It is the determination of what is right and proper and principles which govern business activities
While conducting business, the enterprise should guard itself from potentially controversial issues such as Aversion from corporate social responsibility Bribery Corporate Governance Discrimination Exploitation by insider trading Fiduciary responsibilities
Understanding the aspirations of the society
Entrepreneurs can not survive and grow without fulfilling the ethical responsibilities of society. Explain Ethics is the knowledge of what is wrong and what is right. business ethics are often guided by law. And it provides basic framework that a business may choose to follow in order to gain public acceptance.
An entrepreneur has to follow his ethics to make sure the proper usage of human resources, country’s natural resources, serve the society and the proper development of the country. It includes Giving proper wages to the workers Prohibiting child labour
Not polluting the environment with harmful industrial smoke and wastage Ensuring proper utilisation of natural resources. There are many responsibilites and duties of a person towards the society and towards the nation. An entrepreneur as a part of the society and nation must follow ethical standards and if the enterprise abide the social and ethical responsibility then his business will flourish
Reputation in the society – the reputation of the company would be badly affected and the people would not like the company and who does not serve the society. Employees may leave – if the firm does not provide actual wages to the workers, the employees may strike or may leave will leads to loss of production
Product dissatisfaction – if the correct amount of quantity or quality of the product is not provided, the interest of the people will move to the substitute goods. Govt can shut down - if the firm does not follow its ethical responsibility the govt has the power to seal and shut down, they can even arrest and charge penalties for not following the laws.
Support the fact that the entrepreneurs can be successful only by following the social ethical standards. While conducting business, the enterprise should guard itself from potentially controversial issues such as Aversion from corporate social responsibility Bribery Corporate Governance Discrimination Exploitation by insider trading Fiduciary responsibilities The study of proper business policies and practices related to the above controversial issues is know as ‘Business ethics’. Business ethics are often guided by law. Sometimes they provide the basic framework that business choose in order to gain public acceptance. The entrepreneur, while doing the business, interact with the social environment. The entrepreneur’s success purely depends on how the external environment perceives his idea. Any sort of non-adherence to business ethics is likely to put them on the verge of fatality. The should adopt what is termed as ‘Social Entrepreneurship’, ‘Corporate social responsibility’, ‘Social corporate entrepreneurship’. Focusing completely on the business problems is likely to overlook ethical problems. So, they should be cautious. Non-adherence to business ethics has crashed the business giants like Enron, WorldCom, Anderson etc. So, it is essential for the entrepreneur to adhere to ‘Business ethics’ for the success of the enterprise. Once the business is successful, few of the ethical standards that help the entrepreneur to retain their success are Appropriate measures to maintain quality and quantity standards Bearing the environmental responsibilities Conforming to the labour laws. Discouraging the child labour Effecacous usage of the natural resources