Business ethics is a term explaining the moral maxims that guide businesses in the environment they operate in (Institute of Business Ethics 2013). In the operations of companies, business ethics may also be defined as set of moral values governing the behaviour of the organization in relation to what is right and wrong. Good ethics should be a part of business operation (Velentzas & Broni 2010). It is through effective business ethics that a company can achieve the set standards within the relevant means. For the success of the organization, the organization should attach significance to the ethical values in order to achieve its objectives. Some companies have failed to integrate business ethics as they and consider that they are losing much while adhering to business ethics. Which business would make more, the one that adheres to business ethics or the one that fails to follow the guidelines of business ethics?
In the UK, some companies have claimed to achieve more despite not following business ethics. They have engaged in unethical practices that have benefited them. One of the such practices is tax avoidance. The companies distorted their financial accounts in order to evade tax, which led to increased revenues (Institute of Business Ethics 2013). Some multinational companies in the UK have identified some loopholes where they could evade taxes in order to retain more revenues. As a result,these organizations failed to comply with the procedures of the law and pay the accurate amount of tax to the government (Institute of Business Ethics 2013). In addition, there are cases where individuals have been using the organization’s resources for their personal benefit. This is unethical, since the organization has to account for every resource.
Should businesses in the UK be concerned with business ethics? Despite the considerations for moral values in business, there has been an opinion that business ethics should not be a concern for the companies. There has been a proposition that a company should aim at securing the best return from any given investment. There is also an opinion that business that aims at promoting ethical values as well as profitable gain would probably fail economically. As a result, the whole community would suffer, while other forces like the government would benefit (Malachowski 2001).
Another example of unethical behaviour is the use of price-fixing. It is an irregular arrangement of the companies to set their prices at a higher inflated level. The firms collude and agree to charge higher prices for their products. As a result, the companies stand to benefit as the consumers lack the option but to consume products at a set price (Malachowski 2001). The members of the staff may also agree to raise the price to the average level, which is illegal. Increased prices mean increased revenues for the business. Firms with higher prices charged for their products have an added advantage of increasing their revenues as compared to those that comply with the market laws of pricing (Malachowski 2001).
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The result of the firm’s decision not to comply with ethical behaviour has often an adverse effect for the business, where it is subjected to an unaffordable cost. In the short run, the business may survive, while the effect may be adverse in the long-run. The tension created for the general public increases during the demands for corporate social responsibility. Since the organization is not willing to comply with business ethics, it may be at risk of closure if the relevant authorities identify that the organization does not comply with the set procedures.
Why would the firms engage in unethical practices? In the UK and other countries, companies have failed to recognize that lack of business ethics contributes to failure of the business in the long run. The short-term effects of unethical behaviours satisfy the current demand while negating long-term effects (Velentzas & Broni 2010). The manipulations with the current market through false contracts and fictitious accounts as well as other unwarranted procedures leads to failure of the business in the long run. The businesses or the organizations are being prosecuted in case there is an investigation of their actions. As a result, the organization will eventually pay for the loss occurred and the failure to comply with the law.
Unethical business practices may benefit the firm in the short run, but in the end, the unethical business will suffer. In cases where firms fail to honour their ethical obligations, they have significantly gained in the short run. However, in the long run, the firms face the risk of business closure if the law takes its course. Doing what is right does not do any harm for the business. Complying with the law and practicing affordable business ethics leads to a long-term gain, since the business is not at risk of facing sanctions or threats of closure due to failure in its obligations. The practice of business ethics is not a punishment, and the firms that fail to comply with it should understand that business ethics is for their own good.
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