Importance
1. Improvement of society:
Focus on Business Ethics has substantially improved society. Exploitation of workers and children, monopolistic price fixing and profiteering, harassment of employees at workplace etc. cannot be practiced by business enterprises now.
The society has reacted and demanded that business enterprises place high value on fairness and equal rights, thus resulting in improved social welfare.
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2. Maintaining moral course in turbulent times:
Business Ethics is helpful during times of fundamental change, when there is often no clear moral compass to guide leaders through complex conflicts about what is right or wrong. Continuing focus on ethics in the workplace sensitizes leaders and staff for maintaining consistency in their actions.
3. Strong teamwork and productivity:
When an organization finds surprising disparity between its preferred values and the values actually reflected by workplace behaviors, its continuous attention and dialogue regarding values at the workplace builds openness, integrity and community, all critical ingredients of strong teams in the workplace.
Employees feel strong alignment between their values and those of the organization, as well as motivation and performance of employees are also improved.
4. Employee growth:
Focus on ethics in the workplace helps employees face reality, both good and bad, in the organization and gain the confidence of dealing with complex work situations.
5. Ensure that policies are legal:
Attention to ethics ensures highly ethical policies and procedures in the workplace. For example, in matters of hiring, evaluating, disciplining, firing, etc. most firms feel that it is for better to incur the cost of mechanisms to ensure ethical practices than to incur cost of litigation later.
6. Compliance with law:
Ethical programs helps to avoid criminal acts” of omission” and reduce fines, focus on ethical programs results in early identification of ethical issues and violations, so that they can be reported or addressed.
7. Total Quality Management (TQM):
Total Quality Management initiatives include high priority on certain operating values, eg. Trust among stakeholders, performance, reliability, measurement, and feedback. Ethical programs help in identifying preferred values and ensuring that organizational behaviours are aligned with those values for TQM purposes.
8. Diversity Management:
Ethics management programs are useful in managing diversity. Diversity programs require recognizing and applying diverse values and perspectives which are the basis of a sound ethics management program.
9. Strengthens the organization:
(i) Managing ethical values in businesses legitimizes managerial actions
(ii) Strengthens the coherence and balance of the organization’s culture
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(iii) Improves trust in relationship between individuals and groups
(iv) Supports greater consistency in standards and qualities of products
(v) Cultivates greater sensitivity to the impact of the enterprise’s values and messages.