Why is Ethics So Important in Business?

Ethics, according to Bottorff (2004) is defined as: “a body of principles or standards of human conduct that govern the behavior of individuals and groups. Ethics arise not simply from man’s creation but from human nature itself making it a natural body of laws from which man’s laws follow”(p. 3).

Ethics plays important roles in the organization. Bottorff (2004) gives both good and bad examples of what happens when organizations have positive or negative ethics. Poor quality ethics are described here as “damaging organizational performance” productivity is lowered, group dynamics suffer, communication becomes more elusive and complex and a declining organizational environment is the result.

Good ethics; however, can have positive effects on organizations and their results. Productivity increases, group dynamics and communication increase and risk in the organization, decreases.

Ethics need to be high on the list for organizations because it will lessen total negativity within the organization and uplift and encourage reasoning and performance from both the managers and employees.

Ethics can be understood as relative to the individual because the individual’s reputation is on the line, and from this ongoing positive reputation, success and personal satisfaction will be the net results. In the business world of yesterday and today, it is vital to acquire and maintain and a good reputation; for if one’s words or handshake is worth nothing, then the final result will be failure, low productivity and negativity.

I believe there can be and already is hope of promoting business ethics in a business culture. Trevino, Nelson (2005) site several reasons that this is true.

First, businesses, economically speaking, need to use “power responsibly or risk losing it.” Secondly, businesses have a responsibility, both legally and ethically to stakeholders; this includes justice and stakeholder rights. Lastly, when ethical responsibility and economic responsibility have conflicting agendas, then the corporation has a huge social responsibility challenge that must be met.

Copyright Ann Star 2009



Source by Ann Star