The Importance Of Ethics In Business?

4619 Words 19 Pages
Today’s high-intensity business environment makes it more imperative than ever to incorporate ethics into the business strategy. The complex environment of organizations is challenging the way in which organizations respond to social pressures. In light of this, society has developed rules to guide businesses in their effort to comply with society expectations of what is right or wrong. Studies suggest that organizations must balance their aspirations to make profits along with the high ethical standards required by the social order. As more firms recognize the benefits of cultivating business ethics, a firm’s social responsibility, compliant culture, and moral decision-making can positively affect organizational outcomes and financial performance. …show more content…
“If one unethical lapse isn’t discovered immediately, this may lead to a distinct bias in risk analysis management” (Atlas, 2013, p. 53). In other words, without exception, all organizations are vulnerable to unethical conduct. Even those organizations that have a strong code of ethics may be a target from wrongdoing and misbehavior. When unlawful activities or abusive behavior are not detected, the firm may experience a deteriorating impact in their organizational ability to comply with their stakeholders’ responsibilities. In fact, firms that fail to comply with legal actions or are found guilty of unethical practices are sanctioned by mandatory law. Punitive sanctions may be in the form of fines and lawsuits. As a result, the public loses confidence in the organization, and the business’ reputation is critically damaged. Some researchers conclude that building an honorable reputation may take years, yet put an end to it only a few …show more content…
Ethical decision-making entails the process of assessing moral consequences of an activity. Undoubtedly, every business decision has a psychological or moral perspective since it affects consumers, partners, stakeholders, and society in general. Making ethical business decisions is not an easy task and may be related to personal context (Ferrell et al., 2013). An objective examination of data is not sufficient to make ethical decisions; rather business associates must depend on judgment and interpretation. Consequently, the process of making moral decisions starts by selecting a team of competent individuals and analyzing the process through which they arrive at a solution. It may be challenging for a business to refrain from an activity or decision that would lead to an enormous short term profit. However, a company stands to gain more than lose from ethical behavior and co-operate social responsibility. For instance, it is bound to attract more clients while avoiding conflicts that may taint a business’s reputation. For the most part, the components of ethical decision-making structure include moral issue intensity, individual factors, organizational factors, opportunity, and their diverse implications on

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