Business Ethics – Article Example
Business ethics refers to a system of checks that evaluate the behavior of businesses in relation to other businesses and to the public they serve. The purpose of business ethics is to guide businesses’ activities to avoid friction with other businesses or with the external environment. A business that does not honor business ethics is often considered unfit to serve the community or transact business with other businesses.
The origin of business ethics often involves the evolution of accepted societal behaviors. This means that business ethics evolve with each society. A good example is the period of slavery. During this period, business ethics allowed businesses to trade in human beings they had abducted from another continent.
One cannot stress enough the importance of business ethics to the business itself and to the environment within which it operates. A major role of business ethics is to prevent the exploitation of the community by businesses. The main purpose of any business is to make money. Businesses therefore strive to maximize profits within the shortest period. This often causes businesses to cut corners when transacting and producing products. This has led in more than one occasion to the production of poor quality and sometimes-lethal products, which are then sold to the community for consumption. Business ethics prohibit businesses from undertaking illegal procedures and requires them to follow all regulatory procedures set by the appropriate authorities.
Another key importance of business ethics is reducing unfair competition. For a business to survive, it has to make profits while competing with existing businesses. The more superior a business becomes, the more profitable it becomes. Unfair competition often involves illegal business transactions that lead to the failure of other competing businesses. It can lead to monopolies which often end up exploiting the market as well as stagnating development for lack of competition.
Business ethics are therefore essential for any particular society. While businesses are the core to many economies, if left unchecked they might cause the economies to collapse.