Business Ethics: Business Ethics Role and Importance What is ethics?: What is ethics ? The word ethics is derived from Greek word “Ethos” which means “Character”. So Ethics focuses on the study of what is the proper course of action for man. Definition: “It is concern with what is right or wrong, good or bad, Fair or unfair, responsible or irresponsible, obligatory or permissible, praiseworthy or blameworthy” What is Business Ethics?: What is Business Ethics ? Business ethics can be defined as, “the critical structured examination of two people and institution should behave in the world of commerce”. Business ethics are moral principles concerning acceptable and unacceptable behavior by business people. Importance…?: Importance… ? Business ethics is that aspects of corporate governance that has to do with the moral values of managers encouraging them to be transparent in business dealings. Good business ethical practices are the backbone of every forward thinking business. Raise the goodwill: Raise the goodwill Business ethics bring much goodwill to a company that will in the long run translate into tangible benefits. Profitability: Profitability The first direct benefits of ethical business operation is ‘profitability’. A company that is based on sound business value is more likely to be profitable than a company operating on corrupt practices. Going Concern is assured: Going Concern is assured being profitable will ensured that the company be around for at least the next twelve months. It is the desire of every business entity to be in the market for a longer time. Ethical business practice is the way to go if you and your business truly value going concern. Competitive Edge: Competitive Edge Quality saves money is a popular belief in accounting, business and investment. You will save the cost of reworking defects borne out of using poor equipment and employment of sharp practices. Quality of the Product: Quality of the Product Good business ethics policy will definitely reflect on the quality of your product, because you have the satisfaction of your customer at hand while you were producing your product. Role of business ethics: Role of business ethics Be sure you are right, Then go ahead. Davy(David) Crockett 1786-1736 Stop business malpractices : Stop business malpractices Some unscrupulous businessmen do business malpractices by indulging in unfair trade practices like black-marketing, artificial high pricing, adulteration, cheating in weights and measures, selling of duplicate and harmful products, hoarding, etc. These business malpractices are harmful to the consumers. Business ethics help to stop these business malpractices. Improve customers’ confidence : Improve customers’ confidence Business ethics are needed to improve the customers' confidence about the quality, quantity, price, etc. of the products. The customers have more trust and confidence in the businessmen who follow ethical rules. They feel that such businessmen will not cheat them. Survival of business: Survival of business Business ethics are mandatory for the survival of business. The businessmen who do not follow it will have short-term success, but they will fail in the long run. This is because they can cheat a consumer only once. After that, the consumer will not buy goods from that businessman. Safeguarding consumers' rights : Safeguarding consumers' rights The consumer has many rights such as right to health and safety, right to be informed, right to choose, right to be heard, right to redress, etc. But many businessmen do not respect and protect these rights. Business ethics are must to safeguard these rights of the consumers. Protecting employees and shareholders: Protecting employees and shareholders Business ethics are required to protect the interest of employees, shareholders, competitors, dealers, suppliers, etc. It protects them from exploitation through unfair trade practices.