Ethical and Moral Decisions in Business Essay

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Ethical and Moral Decisions in Business

Ethics alone tend to be defined as a moral code of conduct that is perceived to be the right thing to do. An ethical decision means doing what is right, as apposed to assessing the most profitable course of action.

In the past, free market ideology was that corporations were kept responsible to customers, shareholders, workers and society by customer and investor behavior, seen in share price. Millions of individual “voters” in the market place ensured they behaved. “Bad” corporations were punished by selling. “Good” corporations were rewarded by buying. “Market forces will sort it all out”. This ideology weakened the idea of business ethics and
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Critics of ethical codes believe them purely to be public relations exercises rather than genuine attempts to change behaviour. It is argued that most businesses produce an ethical code to project a good public image whilst their underlying business culture remains unchanged.

Business leaders increasingly recognise the direct relationship between fulfilling a company’s ethical responsibilities and corporate survival. An effective business practices program ensures:

· A Marketplace Advantage: Customers and investors cite corporate practices and values as primary considerations in their decision-making.

· Superior Employee Performance: Companies with sound business practices and established values report improved employee morale, reduced employee turnover and increased productivity.

· Reputation Management: Once damaged by scandal or unethical behavior, a company’s reputation may never recover - resulting in lost revenue, low employee morale and increased governmental and public scrutiny. Emphasising responsible business conduct is the surest means of preserving a company’s intangible assets.

· Powerful Legal and Financial Incentives: International regulatory developments provide strong legal and financial incentives to corporations that establish standards of conduct and provide ethics education and training to employees.

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