need of ethics in business

Need of Ethics In Business

-Prepared By

Bhoomika D. Bhatt

• We need Ethics in Business due to Following Reasons:

1) For Every Individual Job is Centre Of Life:

Any Individual’s Life Revolves Around his Job

So Unless his values are in Hormony with his life he cannot Live a Healthy and Happy Life.

Need of Ethics In Business

2) Industrial Society:

Modern Society is Industrial Society. And it has much effect on Society…

Thus The Business Values Reflect the values and Ethics of the Society as a Whole…….

3) Ethical Behavior Adds Value:

Ethical Behaviour of the Employees and Organization Results into:– Trust from investors– Lower costs for audits, controls, investigations– Better allocation of resources– Customers will be more loyal – Lower costs from suppliers– Attracting and retaining better employees– Leads to better decision-making (do what’s best for firm, not

one individual)

4) Lowers Cost:

Unethical Behavior on part of Employees or Business Unit Lead to Following Costs:

1. Loss of physical assets2. Increased costs of security3. Loss of customers—especially those who value ethics4. Loss of employees—especially the more ethical5. Loss of reputation6. Increased legal costs7. Higher costs of debt8. Loss of investor confidence (lower stock price,

difficulty in raising funds, problems with lenders)9. Regulatory intrusion

5) Real Motivating Factors:

Ethics and Code of Conduct Followed in Business Raises or Boosts Employee Morale.

Increasing their Productivity and Honesty.

6)Manager as Trustee:

Today, a manager has to Work as a Trustee in Various Societal Groups.

So he must Follow the Ethical Rules of Society.

“Good Ethics Means

Good Business”