Importance_of_Ethics_to_Business_Success

Ethics commonly refers to the rules and principles that define right and wrong conduct. Ethics is defined by Miner (1998) as a philosophy of human conduct; reflecting prevailing values especially those of a moral nature. According to Kiston, (1996) ethics are moral principles that explain what is right or wrong, good or bad and what is appropriate or inappropriate in various setting. Blanchard and Peale (1988) defined ethics as the guiding values, principles and standards that help people determine how things ought to be done. On December 2, 2001, Enron Corporation, once listed as the seventh largest corporation among the Fortune 500, declared bankruptcy. In the months and years that followed, numerous other major corporations were found to have been guilty of similar accounting and financial frauds. Enron’s collapse followed public disclosure of significant debts that had been concealed by complicated and fraudulent accounting practices. Generally Accepted Accounting Principles (GAAP) was sidetracked and it boomeranged. This was made possible with the help of Enron’s accounting and auditing firm, Arthur Andersen, at that time one of the top five international accounting firms. Andersen played both ends of a conflict of interest by earning money both as Enron’s auditor and as consultants in concealing these debts. Another example of a company that became very successful by reason of ethics it emphasized is Boeing. It was established in 1916 and it became very prominent in the business during the Second World War. It is the world’s largest producer of commercial aircraft. William Allen took the reins at the end of the Second World War. He faced a formidable challenge of transforming Boeing from a wartime producer to a peacetime manufacturer. He drew a list of resolutions that reflected his personal values and these formed that basis of a strong ethical standard that took the company from ashes to glory. Some of them are listed below; * Employees must keep temper * Don’t talk too much; let the customer have time to speak * Don’t be afraid to admit that you don’t know * Be just, invite criticism and learn to take it William Allen showed how personal standard can be transferred into business to make it successful. He did not do the conventional thing that most C.E.O/Board of directors do i.e. charting an entirely new and different standard to guide conduct. HP (Hewlett Packard) is a leading brand in the computer manufacturing business. Over time, the company has faced stiff competition from competitors in the business. Staying on top has not been easy because competitors also strive daily to beat them by engaging strategies whether ethical or unethical.HP has been able to stay ahead of the pack by reason of certain ethical practices and standard employed. Some of these ethics are listed below; * Suppliers have a code of conduct that governs the distribution of computers and accessories. e.g. laws protecting the environment worker health and safety and labour. * Workers are valued, respected and the top management staff has confidence in them. * Workers are free to speak about new ideas and grievances * Workers address themselves on a first name basis which destroys the psychological barrier of superiority * Open door policy which empowers any worker to walk into a superior’s office and report any misdeed or contribution. * Emphasis is placed on team work to enhance relationships among workers. * Decisions are arrived at through consensus; every worker’s idea is weighed before a conclusion is arrived at. * Parking space is largely unallocated * Office sizes are predominantly the same size. Job security is not an offer on the table, rather, what employees have is employment security.i.e when an employees’ job disappears by reason of technology or compulsion, the worker is trained to take over another job within the organization. The crisis that rocked the banking industry in Nigeria was as a result of unethical and double standard employed by top management within the banks. Adequate collaterals were not tied down for loans collected. Other banks gave loans to friends and family found it difficult to recover them. In conclusion, all the above examples have in one way or the other been affected by their ethics. Some had positive effect, while some had negative effect. What is most important here is that business success is a function of the ethics adopted by the company/business. Some can be universal i.e. standard way of doing things worldwide while some can be within a business. Employee conduct is guided, social responsibility is defined and interaction with the environment is defined. A careful blend of them all would be a springboard for productivity and ultimately success. REFERENCE Fritzsche D.J. (2005) Business Ethics; A global and Managerial Perspective, McGraw-Hill/Irwin Inc. Laurie J.M. (2007) Management and Organizational Behaviour,Prentice-Hall,Inc Miner,J.B.(1988)Organizational Behaviour:Performance and Productivity, Random house business division Robbins,S.P. and Coulter,M.(1999)Management,Prentice-Hall,Inc.