Purpose of Ethics in Business

This article discusses the purpose and importance of ethics in the business context. It explains how ethics guide the conduct of businesses and create a positive working environment. It also emphasizes the need for businesses to consider the well-being of others and conduct themselves in an ethical manner.

Answer to question 1)
Purpose of ethics
“Ethics” are the moral principles of right and wrong that prescribes what human ought
to do. It helps the individuals to understand the difference between right and wrong and
provides practical guidance to the life of individuals (Shaw, Barry, Issa, Catley & Muntean,
2016). In the business context, these guidelines are used by the companies to create a positive
working environment. It reflects how the business will conduct itself and its transactions. It
laid emphasis on doing the right thing.
Relation of ethics to business
The purpose of using ethics at the workplace is to construct a moral code of conduct
which prescribes the expectations from all the members at the workplace. The certain rules of
ethical thinking which include:
The people must consider the well-being of the others including the non-participants.
It specifies that the person must not always focus on the self-interest but must weigh the
effect on the decisions on the other people too. The business must think of the business
community rather than as an isolated individual. It must not solely depend upon the law
because there is certainly unethical behaviour that is not considered illegal. It must
understand the difference between right and wrong. The business must focus on the benefit of
the society it must conduct the business in an ethical manner. In conducting the business, the
person must be conscious about its own reputation and must think what would be the effects
of its decision of others. The business organisation must consider itself as a citizen of the
business community and must focus on the actions that are right for all.
Answer to question 2)
Benefits of paying taxes to society
Paying the right amount of taxes is considered as a social responsibility and
contribution to the community. It helps the government to collect the funds and develop the
country developing basic facilities and amenities, which includes building roads, education
centres and enhances government services. It helps in increasing the job opportunities for the
individuals and improves the conditions of the business. Paying the right amount of taxes
helps the business to gain good credit rating, which in turns provides easy loans and
expansions of the business. It is considered as the mere responsibility to be a responsible
citizen of the country and contributes towards the community. It helps in providing a sense of

satisfaction to the taxpayers and considers themselves as responsible citizens. It benefits
society by reducing the inequalities between rich and poor and allowing equal distribution of
income. It helps the business to create good investor value as paying of taxes by the business
promotes the positive image of the company. It helps the economy to face the obstacles and
promote the development of the private sector. The taxpayers must not consider tax as a
burden but as a responsibility towards the development of the nation. It helps the government
to focus on the middle income and lower level groups. It also provides benefits to the public
health because the consumers have to pay taxes for the purchasing of cigarettes and alcohol.
It helps the government to fulfil the needs of the community.
Answer to question 3)
The philosopher Adam Smith had developed the phrase “invisible hand,” which was
first described in his book 'The Wealth of Nations.' The idea behind the existence of the
invisible hand is that people should be allowed to pursue their own self-interests constrained
by the economic competitions and sympathy for man, they tend to facilitate the needs of the
other stakeholders more effectively rather than the intentional efforts to pursue those
interests. According to me, in context of business, the theory does not holds much relevance
as compared to the economic context, because in the context of increased competition, and
increased pressure from the shareholders, the businesses have consistently failed to address
the issues of the other stakeholders. In the context of Australia, it is significant to note that
lately inquiries have been conducted for the entities belonging into the insurance, banking
and the superannuation services. This was because the major entities like ANZ Bank,
Freedom Insurance entity, Commonwealth Bank of Australia have been consistently failing
to address the needs of the other stakeholder groups and have thus failed to perform their
duties belonging to the corporate social responsibility voluntarily. A numerous major entities
were engaged in unethical business practices undermining the moral values and thus Royal
Commission was established to conduct the inquiries into said acts and recommend on the
same (Hutchens, 2018). Thus, when it comes to the narrow view of the CSR, it is imperative
for the companies to be governed by regulators and the relevant laws, to be even more
considerate of their responsibilities towards the societal wellbeing.
Answer to question 4)
In context of the MGT 211, the concept and relevance of justice is explained as
follows. The business entities play a more vital role than what is perceived, in imparting the
social justice. The concept of social justice is based on the principles of equality, human

rights, solidarity, values, and dignity of every individual and community that is associated
with the business enterprise. The process of the expansion of the social justice by the entities
is referred to as a transformative process of using new ideas to solve social problems like
unemployment, poverty, health issuers and others. The businesses can achieve it by sharing
the values with all kinds for stakeholders of every category. Some of the activities involve the
provision of efficient quality of goods at suitable prices, involving sustainable production
practices, creating safe and healthy workplace for the employees of the entity, adopting
transparent reporting practice while disclosing information in the financial statements to not
just benefit the shareholders, but also the investors, regulators, and others. Thus, as the
business derives its business resources from the society, it has the duty to pay back equalised
benefits to solve the social problems.

References
Hutchens, G. (2018). Banking royal commission: all you need to know – so far. Retrieved
from: https://www.theguardian.com/australia-news/2018/apr/20/banking-royal-
commission-all-you-need-to-know-so-far
Shaw, W., Barry, V., Issa, T., Catley, B. & Muntean, D. (2016). Moral Issues in Business.
3rd Asia-Pacific ed., Cengage Learning. Melbourne, Australia