3. ethics in business

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What is Ethics

The word ethics is derived fromthe Greek word ethos, which refers

to character.


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Some years ago, sociologist Raymond Baumhart asked

business people, "What does ethics mean to you?" Among their

replies were the following:

1."Ethics has to do with what my feelings tell me is right or

wrong."

2."Ethics has to do with my religious beliefs."

3."Being ethical is doing what the law requires."

4."Ethics consists of the standards of behavior our society

accepts.


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many people tend to equate ethics with their feelings.But being ethical is clearly not a matter of followingone's feelings. A person following his or her feelings

may recoil from doing what is right. In fact, feelingsfrequently deviate from what is ethical.

2. Nor should one identify ethics with religion. Mostreligions, of course, advocate high ethical standards.

Yet if ethics were confined to religion, then ethics would apply only to religious people. But ethicsapplies as much to the behavior of the atheist as tothat of the saint. Religion can set high ethical

standards and can provide intense motivations forethical behavior. Ethics, however, cannot be confinedto religion nor is it the same as religion.


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Finally, being ethical is not the same as doing

"whatever society accepts." In any society, mostpeople accept standards that are, in fact, ethical. But

standards of behavior in society can deviate fromwhat is ethical. An entire society can become ethically

corrupt.

Ethics is a combination of all of the above


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DefinitionEthics is defined as the ability to distinguishbetween right and wrong and to act accordingly.

Ethics comes from religion, parents , society,teachers, law .

A leader is responsible in creating ethics in acompany .


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Ethics in business Ethics in business are nothing but the dos and

donts followed by the business users in thebusiness. In other words it could be referred asset of principles a business man ought to follow.There should be business ethics means that

the business should be conducted according tocertain self recognized moral standards. Fewunethical elements in the present day businessare cheating, stealing, lying, bribing, corruptingetc.


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The term business is commonly referred to the

commercial activities achieved at making profit.But gradually there is a substantial change in theway in which people viewed the business.

It is profit maximization in long run besidesfulfilling the ethics in the business. A business isregarded as social institution forming integralpart of social systems .The business is viewed

as subsystem to the social system.


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SOCIAL RESPONSIBILITIES OFBUSINESS

A firm expresses its responsibility to the societyby reacting in either or both of the following twoways.

The manner in which it carries out its ownbusiness activities

The welfare activities it takes upon itself as anadditional function


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RESPONSIBILITY TO SHAREHOLDERS

1.To make the shareholders feel secured byprotecting their investments

2.To be transparent

3.To allow them to participate in decision making

4.To ensure them good dividends


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EMPLOYEES

To offer employees fair wages

To establish better working conditions

To provide them fair work standards and norms.

To educate the employees by adopting proper trainingmethods.

To recognize and appreciate the work of the employees and

reward them or to promote them.

To install grievance handling cell.

To enable them to involve in decision making.


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RESPONSIBILITY TO

CONSUMERS

To offer the products at reasonable prices.

To provide pre-purchase and post purchase service to theconsumers.

To facilitate research and development to meet the customerrequirements.

To maximize perfections in distribution systems

To provide sufficient and necessary information about theproduct.


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IMPORTANT ETHICAL PRICIPLES THAT A BUSINESS

SHOULD FOLLOW

Do not deceive or cheat the customers by sellingsub standard or defective products.

Do not resort to hoarding, black marketing .

Do not destroy competition.

Treasure sincerity and accuracy in advertising,labelling and packaging

Ensure payment of fair wages and fair treatmentto the internal customers as well as externalcustomers and share holders.


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Do not hamper the image of competitors by

unfair practices. EXAMPLE:-Publishing false information about

competitors, bribing the retailers etc.

Make accurate business records so that

transparency to the share holders can beachieved.

Pay taxes and discharge other obligationpromptly.

Do not form castle agreements, even informal, tocontrol production, prices etc to the commondetriment.


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Need or importance of

business ethics


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Good ethics bring goodwillGoodwill leads to trust

Trust leads to confidencehigher profitability.

3. ethics in business

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