Introduction
Within the last half of this century, business has increasingly become one of the most important things worldwide. Any country’s Gross Domestic Product level largely depends on how they manage their and also on the kind of incentives they grant to investors who wish to invest in their countries. Therefore there is need to ensure that ethics and codes of conducts are adhered to in order for any form of business to perform well in the market.
Theory on ethics
The term ethics has been derived from a Greek word ethikos to mean custom. Fernando (2009) defines ethics as one of the branches in axiology which when combined with metaphysics, logic and epistemology forms philosophy. Ethics serves the purpose of discerning what is right from wrong hence it is also referred to as moral philosophy.
Ethics servers the purpose of discerning what can either be considered right and what can be considered wrong. In any business environment, both personal ethics and business ethics will apply in order to ensure that the business meets its all-round target. Personal ethics is what forms the character of an individual while business ethics is concerned with moral conducts within an organization. A combination of this two grants a very good business environment.
Fraud is one of the basic problems facing businesses. It is the tampering of information with an intention of deceiving someone in order to gain. This form of actions is not allowed in any business environment. . Most of the companies see fraud as one their major problems to deal with.
Wells (2011) has pointed out examples of fraud cases in his book. An example from his book includes; it took a period of around three years since Monarch received a notice from SEC to the period when he actually got the formal report issued to him. Two major findings from the report that were made are
- He had overstated the assets of the company when in real case most of the assets had actually expired.
- There was a lot of imbalance in the business records
Such issues of fraud and many others are what most businesses have to endure while making a lot of losses in the market. There are certain principles in a business environment that can be admired including;
Being trustful
No customer wants to do business with a company he or she cannot trust. A business needs to guarantee its customers that they can trust investing in their company. Customers also need to be assured that their money is safe with the companies they either save or invest in.
Open to new ideas
A good leader should be bold enough to be open to new ideas. Such ideas are what drive the business to greater heights. Businesses that follow up on the right ethics always find it with smart people joining it. Such smart people need to be given an opportunity to also share their smart minds with the business goals to achieve.
Goal Oriented
As a leader, work towards honoring all you have committed and obligated to do putting more effort in their lines of duty in order to ensure that whatever goals have been set for the to achieve are logical and that the business is working in the right direction towards achieving these goals.
Taking part in community functions
A business especially its leaders should work hard enough to ensure that the business understands what goes around within the community the business has been set in. Maintaining a good relationship with the community guarantees you a long-term operation in the business within the area of your operation and beyond.
Respecting people
As a business leader it right to treat all people regardless of how old they are, their gender, race or any form of differences whatsoever, professional respect is very vital in any business operation.
Have a good control of accounts
Good recording keeping qualities are required for any management. Strive to ensure that you have a good quality of records. This will also allow you to trace issues of fraud cases.
According to Blake and Gowthorpe (2005), ethical issues of accounting need to be given proper attention because accounting is part of human activity that is regarded by people who are practicing it as neutral and value free.
According to Simpson (2011), he stated that, without integrity, all things are considered useless. Integrity is the way to go in order for a business to succeed Good record will also ensure that you keep track of the business performance Through such documents you will be able to tell which people were involved in that transaction hence, in case of imbalance of accounts or in any case issues of fraud, it will be easy for to hold someone accountable.
One needs to understand that for your business to maximize its profits, business ethics would play a significant role. No matter how small a business is, if it subscribes to the right policies then it has a very great potential of scaling the heights of a successful business.
According to Sullivan, Smith and Esposito (2012), even a small business with the right business ethics and personal ethics for its owners, it would scale numerous heights .When a business maximizes on ethical issues especially on qualities like fairness in administration, honesty in how you work on your records of business finance and also being a person of integrity then it would serve as a guarantee that the business will perform exemplary good.
Certain issues that are against the ethics in a business environment need to be discouraged and in the event that they happen, heavy penalties should be implanted to deal with such misconducts. Other than fraud, there are other misconducts that are against business ethics and they in fact reduce the performance of a business. One very crucial issue especially in developing countries includes bribery.
Bribery interrupts the good performance of a business. In fact, a lot of an organization’s resources are going to be wasted because of bribery and other corruption issues.
Events where workers are sexually harassed by their employers is also another form intimidating the business ethics in an organization. Such vises contribute to low productivity of business. This is because sexual favors sometimes serve as a guarantee for people to get promotions even in departments they are not qualified for.
According to Klebe and Richard (2003), they argue that how well you will manage your business determines the level of profits the business will have. Good ethics guarantees easy management of a business.
Concepts in ethics
Earlier we had seen that ethics has a lot of relationship with philosophy. In fact, ethics can broadly be explained as a subset of philosophy that is concerned with questions dealing with qualities of the human conduct. A philosophers responsibility is distincting what is right from wrong.. An overall term for such kind of action is what we commonly refer to as moralists. The classification of ethical theories can be in two categories namely;
- Motivational ethical theory or deontological ethical theory
It refers to a consequence that can be rightly judged as either right or wrong. A situation is analyzed and a result is given to determine whether it is good or bad. It also looks at the motivation behind an action and looks at exclusive reasons why it can be termed as either right or wrong regardless to whether that consequence is seen as an action to consider.
- Consequentiality or teleological ethical theory
This theory explains that in order to consider an action right or wrong we evaluate the consequences it brings about a particular subject. A good consequence results from a good action. Again, any outcome from an action or event that is considered bad can be referred to as a bad consequence.
It is therefore very vital and important that any form of business rightly looks at, evaluates, and if possible consider the possible end result of an action made. Any business strives in order to ensure that their results to its customers are good.
- Justice theory
Every individual regardless of what makes them distinct has a right to be treated in all fairness. A business’ priority should be to ensure that all its customers are treated right and that no customers are despised based on what defines them. Any business in the market should give priority.
Importance of ethics in business
For any form of organization, rules and regulation are vital in its operations. How well that business will perform, depend s on how serious the management adheres to people following the rules in the process of business.
For a business to perform, the right ethics need to be put I place. This is because even the persons employed have a high productivity level because of the kind of environment they are working under. It also becomes easy for the management of that business to control the business because they have certain codes of conducts that they need to follow in their administration.
References
Amstutz, M. (2013). International ethics : concepts, theories, and cases in global politics. Lanham: Rowman & Littlefield Publishers.
Baggini, J. & Fosl, P. (2007). The ethics toolkit : a compendium of ethical concepts and methods. Malden, MA Oxford: Blackwell Pub.
Duska, R., Duska, B. & Ragatz, J. (2011). Accounting Ethics. Hoboken: John Wiley & Sons.
Halbert, T. & Ingulli, E. (2012). Law & ethics in the business environment. Mason, OH: South-Western
Klaushal, S. (2006). Business ethics : concepts, crisis and solutions. New Delhi: Deep & Deep Publications.
N.J: Wiley.Cengage Learning. Fernando, A. (2009). Business ethics an Indian perspective. Chennai: Pearson Education.
Singleton, T. & Singleton, A. (2010). Fraud auditing and forensic accounting. Hoboken, N.J: Wiley.
Tittle, P. (2000). Ethical issues in business : inquiries, cases, and readings. Peterborough, Ont: Broadview Press.
Wells, J. (2011). Financial statement fraud casebook baking the ledgers and cooking the books. Hoboken,