Significance of Business Ethics: Parboteeah and Cullen- Essay Writing Assignment Solution

Business Ethics Essay

Individual Essay

Topic: Student is required to write a critical analysis essay based on the above topics. It is

expected that student should write approximately 1000 words. Minimum of 10 references from reputable sources are required.

Format: Essay format, times new roman

Assessment criteria:

• Research and data acquirement
• Referencing
• Format, Structure, expression
• Critical analysis and conceptual development
• Conclusions

Significance of Business Ethics

Introduction

Parboteeah and Cullen (2013) define ethics as the moral inclination to doing what is right or wrong with more emphasis on the former. Businesses have a code of conduct, which governs their interaction with the employees, suppliers, customers, investors, and the community as a whole. The question as to whether or not ethics determine the performance of a given entity can be categorized into groups of the crucial players in a business company: customers, employees, investors, legal entities, and the community in general. What is clear here is that prolific human interaction demands some form of etiquette that comes with ethics. A pleased customer praises the company and returns when the opportunity avails itself. A happy employee works diligently at his or her task while any clever investor works with companies with proven potential (Mitchell & Curry, 2003). Therefore, business ethics are directly associated with the performance of companies.

Analysis of the Relationship Between Ethics and Performance

In the corporate world, the key to success lies with the customers and their level of satisfaction. Business ethics guarantee the long term success of a company because such loyal clients return out of desire to experience quality service. More so, returning clients reduce the urgency to market the company because the customer base guarantees stable revenue as well as promotes the company image. The idea behind customer loyalty in the 21 st century has played an imperative role in the growth of firms through social media (La & Yi, 2015). Most companies are opting for technological strategies such as websites and affiliate marketing which targets clients as representatives (Fraering & Minor, 2013). On the other hand, a bad reputation from clients damages the image and sometimes leads to indefinite closure. For example, the efficiency of Google as a technological company has increased its popularity throughout the globe. According to Sterling (2014), Google has over one million servers in all continents. The availability and user-friendly interface of the company continues to draw more clients. Therefore, the fidelity of clients maintains the organization and the only way to ensure that is treating clients with respect, honesty, and competence.

Ethical behavior from the management facilitates a lower turnover when it comes to workers. Job satisfaction is directly proportional to employee retention which saves the company large sums of money in hiring of new employees and lawsuits (Parboteeah & Cullen, 2013). A company which strives to satisfy the needs of the personnel in terms of healthcare, training workshops, bonuses, and safe working environment accumulates a good line of employees over time. Satisfied individuals are more productive than those forced to work out of necessity. Recent studies show that including employees in decision making improves the flow of work and reduces the chances of demonstration or lawsuits. Fairness and openness when it comes to wages and promotions induces healthy competition for growth. According to Maslow’s needs hierarchy theory, the ultimate satisfaction of any worker lies with non-material needs such as respect, affection, and feeling of belonging. Activities such as inclusion in decision making, open-door management policy, and quality healthcare plans are among the factors for development (Forster, 2013). Hence, ethics in the workplace promote the development of any company and retention of elite personnel.

Some companies have strict code of ethics to reduce the changes of legal problems. Companies such as those involved in security matters or pharmaceutical sectors have clearance and sets of rules which all employees follow (Cheeseman, 2013). Such a strategy protects the company against employee theft, lawsuits, and cases of embezzlement. The principle function of a business is to make profits which explain why management may be tempted to find shortcuts in transactions. Most of the time, such paths are illegal and dangerous for its survival; creating a code of ethics increases the chances of success by eliminating unethical conduct. Kottasova (2016) states that Volkswagen (a prominent company) confessed to participating in rigging diesel recently. The scandal created a large turmoil among investors and the general public. The chief executive officer (CEO) lost his job while further investigations continue. The scandal exemplifies what happens as a result of poor ethical standards and the effects to the performance of the organization. Furthermore, ethics attracts investors since the share price is elevated.

Business ethics involves corporate responsibility and citizenship where organizations give back to the community through a variety of activities which benefit the community around. The act in itself acts as a marketing strategy for a wider and stronger customer base (Horrigan, 2010). Most prominent companies sponsor underprivileged children to colleges, build homes for the poor, clean the environment, and participate in fundraising in different occasions. The community is a source of suppliers, customers, investors, and government policies which facilitate the advancement of the company in many different ways. For example, a supplier who acts favorably by lowering the prices of raw materials or services saves the company some capital which positively affects the profit margin. A strong and regular customer base ensures smooth business transactions which increase the overall revenue (Coomber, 2014). Similarly, ambitious employees are more productive at the work place and easier to handle. A company relies on the human force to succeed and ethical conduct influences the outcomes of human interaction.

Conclusion

Standards drawn from Ethical behavior exhibit both macro and micro effects to the business. The behavior of one person in the organization affects the whole unit. As such, human interaction affects the performance of a company; the behavior of the company towards the customer affects their sales and popularity. In addition, the job satisfaction affects the turnover rate of the company in labor issues. Unsatisfied workers cost companies millions dollars in overhead costs due to lawsuits and hiring expenses. Coomber, (2014) found that legal issues and lower profit margins reduce when things occur under proper procedures. In fact, the behavior attracts more investors and customers to the organization because of their stability and competence. In essence, corporate ethics determine whether a company faces scandals or advances in the next stage of development. Many organizations dissolve or go bankrupt as a result of corruption or mismanagement. Corporate lawyers make their living from resolving arguments between companies versus other companies, individuals, or the government (Banerjee, 2007). Formulating and implementing a code of conduct determines the performance of any given company in either macro or micro level.