Role of Ethics in Business

1. Role of Ethics in Business

2. It is classified as: • 1.Role of Business Ethics in Finance: It covers areas like fairness in trading practices, trading conditions, financial contracting, sales practices, consultancy services, tax payments, internal audit, external audit, and executive compensation. It ensures the transparency in financial transactions. • 2. Role of Business Ethics in sales and marketing: Ethics in marketing deals with the principles, values and/or ideals by which marketers ought to act. It covers transparency about products/services, about environmental risks, about product ingredients such as genetically modified organisms. • 3. Role of Business Ethics in HRM: It covers discrimination on the basis of age, gender, race, religion, disabilities, weight and attractiveness. Issue surrounding the representation of employees and the democratization of the workplace. Issues affecting privacy of the employee i.e., drug test, surveillance, whistle blowing. Issues related to the fairness of the employment contract i.e., slavery, indentured servitude, employment law. And issues related to optional safety and health.

3. 4. Role of Business Ethics in Production: It covers the duties of a company to ensure that products and production processes do not cause harm. i.e., Tobacco products, nuclear power, genetically modified food, mobile phones etc. • 5. Role of Business Ethics in Technology: It covers the effect of technology i.e., internet in issues like data mining, workplace monitoring and privacy invasion, medical technology has improved as well.

4. Factors Influencing Business Ethics: • 1. Value Forming Institutions: i.e., Family, religion, school and the government. These institution prescribe what is good or bad for an individual. • 2. Organizational Goals: Leadership, integrity, knowledge and skills, survival are some of them which change the goals of an organization and consequently expected behaviour from its members. • 3. Work and Career: Work refers to the job and the tasks or responsibilities associated with it. Career, on the other hand, represents a series of jobs or positions. Each work has its own values and persons performing the work follow these values. • 4. Superiors: Most people succumb to pressure from superiors in doing things that they may consider unethical otherwise. • 5. Peers and Colleagues: An individual adopts the attitudes, beliefs and values of the group to which he is associated. • 6. Professional Code: Big companies formulate their philosophy or creed to guide the behaviour of their employees. The main objective of these documents is to build the company’s image by showing the ethical concern of the organization. It contain a code to guide actions that have an ethical conduct. Ex.: CSI, ACAI, AIMA, IEEE, ICSI etc.

5. Managing Business Ethics: • Commitment from Top Management: It should be fully supported by the top management. Ethics committee should perform the following functions (Koontz & Weihrich): • 1. Holding regular meetings to discuss ethical issues. • 2. Dealing with grey areas. • 3. Communicating the codes to all members of the organization. • 4. Checking of the possible violations of the code. • 5. Enforcing the codes. • 6. Rewarding compliance and punishing violation. • 7. Reporting activities of the committee to the Board of Directors. • Code of Ethics: A set of code of ethics is desired for smooth functioning in organizational proceedings. • Communicating Ethics: • Ethics Training: • Ethics officer: • Response & Enforcement: • Audit, Revisions, & Refinements.