Question

why adhering to the professional ethical standards/codes is challenging for businesses when making short-term and/or long-term decisions, and what benefits do businesses derive for strictly adhering to the professional ethical standards/codes? Explain your answer with an example

Answer 1

Solution

i)Business ethics are a set of moral guidelines that influence how a company serves its customers and treats its employees. Every industry and individual business has its own ethical conduct that affects its organizational procedures and systems.

ii)Ethical conduct in business provides benefits for both business owners and consumers

• Building trust between companies and consumers. Ethics in business help build positive and trusting relationships between companies and consumers. When companies demonstrate ethical behavior on a consistent basis, consumers feel more comfortable choosing that company over others.
• Appealing to shareholders. Ethical businesses may also receive more financial support from shareholders because investors likely want to work with morally sound and legally abiding companies.
• Having a Code of Ethics Provides a Moral Compass During Tough Times
  By having a code of ethics, it provides you a tool to make consistent decisions about what is right and wrong. This is especially helpful when making decisions in times of conflict.

iii) The following are the ethical issues faced by a business enterprise.

a) Harassment and Discrimination in the Workplace

  Harassment and discrimination are arguably the largest ethical issues that impact business owners today. Few  measures that can be taken by the organisation to prevent the same are as follows :-   

• Equal Pay: compensation for equal work regardless of sex, race, religion, etc.
• Religion: accommodations and equal treatment provided within reason regardless of employee religion.
• Sex and Gender: employee treatment consistent regardless of sex or gender identity.

b) Whistleblowing

Whistleblowing - the public exposure of organizational wrongdoing .The ethics of whistleblowing can only be understood in relation to its moral purpose, whether that is to achieve a good outcome or fulfil a duty. Sometimes whistleblowing is internal to an organization and is meant to expose the practices of an organization to CEOs and managers. It could also be external, where a whistleblower exposes an entity’s illegal practices to the media, the police, or the government. This is also one of the major ethical issue faced by an organisation.Steps must be taken against such whisteblowers who try to cause harm to the entity.

c) Nondisclosure and Corporate Espionage

Many employers are at risk of current and former employees stealing information, including client data used by organizations in direct competition with the company.  Companies may put in place mandatory non-disclosure agreements, stipulating strict financial penalties in case of violation, in order to discourage these types of ethics violations.

Conclusion

i)In my personal view, Ethical issues on business can be avoided.Avoiding ethical issues in business always starts with top management.

ii)Providing clearly written policies and processes that ensure those policies are both acknowledged and adhered to, can ensure transparency and ethical business practices are applied.

iii) For the effective application of ethical standards/codes,be sure to communicate and enforce a robust code of ethics when making decisions and ask the same of your employees. Remain aware of the discrimination laws that exist in your region. Stay informed on the rules that impact your industry, Collaborate with accountants, maintaining transparency and honesty in your financial reports. Be present in your company, making sure your organization and employees alike are always doing the right and ethical thing.