Advisory Review on Business and Management Ethics

Management and Business Ethics

Managers play an important role in establishing a company’s ethical tone. A company's leaders are responsible for setting standards for employee behavior.

It's important for managers to play an active and positive role in creating a working environment, where employees are encouraged and rewarded for acting in an ethical manner.

Managers should show in action by following ethics themselves, so that in turn employees may emulate and follow them.

They should remember the fact that leading by example is the first step in fostering a culture of ethical behavior in their companies.

Importance of Ethics

Ethical behavior improves the atmosphere at work and motivates the employees. Following ethics evokes a sense of pride for the company and improves its image in the eyes of the employees.

From the outer point of view, ethical behavior improves the public image of the company, and sets an example for others to follow.

Companies and business persons, who wish to have long term business, must adopt sound ethical decision-making practices.

Knowing the difference between right and wrong and choosing the right is the foundation for ethical decision making.

In many cases, doing the right thing is what leads to the greatest financial, social, and personal rewards in the long term.

Image credit: ReadytoManage

Management ethics are the ethical treatment of employees, stockholders, owners, and the public by a company.

While a company needs to make a profit, it should have good ethics also.

Employees should be treated well. By being respectful of the environment in the community a company shows good ethics.

Ethics and ethical behavior are important parts of healthy management. From the point of view of management, behaving ethically is an integral part of long - term career success.

Organizational ethics

• The company should care for the consequences of its actions on the society.
• The company should expand its activities apart from required legal obligations or formalities.
• The company should adjust its policies according to the social conditions, demands and pressures.
• The company decides to concentrate on its long-term goals for the benefit of society in general.

Ethical decision-making  

When taking a decision the management should following criteria of ethical decision-making:

• Legality – what will be the legal consequences of the decision?
• Fairness – What effect does the decision have on those involved in decision making and those involved?
• Effectiveness – Decision once implemented and takes the form of action will it be able to achieve the goals and results?

Any decision that is illegal, not fair and not effective should not be taken. If a business or a company is built on strong foundation of business and management ethics, no one and nothing can stop it prosperity and progress.