Need for Business ethics
It is necessary to observe business ethics for the following reasons:
1. Survival of the Business Unit: Unethical practices of businessmen will lead to the closure of business unit. The closure of a business unit does not only create problems to business but also to employees and the society in general. Businessmen do not maximize the profit at the cost of existence of a business unit.
The behavior of a businessman is affected by some of the factors such as leadership qualities, integrity, knowledge, skills, influence and exercising power. Businessmen should protect their units in all respects.
2. Growth of Business Unit: Business ethics ensure the growth of a business. Whenever a businessman observes ethics strictly, definitely the particular business unit will get developed. A business could not be run in such a manner, which is detrimental to the interest of society or business itself. So there should be some business ethics for the growth of a business.
3. Earning Goodwill: If business ethics are properly followed by a business, automatically that particular business unit earns a good name among the public.
4. Improving the Confidence: Business ethics are necessary to improve the confidence of the customers, employees and the like. If confidence is infused, customers and employees will popularize the name of the particular business unit.
5. Maintaining Inter-relationship: No business functions independently. Each business has close relationship with another business even though the nature and size of the other business differs. It is expected that each business unit should have a smooth relationship with others. The inter-relationship of business is maintained by adopting business ethics.
6. Solving Social Problems: If a businessman observes ethics in his business, the public will not have any difficulty in getting their wants fulfilled. There is no bargaining between the businessman and public. There is a fair treatment of an employee by him. This will avoid social problems like strike, lockout etc.