Impact of Ethical Behaviour on Business

INTRODUCTION

Ethics means the study of right and wrong. Ethics refers to a set of principles of right conduct. Business Ethics are principles that guides the way a business behaves. These guidelines help the business to work according to the laws and regulation. ETHICS stands for:- E- effect- decision of a business should not harm the interested parties T- transparency- information of a business should be disclosed H- harmony- decisions of a business should be according to regulations I-Interests-decision of business should be in long term interest of business C- consumers- decisions should be fair for consumers S- Sovereignty- Sovereignty of customers should be respected

1. To study the impact of ethical behaviour on business 2. To study the measures to control unethical behaviour 3. To study the ethical values in business

Responsibilities: - business executives should be responsible for decision taken by them. Ethical business executives accept personal accountability for equal treatment to employees, customers. Fairness: - business executives should equally treat with all people associated with business Respect: - business executives should respect for human dignity, interest of all stakeholders and treat all people with equal respect regardless of sex, religion. Transparency: - ethical business executives create a spirit of openness in the practice of business activities through communication and full disclosure Citizenship: - business executives should Fulfill all legal, economic and social responsibilities towards the interested parties of business. Willing to change: - business executives should be willing to adopt changes according to change in business environment. They should ensure that consumer needs are not static and product should be improved according to requirement.

Political parties: - governing political parties influence the ethics of business through legislative measures. Ex: - safety in factories and mines, anti-pollution measures Social values: - norms, values, traditions and customs influence the business. It compels the businessmen to follow ethical norms. Cultural values: - cultural values have long term impact on ethics. These values prescribe what is right or wrong for an individual or an organisation Personal values: - personal values of employees have impact on business. Ex: - if an employee steals money from business, it will have negative impact on business. Industry codes: - the association of industrial and trading houses such as trade associations, chamber of commerce and industry provide code of conduct for business. Professional codes: - professional codes are provided by the association of professionals such as ICAI, bar council of India, medical council of India

Investors- business should provide safety of money invested by investors and payment of interest on time Employees- business should pay fair remunerations to employees, career opportunities to employees, health work environment and proper training Customer- business should provide complete information about the product, fair price, solution of complaints, privacy in case of personal information of customers Competition- business should create healthy competitions, do not spread wrong information about other businesses Government- business should follow rules and regulations of government. Business executives should pay duties, tax payment on time. Environment- business should follow the rules to protect the environment from pollution Customer loyalty: - loyalty means to purchase the products of a company again and again. If customers feel that they are treated fairly and not overcharged, they will be loyal to the company. Build company reputation: - ethical behaviour of a company helps to build company reputation. Word of mouth publishing by old customers helps the company to attract new customers. Retain good employees: - if healthy work enviranment, fair wages, career opportunity are provided by company to its employees, then they always want to be work for the company. Avid legal problems: - if a company wants to earn profit in an illegal way e.g. abolition of regulations, using bad quality raw material then penalties in form of fees and fines can be imposed on business. Attract investors: - if a business follow ethics in its functions and create an investors friendly environment then investors like to invest money where they feel it is safe. Minimize cost: - ethical behaviour reduces cost in form of credit facility from suppliers, employee retention, higher productivity and customer loyalty. Enhance productivity: - If employee feels fairly treated, they work harder and it helps to increase productivity of business. Healthy competition: - If a company follow ethics, then company will and spread wrong information about other companies. Company‟s it will create a healthy competition in market. Long term gains: - company that follows ethics believes in earning of small but long term gains rather than huge profits in a short time..

1. Dumping waste material into the water the harms the environment of country 2. No paying equal pay for equal work to all employees 3. Price fixing to force smaller competitors out of business 4. False advertisement and wrong information about product 5. Wasteful and unnecessary packaging 7. Unhealthy working environment that harms the heath of workers

1. Unethical behaviour increased the risk of doing business and negatively affects the company image. 2. Unethical behaviour reduces the productivity of business. 3. Increase the employee turnover rate and decrease their performance level. 4. Create a challenging environment to work for employees and in result, employee switches to other companies. 5. Unethical behaviour such as underweight product, wrong information about product creates a negative impact in the minds of customers. 6. Unethical business activities make the business unable to maintain long term relationship with customers 7. Unethical business activities enforces thge government to interfere in business activities and penalties, fines, presentment are imposed on business

Legislative measures:-By legislative measures a business is enforced to follow ethics. Main purpose by enforcing the acts is to protect the interest of different stakeholders like employees, customers. E.g. Company Act, Consumer protection act, M.R.T.P. Act, Environment pollution act. Trade Union: - Trade union work for the welfare of employees, trade union works as a watchdog to check the business decision / activities for its employees e.g. working environment, wages

Consumer Movement: - Consumer movements work to protect the interest of consumers. Ex: If a product is not according to the standards, consumer movement claims for damages. the image of company.

Performing an ethical behaviour business is very essential for the success of business. Good business ethical behaviour creates customer loyalty and attracts new customers to deal with business. Good ethics makes relations better and stronger. Ethical behaviour helps business to maintain good retains with employees, maintain overall it increases the employee‟s moral and they work hard on job and it increased the productivity of business. In conclusion, good ethical behaviour is a key to success for business.

Marketing Management, Pearson Publication, Philip Kotler www.wikipedia.org www.investopedia.com www.researchgate.com

Extension Lecturer in Commerce Department, Government College, Narnaund nishabansal1991@gmail.com