Advantages of Ethical Behavior and Reasons for Unethical Business Practices
From a business organization’s point of view ethical behavior and proper code of conduct doesn’t produces any immediate or tangible advantages generally but on the longer term the advantages and benefits of having a ethically correct behavior gains various advantages to the company. An organization should never forget that they are established in a society and they cannot work effectively without their support and acceptance. When a organization tend to behave in a highly ethical manner they gain trust and confidence of the customers, governments, community and society at large as well as confidence of the employees. From a business point of view when an organization develops an image of being ethical their customers tend to rely on them and buy their products and services without worrying about their quality or prices. Further if we consider from a human resource management point of view ethical organizations are preferred destinations of majority of productive and efficient employees. Reasons being, availability of fair opportunities, chances of growth, transparency in procedures, equitability in benefits and social status of being related to an ethical organization. It should be considered from the Maslow’s theory of needs where an individual after satisfying its basic needs of security’ food and shelter’ companionship and money tend to look for a social stats and self actualization. An ethical organization is able to provide a good opportunity of developing social status and self satisfaction among employees. This is a win-win situation for the organizations as they are getting the best of the employees and a large and loyal consumer base.
Ethical behavior also helps in developing an image which helps the organization in developing its business in a rapid manner. For example if an organization is known for its highly ethical behavior and tendency to always consider the social causes and follow the land of the law and regulations accurately then they would be more trusted by the government agencies and they will less questioned or scrutinized for any business activity owing to the previous image. However organizations should be very careful about these benefits and never to take undue advantage of it because once this image is broken the negative image would be much more severe because nobody expected unethical behavior from a known ethical firm. Ethical behavior also helps an organization to gain sustainable competitive advantage over other players. The key term in last sentence is sustainable because by unethical and questionable activities many organizations tend to take short term gains and advantages but as and when they are exposed there advantages loses and customers inclined towards other organization. A rebound customer if finds ethical behavior in other organization then they become their lifelong customers and give the organization a sustainable advantage which cannot be removed easily.
Tangible benefits of ethical behavior and code of conduct can be less attrition rate of employee’ lesser number of complaints from the consumers and less legal claims and complications’ a large pool of satisfied customers who indirectly act as a promotional point for the organization and a healthy and long term profitability which is uninterrupted and lack any negative implications. Increasingly organizations are getting aware of the importance of ethical behavior especially because consumers are getting aware of it. For example many consumers have stopped using cosmetic products which are animal tested. Forcing organizations to stop the practice and provide proofs that they are using ethical practices in testing of products.
Basic philosophy of the business organizations plays a very important role in their ethical practices. For example if an organization established and conduct its business on unethical practices and gets their fame from the same then its employee will also follow the same game plan and attempt to please the organization and bosses by gaining maximum benefits without worrying about the ethical impacts. Such organizations do exist in the business and their philosophy is to gain publicity and do business whatever the cost Is. A good example of such business philosophy is a lot of fashion industry organization and media companies. These companies will attempt to indulge in some unethical activity and hog the media attention and glamour. According to them such activities gives them the desired fame and also develops an image for them. it is also observed that for a short period of time these companies do get fame and remains in the quick recall of people. Success of such tactics leads to many organizations towards unethical practices and behavior because the sudden burst of fame and attention helps the organization in gaining their short term goals and objectives. To avoid such situation it is desired from the common people to not get impressed by such unethical tactics and see beyond the polished presentation. Once this phenomenon is developed companies would cease to use such practices and focus their efforts on ethical promotion and advertisement. This is the reason why some companies might get attracted towards the unethical practices and they cannot be trusted over the period of time if they will not turn towards the unethical practices.
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