Why is it that since ages, human beings are able to live with each other peacefully? The main reason why humanity has survived for so long is due to certain rules, values, mores and ethics, which all of us abide by. Thus, ethics and values are the very foundations on which this society is standing. Same is the case in business.In a competitive world of today success is defined by making sales, outperform the competitors and leverage anything and everything to close the deal. Thus it is pertinent to ask how one can stick to the principles of business ethics when it seems more advantageous not to.First we need to understand the scope of business ethics. Very often it is held that business is to bound by any ethics other than abiding by the law as pioneered by Milton Friedman. Proving firms guilty of an act is not easy in most of the cases. This is why the importance of ethics in business is even more important. Ethical act is conscientious voluntary choice beyond normalcy. Business ethics involves playing the game fair and honest. There are rules that govern how we do business so that everyone who plays the game has an equal chance to win.It looks good in books but its practical application is not that easy when we know some play by the rules while some others do not.One must first accept that the fair and honest business practices are the best options simply because they are the right things to do. A time may come in life when these principles may seem redundant. But it should be understood organizations which follow certain business ethics have better chances of survival, compared to the ones whose only goal is to make profits, even if they have to compromise on a lot of things for that. In fact an honestly run business is something that one can put to one’s advantage.Some view ethical issues as simply a costly hindrance while some companies take it as their responsibility as a strategic tactic to gain public support for their presence in global helping them sustain a competitive advantage by using their social contributions to provide a sub conscious level of advertising. Trust is something that most customers pay for. The reason for this is that customers of businesses which follow ethics are loyal and satisfied with the services and product offerings of such businesses. Let us take an example. Suppose, there is an organization named ABC. It greatly believes in the importance of ethics in business. When ABC advertises its products in the market, being an ethical organization, it will be very truthful and honest in its communication with the probable customers. It will tell correctly about the kind of ingredients it has used while manufacturing the product. It will not lie about the benefits or uses of its products. So the customers, who buy its cosmetics, know precisely what they are buying and how useful that product is going to be for them. This way, the product will meet their expectations and thus, satisfy the customers. When customers are satisfied, they will become loyal to the company and come back again for re-purchasing. This will surely increase the profits of the organization.Following unethical business practices may earn dividends in the short term but this strategy will back fire in long term. But an organization, which is well-known for its ethical practices, creates goodwill for itself in the market. Investors or venture capitalists are more willing to put their money in the businesses which they can trust. Shareholders too, remain satisfied with the practices of an ethical business. Thus, it builds long-term relationships. Also, employees too remain loyal to such an organization.An hThus, it is possible to be work ethically in an otherwise unethical business world. You can play fairly and win as long as you are willing to play smarter. Make your strategies in a fair and honest way and take advantage of the opportunities and you will achieve the goal. An honest business model is the most successful business model.
P.S. This article is based on my understanding of this topic through various magazines and articles online as a student of Commerce.