The Importance of Ethics in Business

Why Ethics in Business is Important?

Running a business is a very responsible and serious activity that requires much attention to details, decisiveness and creativity. However, there is one more factor that influences success in business – business ethics. People who are involved in a business should realize that the way they perform their activity and do their business reflects in the final outcome. To be more precise, each step made and each decision taken influence how successful a business will be.

People should understand what is wrong and what is right in running a business. In addition, they should realize that making a business is not only about money. Businessmen must know that business is such an activity that should not do harm to people, but should provide qualitative and useful service and products. Indeed, this is the only way to make money fairly and have loyal customers and clients. Moreover, it will give the company or organization reputation of a good and fair firm.

Nevertheless, one should remember that business ethics is good not only for the owner of a business and clients, but also for the employees. Indeed, there is a strong need to treat employees properly, so that they loved their job and had desire to work better (Stanwick & Stanwick, 2014). Moreover, it is necessary to teach the employees business ethics as well. No doubt, it will bring positive result since there will be much fewer issues of conflicts in the workplace.

As one can see, studying ethics in business is a very important factor, because many aspects depend on it. Running a business, according to the code of ethics, means friendly atmosphere in the workplace, more loyal clients, better reputation of an organization, and, of course, clean conscience of a business owner (Stanwick & Stanwick, 2014). Thus, it is highly recommended to follow the code of ethics.

The foundation of business ethics and theory was performed in several steps. First, there were conducted ethical examinations, such as descriptive, analytical and normative. As it is known, business ethics and theory are based on ethical frameworks. Therefore, one can state that it was the foundation of business ethics.

Ethical Frameworks Needed in Decision Making

Decision making is a complex process that requires certain skills and ability to think and make decisions quickly. In fact, making a decision is a very serious task since it may influence many aspects of a business. One should remember that every step taken and every decision made lead to certain results. Therefore, each decision must be thought over well and must base on certain ethical frameworks.

The ethical frameworks that are needed for a decision making process are the consequences framework and the duty framework. The name of the consequences framework says for itself. It is oriented on future possible consequences of the decision made (Stanwick & Stanwick, 2014). In addition, this framework suggests considering people who can be affected by the decision. Indeed, it is extremely important to consider possible outcomes of the decision before making it. Both good and bad results should be considered. Using the consequences framework will lead to better results and, perhaps, to the general good. At least, this framework is intended to make general good.

The next ethical framework that is helpful in decision making is the duty framework. This framework is based on the principle that an individual should act in accordance with his or her duties (Trevino & Nelson, 2011). To some extent, this framework is rather useful, because it gives an individual the opportunity to think if he or she must act in that or another way, if it is really his/her responsibility to make such a decision. However, one should remember that some situations may require redefining limits, showing creative thinking and ability to change something in one's approach in order to achieve the desired result.

Though both frameworks are rather good for a decision making process, the consequences framework best aligns to the eight ethical principles of the Global Business Standards of Codex. The reason is that this framework is focused on reaching the best possible outcome.

The Deontological and Teleological Frameworks of Business Ethics

The deontological framework of business ethics is based on the principle of duty. In other words, one can state that this framework predetermines acting in accordance with rules. The deontological framework is very close to the duty framework, but is contrasted with the consequences framework. One can see that this framework positions an action more important than consequences to which it may lead. Deontological approach views the duty higher and more significant than outcomes (Trevino & Nelson, 2011). The example of using this framework in today’s business environment is when a manager decides to do some action, which is a part of his or her responsibilities and duties, but will obviously not bring a positive result to clients, and will not make any general good. For instance, the employees of the Coca-Cola Company conduct their duties, though they know that Cola is extremely harmful for human health.

The teleological framework predetermines that an action is done with a particular reason for it (Trevino & Nelson, 2011). To be more precise, this framework is oriented on general good. Thus, if a decision helps the majority of people, it is a good decision. The example of the teleological framework of business ethics today is when a company or an organization creates or manufactures a product or provides service that is helpful and useful for the majority of their clients. For instance, companies that manufacture washing machines are oriented on general good, since these machines are extremely helpful in household. Consequently, such companies produce devices that can make people's lives easier. As one can see, two above mentioned frameworks are totally different.