeholders. Having a code of ethics is a powerful tool, but only if it is rooted in the core values of the business.

According to MORI research in 2009 theyfound that 80% of the public believe that ‘large companies have a moral responsibility to society’but 61% also thought ‘large companies don’t really care’

Reflecting this, companies following a code of ethics were found, over five years, to have outperformed those who did not, according to IBE research in April 2003.

90% of FTSE 100 have a code- but only 43% of FTSE 250 businesses do

While 90% of FTSE 100 companies have a code of ethics or business conducts, only 43% of those in the FTSE 250 have codes. Quality varies from excellent to poor and having a code is no assurance that it will be followed. To be effective a code needs to be set in into a company.(web 2)

Why should a company Be Ethical?

There is already something odd about this question. It is like asking, “Why are bachelors unmarried?” They are unmarried by definition. If they were married, they would not be bachelors. It is the same with ethics. To say that one should do something is another way of saying it is ethical. If it is not ethical, then one should not do it. (web2)

An organization has to be ethical in its behaviour because it has to exist in the competitive world. We can find a number of reasons for being ethical in behaviour. Few of them given below: most people want to be ethical in their business dealings. Values give management credibility with its employees. Only perceived moral righteousness and social concern brings employment respect. Values help better decision making.

There are some reasons why business should seen as ethically

To protect its own interest

To protect the interest of the business community as a whole so that the public will have trust it

To keep its commitment to society to act ethically

To meet stakeholders expectations

To prevent harm to the general public

To build trust with key stakeholder groups

To protect there own reputations

To protect their own employees and create an environment in which workers can act in ways consistent their values

Besides, if a corporation reneges in its agreements and expected others to keep theirs,

What are the benefits form managing ethics?

Several advantages accrue to an enterprise if it is managed ethically. They are following

Attention to business ethics has substantially improved society: establishment of anti trust laws, unions, and other regulatory bodies has contributed to the development of society. There was a time when discriminations and abuse of employees were high, the fight equality and fairness in workplace ended up in establishing certain low which benefited the society

Ethical practice has contributed towards high productivity and strong team work: Organization being collection of individuals, the values reflected will be different from that of the organization. Constant check and dialogue will ensure that the value of the employee matches the values of the organisation. This will in turn result in better cooperation and increased productivity.

Changing situations requires ethical education: during unstable times, when confusion becomes the order of the day. One must have clear ethical guidelines to take right decisions. Ethical training will be of great help in those situations. Such training will enable managers manning corporations to anticipate situations and equip themselves face them directly.

Ethical practices create strong public image: organizations with strong ethical practices will possess a strong image along with the public. This image would lead to strong and continued loyalty of employees, consumers and general public. Conscious implementation of ethics in organizations becomes the cornerstone for the success and image of the organization. It is because of this ethical perception that the employees of TESCO and the general public protested in 1977 when the minister for industries attempted to nationalized the company in India.

Strong ethical practices act as an insurance: if a company have strong ethical practices of the organization are an added advantage for the future function of the business. In the long run, it would benefit if the organization is equipped to withstand the competition (Fernando 2009)

Steps for a company wishing to develop its own corporate ethics programme

1) Find a champion

The Chief executive officer – is organized to drive the introduction of a business ethics policy, the chances of it being a useful tool are not high.

2) Get support from the Chairman and the Board

Corporate values and ethics are matters of control. The board must be enthusiastic not only about having such a policy but also about receiving regular reports on its operation.

3) Find out what bothers people

basically supporting a standard code or copying that of another will not suffice. It is important to find out on what topics employees require guidance.

4) Pick a well-tested model

Use a agenda which addresses issues as they affect different constituents or shareholders of the company such ad shareholders, employees, customers, suppliers, and local/national community

5) Produce a company code of conduct

This should be distributed in booklet form, company internet, annual report. Guidance on how the code works should also be included.

6) Try it out first

The code needs piloting – perhaps with a sample of employees drawn from all levels and different locations. An external party such as the Institute of Business Ethics will comment on drafts.

7) Issue the code and make it known

Publish and send the code to all employees, suppliers and others. State publicly that the company has a code and carrying out programme that covers the whole company. Put it on your Web Site and send it to joint-venture and other partners.

8) Make it work

Practical examples of the code in action should be introduced into all company internal (and external) training programmes as well as induction courses. Managers should sign off on the code regularly and a review mechanism should be established. A code ‘master’ needs to be appointed.(web 3)

Conclusion

In this essay illustrates How important is it for companies today to be seen as ethical, in this competitive business world ethical behaviours are very important, because consumers education level and the ethical behaviour point of thoughts are high these days, and the media such as news papers, radios , television channels and the social networks(face book) all are highlight and focus companies un ethical behaviours. How ever now days people also like to deal with ethical companies. Consumers social and environmental view highly increased in the recent years, so companies should be seen like as ethical today.