Ans. Business Ethics and Corporate Excellence : Business ethics and corporate excellence are two significant facto-s that impact a company and its operations. Business ethics represent the values, principles or characteristics a company follows when conducting business in the economy. Corporate governance is the internal framework a company designs and implements to govern and protect the wealth and well-being ofthe stakeholders who have invested their funds in the company.
The relationship between business ethics and corporate governance comes from an organisation’s owner or executive managers, who create the governance and decide which ethical principles their employees will follow in running their business activities.
Business Ethics Typically follow a Normative Theory: This theory states that individuals and firms will follow tra1 principles that are commonly found in society. Hence, terthed as normative, or standard, ethics. Three normative ethic theories include stockholder, stakeholder and social contract theories.. The stockholder ethical theory states that a company should create a relationship between business ethics and corporate governance that focuses on stockholders. Managers will employ strateWes and activities that advance or increase the investments of shareholders.
Under the staehoIder theory of ethics, business ethics and corporate governance focuses on anyone who has a stake in the business. Although wide in range ranging, this connection between business ethics and corporate governance is often stronger, as recent changes to corporate governance ince any individual who is affected by the company. This connection ensures that everyone recei equal or fair treatment when dealing with the business. For example, customers who purchase a fauky product may receive a replacement at no charge and a few extra benefits. This promotes buns ethics throughout the organisation.
A third and find ethical theory is the social contract theory. This theory focuses on companies that improve the e -all welfare of society. Shareholders may be less willing to invest money into a company that ic- s this ethical theory, as shareholders may lose money to causes or other benefits that are outside of the company’s normal operating context. To make investors fully aware of the company’s social contact theory of ethics, business owners, executives and board members will often include this aifurmation in the corporate governance code.
Another reiaticcup between business ethics and corporate governance is a company’s mission statement. The ntcri statement clearly outlines a company’s planned standard of excellence for operating in the bus.ness environment. This mission statement can focus more on a social aspect of the operations rather than a profit motive to repay shareholders. In these types of companies, shareholders will Lzvesz in the business because they believe in the company and desire to see the company succeed n its social mission.
Q.4. Write short notes on:
(1) Code of ethics and business code or ethics. (2011, 3)
(2) Code of conduct (employee ethics).
(3) Code of practice (professional ethics).
Ans. (1) Code of Ethics: A code of business ethics often focuses on social issues. It may set out general principles about an organisation’s beliefs on matters such as mission, quality, privacy or the environment. It may delineate proper procedures to determine whether a violation of the code of ethics has occurred and, if so, what remedies should be taken to rectify. The effectiveness of such code of ethics depends on the extent to which management supports them with sanctions and rewards. Violation of a private organisation’s code of ethics usually can subject the violator to the organisation’s remedies (such as restraint of trade based on moral principles). The code of ethics links to and gives rise to a code of conduct for employees.