Business Ethics

Business Ethics

Introduction

The shareholder places the greatest value on the corporation's ethical responsibility to earn money for its investors. A public limited company cannot survive without shareholders, and they are said to be the owners of the company, though they share less interest manager's other ethical responsibilities. Shareholders play a vital role in the operations, financing, governance and control aspects of a business. They play both direct and indirect roles in a company and are mainly concerned with the profit distribution. The managers determine what the shareholders can expect in terms of dividends, profit and capital growth. In practice, the shareholder legal right of control is limited in scope. They do have the ultimate say but have little control in day to day operations of the company. Looking from the legal perspective, a corporation has an ethical obligation to meet all legal requirements in regards to its shareholders. 

Business ethics are the standards and principles that determine acceptable conduct of its stakeholders in business organizations. The business ethics is a broad concept that not only includes the culture, but the processes and outcomes denoting a way of acting. It is said to be a highly important part of the existence of the business.

Ethical obligations of managers and the shareholder view

Leading a company to success requires the contribution of several factors. Nowadays it has become essential for businesses to follow strict ethical behaviors in the organizations. The increased number of cases of business failures because of fraud, and other malpractices has emerged as a highly significant aspect. Considering all these factors, there is a need to recognize that that a lot of issues should be addressed in term of ethics in organizations.

Several businesses have started to focus on the role of leaders and managers in the failure of ethics in businesses (Day, 2001). Analysts have directly linked the failure of ethics in organizations with the failure of managers to meet their obligations. The culture of the organization and the managerial responsibilities in the organizations are major factors contributing in the creation of ethical work environment. On the other, hand the fact that the ethical issues cannot be completely eradicated from an organization also exists (Young, 2004). The managers have the central role in implementation of ethical decision making in the organizations. The top management is foremost responsible for implementing the ethical behaviors as the lower management influences from people at these levels. Managers are responsible for creating or implementing changes to the ethical conduct of the organization. These changes may be internal or external, including the study of past evaluation of employees and their behavior, new regulatory environments, changing market conditions or public perceptions that require the organization to make adjustments accordingly. If the unethical behaviors persist for a long time and are not eradicated, they do not only remain individual unethical behavior but becomes an organizational problem.

The companies which have shareholders as a part of their organization, has to consider several aspects in making their shareholders ...