Business has long been the subject of intrigue when issues such as ethical conduct gets into the transaction processes. A number of observers maintain the idea that ethical business conduct, although may boost the prestige and regard for the company, may in fact reduce its profitability owing to the additional cost of ethical practices. Arguably, business is primarily for profit and generating revenues especially at a time when competition appear to be threatening the ability to maximize profits, may indeed impact the conduct of business operations and put certain aspects under a cloud of ethical doubt.
The risk of ethical breach become palpable as the need for immediate profits put pressure on managers. (Blanchard & Peale, 1988) However, a number of adherents to ethical business conduct believe that the consistent practice of ethics as forming part of the core corporate values while may necessarily result to increased expenditures; may in fact add value to the corporate image that may, in the long run, increase patronage and consequently profits to the enterprise.
Here, there is a theoretical presumption that ethical business conduct may have an enhancement effect on the profitability of businesses. Whether the profit edge may become significant or not may not be the issue – but the premium provided by customers over firms with evident ethical business conduct can be tapped to sustain profitability hence ensuring business continuity. (Donaldson, Werhane & Cording, 2002)
This paper discusses the concept and practice of “ethical business conduct”; the arguments for and against promoting ethical business conduct; the mechanisms, strategies or techniques and illustrative examples for defining and promoting ethical business conduct. A synthesis of the arguments for and against the opinion that promoting ethical business conduct contributes to the positive regard and profitability of the entity are equally discussed. Ethics and the Profit Motive Moral philosophers, professional practitioners and case analysts may have their reasons for strongly advocating the practice of ethics and ethical conduct.
The deontological and consequential theories of ethics may likewise differ in their conceptualization of ethical practices; but whether ethical business conduct is regarded as the moral duty to manifest the common good or that ethics be understood and practiced based on the man’s ultimate objective of goodness in the act may already be moot and academic. The thing is, both results in higher forms of regard and respect for the company that may subsequently translate into real sustainability of patronage.
A number of surveys point out that certain dimensions of business generate some form of admiration for entities that manifest ethical and good governance practices. Awards such as best employers are known to imply ethical business conduct, fair wages given to labor, good working conditions, transparency and openness, learning and growth for the human capital, product quality and assurances and firm compliance of warranties, environmental concerns such as waste management and practices along corporate social responsibilities.
These are just some of the acts that presume the presence and practice of ethics on the part of management. Ethical business conduct may further comprise proactive acts of management and employees that are seen by the public as complying with professional standards and practices that elicit respect from the public. For instance, faithfully complying with government regulatory laws such as taxes, permits, product labeling, respect for intellectual property rights, faithful compliance with laws protecting the marginalized sectors. Business Ethics: Mechanisms, Strategies and Techniques
The practice of business ethics is a sensitive act which compels the observers to match one’s ‘walk’ with his ‘talk’. Here, personal values of management and employees are keenly observed by the public and are evaluated whether ethical conduct transcend beyond the doors of the firm and continuously are manifested in the personal lives of the corporate human capital. Promoting ethical business conduct starts from the top management. The kind of corporate environment that is developed from the top may help ensure that there is high regard for ethical values in the company.
In addition, management mandates that ethical character are manifested in corporate systems, processes, manuals or operations as well as every communication process within and outside of the company. Hence, transacting business with anyone in the company becomes a pleasant ethical experience for the clients and the various stakeholders — commencing from phone calls, personal transactions, confidentiality, respect for privacy, complaints grievance system, delivery of warranty.
Thus, while there is no firm assurance or direct empirical evidence that ethics will enhance the firm’s profitability; at the minimum, ethical business conduct is sure to sustain patronage of clients with pleasant experiences and encounters with company personnel. Here, the theoretical principle of good service, ethical communication, survey and experts observe, have high correlation with patronage and, consequently, profitability. (Kaplan & Norton, 2003) (Jaksa & Pritchard, 1993) Conclusion
Respect and regard for any company as well as the perennially-sought profitability are no means accidental to any company enjoying both. Regard and profitability are hard-earned phenomena for firms which have worked hard to gain the respect of a patronizing community. Here, ethics may initially imply and result to a risk of cost increments resulting to reduction of profit. However, the emerging temperaments of competition not only at the local but also at the global levels are ethics-averse for many businessmen.
a number of them will aim to gain regard and profits through short-cuts such as false advertising claims, shortchanging and non-compliance with warranties, piracy and violations of intellectual property rights or patents. Thus, aiming for the elusive shareholder value would often demand the best as well as the worst in the characters of businessmen. Although many believe that shortcuts to profit abound, the discovery of some form of ethical breaches in the conduct of business are more fatal to business sustainability than providing simple respect for other’s rights to earn a living. (Shaw, 2003)
Works cited Blanchard, Kenneth and Peale, Norman Vincent. The Power of Ethical Management Blanchard Family Partnership. William Morrow and Co. , New Jersey, 1988. Print. Donaldson, Thomas, Werhane, Patricia H. and Cording, Margaret. Ethical Issues in Business. A Philosophical Approach. Upper Saddle River, New Jersey, Prentice Hall. 2002. Print. Jaksa, James A. and Pritchard Michael S. Communication Ethics: Methods and Analysis. International Thomson Publishing, Wadsworth, Belmont, Ca. 1993. Print. Shaw, John C. Corporate Governance and Risk. A Systems Approach. John Wiley and Sons, 2003 New Jersey. Print.