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Business Ethics

Mr. C.S. Sudheer | Posted On Friday, July 11,2008, 07:04 AM

Business Ethics



The character of a man is expressed in terms of his conduct or actions. These actions can be good or bad; right or wrong; moral or immoral. However they may be amoral as well which means that they are beyond the sphere of morality eg: a petrol bunk owner engaged in selling both petrol and diesel to the customers for a profit is an example of amoral conduct of business. But if the owner indulges in mixing petrol with kerosene and sells it to customers, then his act is said to be immoral. Thus right, wrong, moral and immoral are termed as moral judgments. Moral judgments require moral standards by which one judges human conduct. Ethics can thus be defined as the science of character of a person expressed as right or wrong conduct of action.


The intensity of consumer movements and the rising level of awareness among corporate stakeholders are making it difficult for corporate to get away with unethical business practices. Now stakeholders and consumers are no longer indifferent to unethical practices like financial irregularities, tax evasion, poor quality products and services, kick-backs, non-compliance with environmental issues, and hazardous working conditions. The Indian corporate have lately realized that integrity, transparency and open communications are the new norms of the corporate world. They also believe that the goodwill resulting from adopting a code of business ethics will in the long run, translate into economic gains in the form of stock market capitalization.


Survival is the name of any business game. If a company wants to survive it has to think about its profits. Most business operates on the principle that profit is not linked to ethical consideration. But there are instances which nullify the above principle. For example Johnson and Johnson often recognized as a company whose ethical behavior is exemplary.  The term profit in business is appropriate but only profit is not acceptable any more. Today every organization, whether big or small, has to justify its existence in the marketplace. It is felt that if company cannot generate profits, it has no rights to exist in the marketplace. A firm that is not performing well is considered as liability and burden to the society, as it cannot discharge its responsibility to the community welfare to its employees, revenue to shareholders and meet customer demands. Thus profit today is recognized as a characteristic of the success of a business and a justification for its existence.


A sick or loss making company is bound to misuse scarce resources. Such a loss making company makes huge liabilities; upsets the business, promotes inefficiency and finally cannot discharge its social responsibility. Considering this situation, it may be unethical for a firm to make loss. Such firms cannot exit in the marketplace as they force their employees into economic insecurity.

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