Introduction
The word business ethics means the capability of reflecting values and decisions affecting the daily operation of the business. Many companies try as much as possible to retain their markets while the new ones keep on tightens the race, the issue of business ethics dominates the agenda of many companies which results in spending an enormous amount of capital on social responsibility. Companies use billions of dollars on impressionable works, which is everything ranging from diversity protection, innovating eco-friendly know-how and then directing those efforts to the community as an ethical obligation. (Remi and June, pg R1)
It is therefore known that the ethical credentials of any company need to be protected and this makes many companies assume that consumers will have to pay for quality products made with advanced ethical standards. However, the majority of the companies sink in without testing that theory or various other fundamental questions like, will the buyers in reality reward applied corporate performance by paying extra for products, and on the other hand will they discipline irresponsible actions by paying less? If yes, then by how much? And by how far does a company actually require to go to win the populace over and finally what is the business ethical stand?
Factual and Ethical Issues
To find out the answers to the above questions the following experiment was carried to find out how much extra will the public pay for an ethically produced commodity? (Remi and June, pg R1) And to a large extent how much lesser amount are they ready to spend on unethical products? For our benefit, “ethically produced” commodities are those manufactured under the following three circumstances. First, when the corporation is considered to encompass progressive stakeholder dealings, such as a dedication to diversity protection and customer protection. The second is that the company has to comply with the global environmental measure standards such as the use of eco-friendly know-how. And lastly, the company must respect human rights and abolish any possible form of inhuman labor.
To find out this, an unsystematic group of 98 grown-up coffee drinkers were put together and asked how much they were willing to pay when given a pound of beans from an unknown company. (Remi and June, pg R1)The trade name that does not exist in North America was used, so not any of the participants could recognize it.
However, before the answers, the whole group was asked to read a number of information concerning the company’s manufacturing standards. One of the groups got encouraging ethical information, while the other group got negative ethical information; the first group got exact results same as what the shoppers would normally know. After finishing reading and interpreting about the corporation plus its coffee, the participants said that the price value for the 12-point scale ranges from $6 to $16. The average cost for the ethical group ($10.71 for each pound) was considerably higher compared to the control group ($9.31) or that of the unethical group ($6.89).In the meantime, as indicated by the numbers, (Remi and June, pg R1), it shows that unethical groups intended to try and pay considerably less for the manufactured goods than their counterpart control group. In a real sense, the unethical crowd punished the coffee company’s awful performance compared to the ethical group which appreciated its own good conduct. The unethical group’s average cost was $3.42 lower than the control group’s, whereas the ethical group’s average cost was $2.40 higher. thus, harmful information had just about two times the impact of helpful information on the participants’ compliance to pay.
This informs the companies to put more effort and concentration towards ethical production, and support that performance which seems to be a worthy investment. In another language, if you do something socially accountable, and advertise that truth, you may be capable of charging relatively higher for your products. (David 23-39) In addition, it seems to appear that people will tend to sideline products that are unethically produced. Although customers may still pay for your products, but only if there is a considerable discount.
Other Unreported Ethical Issues
Some of the ethical issues which seem not to be reported but apply to the situation above in some way are the general norms for ethical acts and the particular policies and measures that a company adopts as values, these are important areas where ethics cannot be neglected. As a business proprietor, you must set forward a model to be followed by your employees as a reminder of these ethical boundaries. To every business owner, the issue of discretionary or optional and non-discretionary must be put into consideration. (David 23-39) Discretionary areas of a company are those moments when you the business owner and your workers have space to maneuver, cooperate, bargain, and seal deals within well-known borders. The margins define non-discretionary areas of a company which entails the topics, rules or other regulation that requires a solitary stand. Compromise is not tolerated at this stage.
Safety is considered to be a non-discretionary area that is instantly identified. There are particular security measures that are required to be followed or else there will be some threat to workers. Though, there are some instances where your staff may not have a pretty clear understanding of areas that seems to be ethically correct. For you as a business owner and your workers need to understand and distinguish what measures fall into which of these two areas, (Sandra 45-67) is discretionary and non-discretionary. Frequently different institutions and businesses give diverse guidelines on an operational level. All these differences might be due to the tasks that the workforce has in executing their duties. Or, the job’s responsibility authorizes only a specific procedure.
Conclusion
In summary, the value of ethics in business is very important because it simply dictates and shapes the market taste, the survival, and the progress of any given company. When these ethics are totally left out, the company’s image and performance start to dwindle towards failure. On a daily basis, we see news reporting how different people keep on making wrong ethical choices that cause tragedy in a company. One choice may impact very many people. To avoid making this kind of miscalculated decision that punishes both the business and the clients, it is better to inquire for consent before you act. (Sandra 45-67)Everybody is expected to persistently do what’s correct and ethical at work. Every time you are hesitant if action is suitable or not, inquire from a proper authority such as your superior, mentor, or the owner (when working at the tiny company),
It is clear that once companies climb to a certain ethical doorsill, consumers tend to reward through paying higher prices. Any possible ethical acts beyond strengthens the company’s image, not necessarily making people pay more. The lessons learned are obvious. Companies ought to subdivide their marketplace and make a specific endeavor to arrive out to customers with high ethical principles since those are the consumers who can deliver the highest possible profits on ethically manufactured goods.
References
David E. Schnedler, Use Strategic Market Models to Predict Customer Behavior, 132(1996)23-39, Web.
Remi Trudel and June Corte, Corporate Reputation, Does Being Ethical Pay? 2009, page R1, Web.
Sandra Vandermerwem, Achieving Deep Customer Focus, (2004),45-67. Web.
Know What Cannot Be Compromised, (2009) A4, Web.
When in Doubt about Ethics Questions – ASK, (2009) Web.