Organisational Behaviour – Business Ethics

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Table of Contents

Introduction
Role of ethics in business
Ethical standards and corporate governance
Benefits of an ethically conducted business
Conclusion
Works Cited

Introduction

Organisational behaviour is an accepted code of conduct adopted in an organisation; it determines relationships among stakeholders and the business (Marks 1). Leaders work-hard to develop a positive organisational behaviour; positive organisational behaviours results in improved business processes and better customer relations.

With globalisation and increase in people’s awareness of their rights, there have been calls to conduct business ethically. Pablo, in the “Journal of Business Ethics applauds ethical behaviours within an organisation; he says defines ethics as a means of conducting business processes in socially, economically, politically and environmentally friendly manner. Ethical behaviour aims at developing good relations between business and its environs.

It involves businesses aligning its internal and external operations/process to meet expectation of the society as it fulfils its objectives and goals. Business ethics is concerned with integrity, honesty and truthfulness in business operations (Pablo 17). This paper looks into how business ethics influences an organisational behaviour.

Role of ethics in business

According to Kam, Hung-Gay and Jot, in an article published in the journal “Journal of Business Ethics”, increase in demands by customers and the society in general to have responsible business behaviour has lead to business management to recognise the need to have a well developed framework which ensures they develop ethical codes to foster responsible behaviour in their employees.

With this in mind, business must aim at developing products that give rise to general good of a large population. They should check their processes for acceptability.

Managers should recognise that customers have rights to high quality goods at an appropriate price and produced in a way that does not harm the environment, all process should be guided by should be guided by fairness and equity, as well as impartiality. To attain these managers should:

Develop and ethical code of conduct which should be followed in their organization
Have a formally recognised code of ethics committees, which are mandated, with the aim of ensuring that ethical practices are upheld.
Train and teach their employees on the need of business ethic.
Align their internal processes to abide to set code of ethics
Ethical codes and standards (Kam, Hung-Gay and Jot 39)

A code of ethics should define, processes in an organisation are structured and their effects on the end customers and stakeholders who utilises a company’s good directly or indirectly it should focus in the following areas:

Product quality; company should aim at producing high quality goods and services; with this they will assure their customer value for money.
Business dealings; Courtesy towards both internal and external customers and suppliers, when making a production, the company should aim at ensuring their processes have minimal damage to the environment and all process are aligned to meet ethical standards met.
Employee compensation; employees should be part of an ethical process. They should not be left when a business is considering an ethical code of conduct. Their issues include good working environments, compensations and respects to their rights. Those employees who have been treated in a respected manner have proved to be more productive.

Ethical standards and corporate governance

According to Kam, Hung-Gay and Jot, in an article published in the journal “Journal of Business Ethics”, corporate governance is the manner in which an organization is planned to have an increasing value to its stakeholders. It is more skewed to attainment of business objectives and satisfaction of all persons affected by a certain decision in business.

This includes the structure of the board (audit, nomination and compensation committees), management/board relationships, carrying out value creating activities, shareholders ‘ rights, record keeping, information disclosures and management compensation and its disclosure. Effective corporate governance should include issues of ethics in their compositions.

The way decisions are made should be from a human point of view and should consider that the business is operating in environments that it affects and is affected by people. Having policies as corporate social responsibilities will ensure that a business develop good relations with its customers and the environment that it is living in (Kam, Hung-Gay and Jot 49).

Ethics, corporate governance and social corporate responsibilities must be upheld to have productive business ethics practices, four tools in improving ethics in a business they are:

Have a good code of conduct that is followed by all levels of employees; managers, board of directors and employees
Undertake regular ethics, social responsibility and corporate governance audits, by having systematic efforts to assess conformity with company ethical, social responsibility and corporate governance codes and policies.
Undertake reviews on the current levels of ethics adopted and improve these levels as required by the prevailing condition.
Fully invest in areas that benefit the society. These include areas of health, education and water projects. They assist in developing a good working environment between a company and the outside world.

Benefits of an ethically conducted business

Kam, Hung-Gay, and Jot concludes their article by summing up business ethics by saying that an ethically conducted business is likely to enjoy some benefits from its efforts. This start internally where employees who are respected by their employer produce more effectively and highly than those who are not respected. An organisation thus gains high efficiency and effectiveness in its processes. From the external angle, the business develops good relations with its customers.

When there are good relations, there is customer loyalty; loyalty of customer is a strong marketing and competitive advantage tool that leads to increased business (Kam, Hung-Gay and Jot 59). According to the consequential theory of business ethics, business decisions should be made considering the consequences that will have on the people affected.

The best decisions are the ones that lead to a general good of a large group of people. Consequently, they are the decisions with have minimal negative impacts on people they are going to affect. Different societies have their own definition of what is ethical. A business should well understand the environment it is operating in to ensure that they do not contradicts factor like culture, religion and other socially accepted mode of conduct.

Conclusion

Organisations which respect ethics in their processes makes decisions that are responsive to social, economic and political needs of the society; ethical behaviour aims at developing good internal and external relations. Theories that define business ethics include Norm theory, utilitarian theory and Consequential theory.

Ethically conducted business benefit an increased competitiveness and customer loyalty. For a business to have ethics in its production, it should start by developing a code of conducted to be adhered by all personnel’s in the organisation, training employees on ethical codes of conducts and reviewing the ethical codes with time.

Works Cited

Kam, Chan, Hung-Gay Fung, and Jot Yau. “Business Ethics Research: A Global Perspective.” Journal of Business Ethics 95.1 (2010): 39-53.Print.

Marks, Robert E. “Organisational Behaviour, Finance, and Economics.” Australian Journal of Management June 2005: 1.Print.

Pablo Rodrigo, et al. “Business Ethics Journal Rankings as Perceived by Business Ethics Scholars.” Journal of Business Ethics 95.2 (2010): 227-237.Print.

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