Importance of Business Ethics in an Organization

Every company has their own moral principles and guidelines. Introducing and following new business ethics has benefits like keeping and attracting the employees, customers and investors in an organization.

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IMPORTANCE OF BUSINESS ETHICS IN AN ORGANIZATION
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1IMPORTANCE OF BUSINESS ETHICS IN AN ORGANIZATION
Business Ethics in a local or multinational organization
Every company has their own moral principles and guidelines. Introducing and following
new business ethics has benefits like keeping and attracting the employees, customers and
investors in an organization. For an example if a an energy drink manufacturing company like
Red Bull proclaims on the labels and advertisements that it does not add any preservatives to the
drinks. Then it should adhere to the claims it has made. However if the company is seen to be
disobeying the claims and selling its products by adding preservatives, it would be considered as
unethical to the business.
This will thus deteriorate the brand and eventually the customers will be losing the trust
over the company. It will also damage the reputations of the company. Therefore, business ethics
is very much important for a local as well as a multinational company. The Deontology class of
business ethical theories states that people should adhere to the obligations and the duties, which
are engaged in the decision-making ethics of an organization (Cowton, Dempse and Sorel 2019).

2IMPORTANCE OF BUSINESS ETHICS IN AN ORGANIZATION
Ethical issues often arise in business settings whether through business transactions or
forming new business relationships. Some ethical issues, which are in particular concern in
today’s business market, are honesty, integrity, professional behaviors, frauds and environmental
issues. In order to adapt the current issues Deontological ethics serves as a framework which
consists of the predefined sets of rules and policies for the proper functioning of the system in
the environment.
In multinational companies which includes several programs and departments. A
company should develop an overall corporate code of ethics as well as separate code to guide
each of the programs proposed in each departments. The codes should not be developed out of
the Human Resources or the Legal Departments. Therefore, the entire staff must look carefully

3IMPORTANCE OF BUSINESS ETHICS IN AN ORGANIZATION
into the ethics programs being driven by top management. The most fundamental and ethical
issues which are faced by a company are integrity and trust (Dierksmeier and Seele 2018).
Pollutions are one of the world’s biggest environmental problems which are faced by a
company in the present scenario. The cross-cultural understanding begins with those who are
responsible for the projects in an organization. The ability to communicate, negotiate and
effectively work with people from various cultures is vital to an multinational company.

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References
Cowton, C., Dempsey, J. and Sorell, T. eds., 2019. Business Ethics After the Global Financial
Crisis: Lessons from the Crash. Routledge.
Dierksmeier, C. and Seele, P., 2018. Cryptocurrencies and business ethics. Journal of Business
Ethics, 152(1), pp.1-14.