Question

Business Ethics

Please answer the statement below

Illustrate some of the ethical issues such as misuse of resources, abusive behavior lying, conflicts of interest, bribery, discrimination, privacy, fraud, etc. Try to explain how to justify these ethical issues and make the business into right directions.

Answer 1

Businesses aim to earn profits through selling products or services. In this process, they face multiple situations where they need to take responsible decisions considering all the stakeholders.

Key stakeholders for any business decision are - Business owners, shareholders, general public, government, business partners (customers, suppliers) etc.

The business decision lies in the hands of the management team of the organization but the decision can be influenced by the above stakeholders.

Below are the ethical responsibilities that businesses face generally based on their business and the environment that they operate in –

The role of stakeholder engagement

Businesses should always engage all the stakeholders for making a business decision.

For eg. To commission a manufacturing plant, the organization should consider various aspects like availability of funds (shareholders), availability of place to setup the plant (government), willingness of the local people to establish the plant (local public), impact on the environment etc.

Being a good corporate citizen and earning informal license to operate

Apart from earning profits, organization should be responsible for the impact it makes through its business. If it has a negative impact on a particular community, it should reconsider its strategy. Business needs to earn informal license to operate by earning the trust of the people to setup its operations.

Being open and transparent

Business needs to be open and transparent to its stakeholders. By doing so, it will create a trust and develop a long term relationship with its stakeholders which in turn helps it to make them accept its future decisions. Shareholders should be informed on the fund management, government should be aware of the followed norms, general public should be aware of the environmental and philanthropic activities of the firm, customers should be aware of the product quality aspects etc.