BUSINESS ETHICS AND BUSINESS VALUES

Values and ethics in simple words mean principle or code of

conduct that govern transactions; in this case business
transaction. These ethics are meant to analyse

problems that come up in day to day course of

business operations. Apart from this it also applies to
individuals who work in organisations, their conduct
and to the organisations as a whole.
We live in an era of cut throat competition and
competition breeds enmity. This enmity reflects in
business operations, code of conduct. Business
houses with deeper pockets crush small operators
and markets are monopolised. In such a scenario
certain standards are required to govern how
organizations go about their business operations,
these standards are called ethics.
Business ethics is a wider term that includes many other
sub ethics that are relevant to the respective field. For

example there is marketing ethics for marketing,

ethics in HR for Human Resource Department and
the like. Business ethics in itself is a part of applied
ethics; the latter takes care of ethical questions in
the technical, social, legal and business ethics.
Nowadays business ethics determines the fundamental
purpose of existence of a company in many organisations.

There is an ensuing battle between various groups,

for example between those who consider profit or
shareholder wealth maximisation as the main aim of

the company and those who consider value creation

as main purpose of the organisation.
The former argue that if an organisations main
objective is to increase the shareholders wealth,
then considering the rights or interests of any other
group is unethical. The latter, similarly argue that
profit maximisation cannot be at the expense of the
environment and other groups in the society that
contribute to the well-being of the business.

Ethical Decisions That Impact Any Business

1. Ethical Advertising Decisions
Most businesses, at one time or another will need to
advertise their products or services so they can increase
their customer base. It is important they do this in an
ethical manner. Ethical advertising is considered honest
when it truthfully portrays what is being sold. Unethical
advertising is deceitful or misleading and can even be
considered negative. Advertising that's considered
negative often degrades a competitor's product so the
business can make its product look better.
2. Ethical

Policies on Confidentiality

Almost all codes of ethics used by businesses involve at

least some guarantee of confidentiality. Customers want to
know that their private information will not be used in ways
in which they do not approve. Employees want to know
their personal files won't be accessible by anyone other
than authorized personnel. When businesses fail to disclose
their intended business practices, such as selling

customers' information to third parties, it's considered

unethical behaviour.

3. Ethical Sales Practices

How a company decides to conduct sales is a major ethical

decision that affects all industries. Ethical sales involve
honesty and integrity. For example, a company that
honestly discloses both the advantages and disadvantages
of their products or services, and stands behind them 100
per cent is considered to have ethical practices. On the
other hand, a company that baits customers by offering a
good deal, then tries to entice them to purchase more
expensive merchandise through deceitful means is
considered to have unethical business practices.

4. Ethical Pricing Strategies

While all businesses generally have the final say in what
they choose to charge consumers for products and
services, ethical limitations do exist. For example, it would
be considered ethical for a business to raise its prices as a
result of increased costs associated with manufacturing. It
would be considered unethical for a business to raise prices
in an effort to gouge certain customers they know are in a
predicament that requires them to pay whatever is being
asked.

Profit Maximisation vs. Social Responsibility of

Business.
Most of the research points out that it are hard to
define profit maximization because short term and long
term maximum paths might differ. The concept of risk
and return is also relevant with higher return often
decreasing the chances of surviving. The duty of a
company and its directors to its shareholders, and their
incentive to do better for themselves and their
shareholders by increasing earnings also plays a part.

The concept of dead weight cost is also relevant which

is minimized when marginal cost equals marginal
revenue and the pricing is such that the demand curve
intersects the supply curve at the profit maximizing
price.
Nowadays, many large multinational corporations
which occupy increasing shares in the market and high
statues in the society are usually powerful in having
both positive and negative effects on the public. As a
consequence, the concept of Corporate Social
Responsibilities draws much more public attention.
Social responsibility goes beyond profit making and
social obligation. CSR is a business intention focusing
on minimizing the harmful effects and maximizing the
benefit for the society. A company should be
responsible for its social, environmental as well as
financial performances, which is also known as profit,
people and planet approach. This concept encourages
a company to take both the contributions and impacts
they make to the social and environmental into account
when measuring their corporate performance. Some
corporations have started to look for a strategy which
seeks to maximize both financial return and social
good. However, some others state that corporate social
responsibility contract the economic performance of
one company. The relationship between corporate
social responsibility and the goal of profit maximization
of one company will be critically appraised.