Ethical Issues in Small Business
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Ethical issues in the business refer to the conditions that necessitate an entity or an individual to make a decision that ought to be described as morally correct or incorrect. In any business organization, the employees and employers follow the rules of personal ethics that are either acquired in learning institutions or internalized as subjective morals. Moreover, the corporate code of comportment in any association guides the personnel in the manner desired by the board of directors. Additionally, the ethical code of conduct contributes to increasing the output of the business firm and improves its reputation. Ethical guidelines in any kind of corporate operation help the person or organization in evaluating the decision as a proper and worth undertaking or otherwise.
The following sections venture into the discussion of major ethical issues experienced in the course of business management.
Within the small or large business firms, ethical challenges surface due to the employee’s code of conduct. The employee behavior in an organization may include improper management strategies and approaches, misuse of power by the heads, harassing the junior workers, or being biased in promotions. The abovementioned activities are examples of unethical practices that can be avoided by introducing a legal action against the suspected workers (DeGeorge, 2005). In small business organizations, ethical matters require immediate action by the owner through enforcing a set of rules and regulations that govern the activities of workers at all ranks.
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The working environment is a vital factor to be considered by the employer. The hiring side should be mindful of the well-being of workers, the job setting, as well as the fair reward for the time and effort the human resources dedicated to the organization. In addition to providing a supportive environment, the institution should clearly define the kind of task the employees are required to complete and follow up. Moreover, the employers that expose hired personnel to poor working situations face lawful penalties that can cause litigation.
An employer who fails to pay the worker can significantly decrease the goodwill and affect the reputation. Ethical issues like the rules of integrity, fairness, trustworthiness, and private information pose a challenge for a business to control and address. In a business setting, any managerial decision ought to be well thought about in order to avoid possible ethical considerations (DeGeorge, 2005). The ethical good standing of the firm does not correlate with the profitability or regality on what is correct or incorrect, but rather is a universal idea of morality.
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Buyers and Sellers Relation
The relationship between the sellers and buyers in the market presents a possible ethical pitfall, particularly in large organizations. For example, a supplier has the obligation to sell commodities of high quality and ordered quantity. The goods should meet the standard requirements and be true to the description of items or services. Many business owners knowingly steal from customers by giving out fewer money balances, especially if they deal with aged consumers. The unethical practices and intentional financial misconduct should have actions taken on good judgments to avoid ethical issues occurrence. As a result of the recent growth of trade ethics value, the business sector has been affected by the absence of reliable direction.
Consequently, the sector of business ethics bases on reasons, logic, community values, and legal guidelines. The ethical issues in trade are connected to the regulation on the institutional level, the rules of administration, and the consumer protection laws. According to market analysts, there are a vast number of matters relating to business ethics. In a consumer relationship, ethical issues differ depending on the kind of business, the consumers involved, the size of the business, and the type of offered products. In fact, some corporations have a larger list of potential ethical issues based on their sensitive business nature and peculiarities of consumer communication.
Every business has peculiar ethical matters although a basic moral code of conduct applies to almost all businesses. In small organizations, the owners of the business normally act as the ethical experts that establish and control the ethical conduct of the firm. Thus, they solely take the responsibility to guarantee that the information about rules and regulations given to the employees is clear and precise. Moreover, ethical issues in small business arise from dismissal, employment, and responsibilities of the workers. Therefore, the conflict of interest is likely to result in ethical issues for the small entities’ owners. The above cases are true to the businesses run by a family because personal vested interest in the business operations is a clause of moral ground.
Another element of ethics in the small businesses is fair-mindedness in trade transactions, which means to be focused on forming beneficial circumstances for the activities of individual, vested groups, or partnering organizations. Trustworthiness relates to business operations for the purposes of earning the profit. In case the partners have faith in the firm’s reputation, the likelihood of entering into mutually beneficial activities is high. A seller attracts customers to buy more products and services, the sales volume increases to earn more profit.
The ethical element in the transaction is to correctly motivate the workers to have self-desired altitude of staying with your business. Small businesses face similar ethical issues as large corporations do, but they have to manage challenges faster with a smaller number of people. Therefore, ethics is a transcending factor in the human resource of small organizations.
Accounting ethics is also a vital component of business reporting, which is a significant factor in the communication of financial information to the stakeholders. It also helps to avoid the manipulation of monetary figures with the aim of attaining unrealistic figures to lure in investors. Integrity and trust are the vital factors that secure the long-term solvency of every business entity. All groups of stakeholders, including consumers, suppliers, investors, and the public tend to prefer a business that ensures proper cooperation and solid ethical trade practices.
Additionally, diversity issues are crucial ethical contributors to the workforce relationship. The human resource attitudes and practices contribute to the positive image of the company, its value among the professionals, and high moral standing. Another important issue is the use of social media while at work, which has greatly reduced the employees’ productivity. The problem is two-fold. On the one hand, intruding into social media of employees can be considered a violation of private property. On the other hand, employers have been forced to set policies that pertain to the use of websites in the working hours (Choi & Berger, 2010). The challenge is to set a line between privacy protection and harassment of employees. Therefore, the established code of conduct within the organization should be signed and approved by every employee in order to avoid potential conflicts and disagreements.
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The Merits and Demerits of Ethical Issues in Business
The advantages of introducing business ethics in the firms’ operations consist of the following. Firstly, it creates fair competition amongst traders. Secondly, ethical firms have a better reputation and higher income. Thirdly, businesses increase the market value due to ethics that boost the morale of the stakeholders as well as trust in the relationship.
On the other hand, the disadvantages of business ethics are as follows. The appearance of ethical issues decreases the chances of the business to make a profit and create long-term solvency in the industry. Organizations may change from one direction of the business and turn to the other field due to ethical issues encountered before. Also, instead of minimizing the operation cost, the business can increase expenses on solving ethical issues and related litigation.
In conclusion, ethical issues in business can be of great impact on the activities, particularly if only the worthy deeds are practiced (Velasquez, 2011). It is important to understand the ethics and implement the code of conduct in the businesses. Management of any business could lead by example through acting as the best role model and passing on the experience to their hardworking manager. The career growth and business success can only be attained if a person has ethical morals and decides to make correct and accurate resolutions.
An ethical way of administration method leads to honest leadership, effective conduct, excellent judgment, as well as drawing proper strategies that help in gaining more profit in any business operation. Moral supervision needs the leaders to hold the ethical ground and be thoughtful to all the participants of the business organization. Ethical code of conduct and value of the moral obligations should help the management in operating the organization. The results can be attained when all stakeholders join in practicing ethical norms that create a sustainable environment in their business organizations.