Changing Times and the Relevance of Business Ethics in 21st Century

Values, Ethics & Morals have always been among the predominant attributes of a ‘Good Human Being’. People have always been judged on the basis of their actions, responses, behaviour and conduct in the public domain. More so, Ethics and Ethical Principles have always acted as the fine line of demarcation between the right & the wrong.

However, with changing times and the world becoming increasingly success driven, it is high time for the relevance of ethics to be introspected. Particularly in the fields of business, irrespective of its scale of operation, many a time, the worth of any individual or any enterprise has been primarily analysed on the basis of revenue they are capable of drawing at the end of the day. So, these are the fields where the existence of Ethics has been questioned since ages. But equally so, these are the fields which have proven the critics wrong by setting unparalleled standards of Business Ethics at numerous instances.

The Outline:

Quite often, ethics is related to ‘Conscience’ or a simplistic understanding of ‘Right or Wrong’. In the context of business, it is the reflection of any company’s ‘Philosophy of doing Business’ i.e. it simply defines the fundamental purposes of any company. It is the code of conduct which guides the business leaders in deciding what to do and what not to, for emphatically contributing towards the welfare of the society at large. Business ethics provides a shell of protection to different social group’s viz. consumers, employees, small businesses, government, creditors and shareholders. It provides a basic framework for doing business.

Just because the definition of ‘Right & Wrong’ is homogenous in itself, business ethics is a relative term. Quite naturally, it differs from one business to another, one locality to another, and also changes from one country to another. In spite of this, the basic elixir of business ethics remains the same at one place and all, i.e. a strict No-No to each and every business mal-practices and unfair trade practices which can possibly impact the society’s welfare.

The Background:

The term ‘Business Ethics’ came into existence first in the United States during the early 1970s. The education over business ethics was started being implemented for millions of students across the world. Thereafter, several firms too started highlighting their ethical stature during the late 1980s, possibly in an attempt to isolate themselves from the then occurring business scandals. However, very sooner, the concept of business ethics caught the attention of academia, media and multiple business entities. Since then, this concept and its effective practice are flourishing strongly across the world despite a section attacking this school of thought as an infringement to the freedom of entrepreneurs.

The Principles:

Business Ethics enlightens the path of doing business for social good. It ensures zero exploitation of consumers under the garb of trade and benefits. By keeping the motive of social welfare as the priority, the code of business ethics nourishes an environment full of trust and transparency among the consumers as well as the employees. It promotes regular payment of taxes to the government, timely audits of the company’s finances, and a lucid communication channel of information to the investors and shareholders. The firm having a strong framework of business ethics completely discourages any sort of secret agreements and meticulously promotes an atmosphere free of bribes and corruption.

The Code:

Technically, the code of business conduct is also known as the Code of business ethics. It is nothing but a set of defined principles designed to guide the individuals associated in any business/work to conduct themselves with utmost honesty, integrity and diligence in all of their actions representing the association.

A code of ethics is of supreme importance to businesses primarily because it ensures that the personnel involved are clear on the vision, mission, values and guiding ideologies of the company/enterprise. Business organizations quite often had to develop a number of policies, rules, and guidelines for governing their functioning in a proper manner. The size and content of these guidelines solely depend upon the size and nature of the business organizations. For small-scale operations, the code of business ethics is usually dependent upon the business owner’s personal values and morals; however, as the business expands, the same code help the companies with a compass to channelize the organization through the nitty-gritty of a turbulent business environment.

A defined Code of Business Ethic helps every organization but is not limited to, accomplishing the under mentioned:

  • Boosting the Sales: Because the consumers are more likely to approach and stay loyal to the companies they trust. This ultimately helps to attaining the monetary targets of any firm.
  • Stabilizing the Rules: Right from the top of the organizational pyramid, to the rock bottom of the hierarchy, if the rules are same for all, it stabilizes the professional atmosphere in its own beautiful way.
  • Personnel Empowerment: When the businesses works with a defined rulebook, the employees feel very rightfully empowered to report any possible ethical sidesteps that they come across.
  • Defining Accountability: A good old saying goes like, “Accountability to more than one is Accountability to none”. Once the accountability and the consequent repercussions in case of any deviation, are defined and properly documented, then only in all the likelihood, the people involved in the business concerned will be aware of their actions, the after effects and possible recourse in reality.

The Relevance:

Though the times have changed, the basic principles of doing righteous business haven’t. Yes, the pristine importance of earning a profit and making money by business has not faded, but so is the eternal valuation of doing the same with proper conduct and ethical means.

Indeed, there were few times in the last few decades when people were made to believe that if it is business then it cannot be ethical, and if it is ethical, it cannot be termed as a business; implying that business is solely meant to make profits nothing else. But, pretty sooner, it came up with utmost clarity that even in the globalized race driven by profit-making, only the ethical companies which sincerely discharged their social responsibilities and welfare of the society have survived competition and have continued to prosper and flourish. Expert says that they cannot survive in the long race until they win others’ faith and clearly, one cannot earn faith by cheating.

A sense of scepticism and distrust always hampers the business image. Trust breeds trust and goodwill in the conduct of business, good business ethics is and will always be necessary for, such mutual trust and goodwill.

Till the goods will continue to be traded & services will continue to be rendered, Business Ethics will continue to be the fulcrum of competitive advantage. Consumers are known to trust the ethical brands and remain loyal to them even during the phases of difficulty and turbulence.

In a nutshell, Trust is the Key and it’ll Always Be!