Ethical factors affecting business

Ethical factors affecting business involve all processes and actions which influence managers and employee behaviour inside the company and with outside environment (customers, partners, competitors). Ethical concerns in management is included in Corporate Social Responsibility concept, and involve duties, morality, integrity, behaviour, what is good and bad for company, employees and society as a whole. There is many similarities between ethical and legal factors affecting business.

Examples of ethical factors affectin business

Ethical factors refer to the moral principles that govern decisions and actions within a business. Ethical factors in business are essential to consider as they can have a large impact on the success of a company. The following are some of the most important ethical factors to consider when making business decisions:

• Respect for Human Rights: Businesses should ensure that their employees and customers are treated fairly and with respect. This includes upholding their right to privacy, avoiding discrimination and ensuring their safety in the workplace.
• Environmental Responsibility: Businesses should strive to reduce their environmental impact and work to protect the environment. This can include developing sustainable production and consumption practices, as well as reducing waste, energy, and water usage.
• Transparency: Businesses should be open and honest with their customers. This includes providing accurate information about their products and services, as well as avoiding deceptive practices.
• Social Responsibility: Businesses should strive to be good corporate citizens and contribute to the local community. This can include providing jobs, contributing to charitable causes, and investing in education and infrastructure.

When to use Ethical factors

Ethical factors should be taken into consideration when businesses are making decisions or taking actions. This can include decisions related to production, marketing, pricing strategies, and customer service. It is important to consider ethical factors in order to ensure that the company is acting in an ethical and responsible manner.

In addition, ethical factors can help to create trust with customers, stakeholders, and employees. This trust can lead to higher levels of customer loyalty and increased productivity from employees. Lastly, ethical behavior can help to protect the company from any negative public opinion.

Overall, ethical factors should be taken into account when businesses are making decisions and taking actions. This can help to ensure that the company is acting in an ethical and responsible manner and can also lead to increased customer loyalty and trust.

Business ethics and ethical business practices

Business ethics deals with moral issues (beliefs, norms, values, etc.) found in the business. It should be noted that business ethics is a term with quite a multifaceted meaning. A variety of content, which is attributed to business ethics depends on the context of its occurrence. Each approach, however, boils down to the general and the basic conclusion that economics should serve man, not vice versa. Entrepreneurs can not be guided in their actions solely by profit. Ethics, as having theoretical knowledge of fundamental importance for our actions, it is rational and reasoned knowledge of the values and duties of human action, arising from the fact of being human. Business ethics is concerned of limits to human economic activities.

Ethical issues in business

Business ethics is both part of the prescriptive (normative) ethics establishing standards of conduct, recommending certain behaviours, as well as descriptive ethics, describing the moral attitudes and behaviours of entrepreneurs. In principle, the practical goal of business ethics is to solve ethics problems in business.

Ethical factor in area of business communication

• proper marketing techniques, telling truth about products and services,
• informing customers, employees and partners about company's mission statement and goals,
• respecting religious and social values of employees, customers and partners,
• negligence in informing shareholders about company's situation, managerial ethics
• insider trading, hiding information about mergers, acquisitions, investments, etc.

Internal and external regulations concerning business behaviour

• industry specific regulations (marketing code, broadcasting code),
• regulations on discrimination in hiring and promoting,
• consequences of physical and verbal harassment in the workplace,

Ethical factors concerning production processes

• eliminating unsafe working conditions,
• avoiding processes and technologies that jeopardize the safety of the employees and public,
• producing product safe for customers,
• waste product utilization and recycling,
• profiting from products bad for health (drugs, cigarettes, alcohol) and people (gambling),

Ethical factors in motivation and human resources management

• priority of performance over well-being of employees,
• promoting unethical behaviours toward customers (cheating, misinformation),
• low trust between employees and management,
• promoting employees informing about unethical behaviour of superiors and colleagues,
• enforcing measures to discover and eliminate bribery, side-deals, preferential treatment, etc.
• creating healthy working conditions for employees
• discrimination of female employees by male superiors and colleges,
• implementing and enforcing codes of ethical practice (code of conduct) within company,

International trade and its influence on business ethics

• preferring fair trade products, over low priced products produced unethically (bad working conditions, low wages, etc.).
• preferring foreign suppliers from countries protecting environment, reducing CO2 emissions, using strict health regulations of farm products, implementing sustainable development, protecting human rights, banning children slave work, etc.
• changing native cultures by spreading products and life styles foreign to them,
• trading and cooperation with states at war, and embargoed by international community,

Advantages of using Ethical factors affecting business

Ethical factors can have a positive effect on a business' success. The following are some of the most important advantages of ethical factors in business:

• Improved Reputation: Adhering to ethical standards can help to improve a business' reputation and increase customer loyalty. This can lead to increased sales and more investment opportunities.
• Increased Employee Satisfaction: By treating employees fairly, businesses can create a more positive work environment and improve employee satisfaction. This can lead to better performance and increased productivity.
• Reduced Risk: By following ethical guidelines, businesses can reduce their risk of legal action and other complications. This can help to protect their assets and ensure the longevity of their business.

Overall, ethical factors can have a positive impact on a business' success. By following ethical standards, businesses can improve their reputation, increase employee satisfaction, and reduce their risk.

Limitations of Ethical factors affecting business

Despite the importance of ethical factors in business, there are a few limitations that should be noted. Firstly, businesses must balance their ethical standards with their desire to remain competitive and profitable. This can be a difficult task, as ethical decisions are often more costly than non-ethical ones. Additionally, ethical principles can be difficult to implement in practice, as they require employees and customers to adhere to the same standards. Finally, ethical standards can vary between countries and regions, making it difficult to create a one-size-fits-all approach.

In conclusion, ethical factors are an important part of any business, but there are some limitations that should be taken into consideration. Businesses must strive to balance their ethical standards with their desire to remain competitive, as well as ensure that their practices are able to be implemented in practice. Additionally, ethical principles can vary between regions, making it important for businesses to be aware of the local standards.

Other approaches related to Ethical factors affecting business

Another approach to understanding ethical factors affecting business is to consider the ethical theories that are commonly applied to business decisions. These theories include Utilitarianism, Kantianism, Virtue Ethics, and Contractualism.

• Utilitarianism: This theory states that the ethical action is the one that will provide the greatest benefit or happiness for the greatest number of people. Businesses should strive to maximize the good for their customers, employees, and society.
• Kantianism: This theory states that ethical action should be based on the universality of one's actions. This means that businesses should strive to act in a way that would be accepted by everyone, regardless of time or context.
• Virtue Ethics: This theory states that ethical action should be based on the virtues of being a good person. Businesses should strive to act with integrity, honesty, and fairness in order to create a positive environment for their employees and customers.
• Contractualism: This theory states that ethical action should be based on the mutual agreement of all parties involved. Businesses should strive to be clear and transparent in their contracts, and should strive to ensure that everyone is treated fairly and equitably.

Overall, understanding ethical theories can help businesses to make the right decision in difficult situations. By following the principles of these theories, businesses can ensure that their decisions are fair and just, and will benefit all parties involved.

Ethical factors affecting business — recommended articles

Ethical objectives — Importance of business ethics — Ethical values — Quality of work — Intercultural management — Discipline of work — Ecological factors affecting business — Corporate social performance — Consumer protection

References

• Donaldson, T., & Dunfee, T. W. (1994). Toward a unified conception of business ethics: Integrative social contracts theory. Academy of management review, 19(2), 252-284.
• Durnev, A., & Kim, E. (2005). To steal or not to steal: Firm attributes, legal environment, and valuation. The Journal of Finance, 60(3), 1461-1493.
• Goodpaster, K. E. (1991). Business ethics and stakeholder analysis. Business ethics quarterly, 1(01), 53-73.
• McWilliams, A., & Siegel, D. (2001). Corporate social responsibility: A theory of the firm perspective. Academy of management review, 26(1), 117-127.
• Pearce, J. A., Robinson, R. B., & Subramanian, R. (2000). Strategic management: Formulation, implementation, and control. Columbus, OH: Irwin/McGraw-Hill.