Effect of Business Ethics on Business -Free-Samples for Students

Question: Discuss about the role of Ethics in Business, Benefits of being Ethical and how they affect Business Industry. Answer: Business Ethics: An Introduction Business ethics is also known as corporate ethics i.e. class of applied ethics that focuses on ethical principles and problems that generally arises in business environment. It is very imperative for the conducts of individuals and even for the conduct of entire organization. Organization of these ethics can be done by individuals, organizational statements and by the legal system. Simply, business ethics are organizational standards, norms or a set of value that define the action and behavior of an individual in a business organization. In past few years, customers have also started showing keen interest in ethical conducts of business and thats why business organizations are paying more attention on business ethics. For achieving strong position in long term, they have to consider business ethics. In fact retailer has to consider more on business ethics as compared to other businesses. The main motive is that retailers are the nearest to customers in supply chains. Now days custome rs are getting more aware not about the products but even about the ethics conducted by the organization. They dont even hesitate to react in case of unethical business practices (Ruiz-Palomino, Mart?nez-Canas Fontrodona, 2013). This report focuses on potential ethical issues in retail sector. The report also discuss about the role of ethics in business, benefits of being ethical and how they affect business industry. Challenges in business ethics Ethical issues facing retail sector Retailers in present time are trying to motivate the employees to behave ethically but sometimes, retail industry has to face some issues related to ethical practices. The issues can be related to sustainability, green practices, or ethical behavior etc. There are some ethical issues facing by retail sector, some of the ethical issues are described below- Green issue- Now days green issue is becoming a very popular topic as many organizations preferred to go green. It simply means less use of those activities which are harmful to the environment by the businesses. It means reducing the emission of CO2 gas, reducing wastage, reducing power usage and increasing the use of environment friendly power sources. Green products are generally expensive and thats why only 28% of the customers want to pay premiums for the green products. Environment related issues are the most popular issues in top retailers of the world. All the retailers accepted the environment as a key element of ethics related to a business. This highlights the importance of environment in business ethics (Arnold Valentin, 2013). Product safety- Since safety is the basic right of all consumers and it is also provided by the product safety acts that only safe products should be available to consumers in the market. Product safety means the level of risk available in using of product. Generally every product involves an accepted level of risk. It is the responsibility of everyone in the supply chain to provide safe products to its customers. Customers faith can be destroyed in case of selling of unsafe products. So it is very much Crucial to sell safe products to the customers. Ethical sourcing- This is the most crucial factor of business ethics. Government, trade unions and consumer groups are paying more attention on working conditions for those who are producing their products. Media campaigns also started highlighting the poor working conditions in factories and farms. Ethical sourcing is now become the corporate responsibility agenda for most of the retail organizations. Retailers are also implementing corporate norms or codes to properly ensure better working conditions to the laborers (Brunk, 2012). Sustainability focus of retail sector Now days, many industries used to take the principle of sustainability as one of their major challenges. As retail is a process of selling goods or services to its consumers and thats why they have to face major issues like carbon emissions, greenhouse gas emissions etc. the retailers have to check the products before offering it to sale so that they could not harm environment (Crane Mattey, 2007). They have to stock those products which can help in getting environmental goals like zero waste, reduce greenhouse gas emission etc. The company achieves these goals by proper training to its employees which involves two pronged strategy understanding of importance and creating awareness and then implementing the process. Well-planned corporate sustainability strategies help in minimizing the environmental and social risks and increase the profit of the business (Reisch, Eberle Lorek, 2013). Major stakeholders in retail sector The success of an organization depends upon the satisfaction level of the stakeholders. Stakeholders are those who are interested in the business activities and profit of the organization. Figure 1: Major Stakeholders The major stakeholders in the retail sector of any company are as follows: Customers- Customers are generally the stakeholder of the businesses. Now days customers are interested in low priced quality products and consumers attracted towards those retailers who offer low priced quality products. Since consumers are also the kingpin of market and thus retailers address the interests of consumers as stakeholders. Investors- Investors are generally interested in the profits of the industry because it will increase their earning per share. Investors also keep trying to lower the cost of the industry because it will increase their profit. Also, profit is the primary and most vital objective of any business as without profit there would be no business and thats why investors are the main stakeholders for any business. Employees- Since employees are the most Crucial resources of the organization. Generally, employees have two main interest in the organization i.e., job security and higher wages. Now days companies also make policies and norms for durable job securities of employees as without employees there would be no work in the organization. So employees are also the effective stakeholders for any organization (Hough, Green Plumle, 2016),. Suppliers- Suppliers are interested in high sale of their products with high profits. As not only high sales required, they also show keen interest to sell it in effective profitable way. So they always want to sell their products at high prices by the retailers but sometimes that may not be possible. So, suppliers are the least prioritized stakeholder of any retailer. Factors to manage business ethics Since ethics are related to values, conducts and behaviors so ethics programs are more process oriented than management practices. Ethics programs make deliverables i.e., strategies and actions, codes, budget substances, newsletters etc. The most significant feature from an ethics program management is the process that produces these deliverables. The most excellent ethical morals and behaviors are meaningless if they are not able to create fair and just behaviors in organization. So, strategies that generate ethical values, codes should also create actions and training that convert those values into suitable behaviors (Brunk, 2010). The best way for an organization to gain reputation is to demonstrate behavior. When the staff will aware of the ethics management, the more number of ethical issues can be identified. The best way to handle ethical problems is to avoid their emergence at first place. The process involved in developing ethical conducts will help the employees to follow that from the very beginning of stages (Burcea Croitoru, 2014). Importance of managing business ethics Business ethics has the key role in the growth and success of the organization in the operating market. There is significant importance of being ethical for any organization- Since every employee wants to be engaged with his or her job role in the business that is fair and right in strategies and actions. So being fair and honest is a basic human need. An organization which is fair in moral and ethical values has automatically able to generate goodwill in the market. Such organizations are respected in the society even they are of small scale. Ethics are the common line that brings employees and top management on a common platform and so organizations driven by values will always be united by employees (Biong, Nygaard Silkoset, 2010). Decision making is not only Crucial in life but also have much importance in any organization. Decision making driven by values not only help in success of any organization but also add to its goodwill for a long term. Figure 2: Ethics benefits Ethics also play a crucial role of securing the society. Ethics helps in implementing various laws which ultimately helps in safeguarding the society (Segon Booth, 2015). No business can function itself independently; it has to depend on other organizations for smooth functioning. The inter-relationship of the organization gets strengthened by adopting business ethics. Some social problems like strikes, lockout will not arise if the organization is following the business ethics as their will be fair and just relation between the employers and employees; customers and sellers. Conclusion In summary, this report discusses the importance of business ethics in retail sector. The report also highlights the fact that organizational profitability of any organization is improved by the use of ethical codes and conducts. From the above discussion, it is analyzed that there are some ethical issues which has to face by the retail industry. Further, it is analyzed that retail industry is focusing on the sustainability practices to get competitive advantage in the market. There are some factors that manage the ethics in the business. From the discussion, it is observed that ethics is Crucial in the decision making process in the business operations References Arnold, D. 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