Mgt610 VU Current Assignment No. 1 Spring 2012 Solution
Wednesday, April 11, 2012 Posted In MGT Edit This“Is it compulsion or persuasion to implement ethical
practices in business? Take a position and support
with relevant facts
Idea solution:
In organization, while working its necessary to follow the ethic’s rules and persuade
them in day to day work by employees. Compulsion in implementing ethical
practices will help business to grow. People feel responsible when they compelled to
follow the ethics and it will be good for the business as well in following :
1. 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.
2. 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. He will also tell others not to buy from that businessman. So
this will defame his image and provoke a negative publicity. This will result
in failure of the business. Therefore, if the businessmen do not follow ethical
rules, he will fail in the market. So, it is always better to follow appropriate
code of conduct to survive in the market.
3. 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.
4. 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.
5. Develops good relations : Business ethics are important to develop good and
friendly relations between business and society. This will result in a regular
supply of good quality goods and services at low prices to the society. It will
also result in profits for the businesses thereby resulting in growth of
economy.
6. Creates good image : Business ethics create a good image for the business
and businessmen. If the businessmen follow all ethical rules, then they will be
fully accepted and not criticised by the society. The society will always
support those businessmen who follow this necessary code of conduct.
7. Smooth functioning : If the business follows all the business ethics, then the
employees, shareholders, consumers, dealers and suppliers will all be happy.
So they will give full cooperation to the business. This will result in smooth
functioning of the business. So, the business will grow, expand and diversify
easily and quickly. It will have more sales and more profits.
8. Consumer movement : Business ethics are gaining importance because of the
growth of the consumer movement. Today, the consumers are aware of their
rights. Now they are more organised and hence cannot be cheated easily.
They take actions against those businessmen who indulge in bad business
practices. They boycott poor quality, harmful, high-priced and counterfeit
(duplicate) goods. Therefore, the only way to survive in business is to be
honest and fair.
9. Consumer satisfaction : Today, the consumer is the king of the market. Any
business simply cannot survive without the consumers. Therefore, the main
aim or objective of business is consumer satisfaction. If the consumer is not
satisfied, then there will be no sales and thus no profits too. Consumer will be
satisfied only if the business follows all the business ethics, and hence are
highly needed.
10. Importance of labour : Labour, i.e. employees or workers play a very crucial
role in the success of a business. Therefore, business must use business ethics
while dealing with the employees. The business must give them proper wages
and salaries and provide them with better working conditions. There must be
good relations between employer and employees. The employees must also be
given proper welfare facilities.
11. Healthy competition : The business must use business ethics while dealing
with the competitors. They must have healthy competition with the
competitors. They must not do cut-throat competition. Similarly, they must
give equal opportunities to small-scale business. They must avoid monopoly.
This is because a monopoly is harmful to the consumers.
Some more are:
• Enhanced reputations and good will
• Reduced risks and costs
• Protection from their own employees and agents
• Stronger competitive positions
• Expanded access to capital, credit, and foreign investment
• Increased profits
• Sustained long-term growth
• International respect for enterprises and emerging markets
