Important and lasting beliefs or ideals shared by the members of a culture about what is good or bad and desirable or undesirable. Values have major influence on a person’s behavior and attitude and serve as broad guidelines in all situations. Some common business values are fairness, innovation and community involvement.
Values are enduring, passionate, and distinctive core beliefs and they’re an essential part of developing your strategy. They are based on enduring tenets—guiding principles—to adhere to no matter what mountain you climb. Your core values are part of your strategic foundation. They are the beliefs that guide the conduct, activities and goals of your organization. They establish why you do what you do and what you stand for. Values are deeply held convictions, priorities, and underlying assumptions that influence the attitudes and behaviors of your organization. Strong values account for why some organizations gain a reputation for such strategic traits as leadership, product innovation, and total customer satisfaction. These never change.
An organization’s values can dominate the kind of strategic moves it considers or rejects. When values and beliefs are deeply ingrained and widely shared by directors, managers and staff, they become a way of life within the organization, and they mold organizational strategy.
Ethics in business and management (including strategic management) deals with moral issues (beliefs, norms, values, etc.) arising from activities performed by managers and employees of the corporation.
Business ethics is a term with quite a multifaceted meaning. Most of them however, boil down to the general and the basic conclusion that economics should serve man, not vice versa. So, managers should not be guided in their actions solely by profit or personal gain.
Business ethics is both part of the prescriptive (normative) ethics establishing standards of conduct, recommending certain behaviours, as well as descriptive ethics, describing the moral attitudes and behaviours of entrepreneurs.
Business Ethics and Ethical Business Practices
Business ethics deals with moral issues (beliefs, norms, values, etc.) found in the business. It should be noted that business ethics is a term with quite a multifaceted meaning. A variety of content, which is attributed to business ethics depends on the context of its occurrence. Each approach, however, boils down to the general and the basic conclusion that economics should serve man, not vice versa. Entrepreneurs cannot be guided in their actions solely by profit. Ethics, as having theoretical knowledge of fundamental importance for our actions, it is rational and reasoned knowledge of the values and duties of human action, arising from the fact of being human. Business ethics is concerned of limits to human economic activities.
Ethical issues in Business
Business ethics is both part of the prescriptive (normative) ethics establishing standards of conduct, recommending certain behaviours, as well as descriptive ethics, describing the moral attitudes and behaviours of entrepreneurs. In principle, the practical goal of business ethics is to solve ethics problems in business.
Ethical factor in area of business communication
- Proper marketing techniques, telling truth about products and services,
- Informing customers, employees and partners about company’s mission statement and goals,
- Respecting religious and social values of employees, customers and partners,
- Negligence in informing shareholders about company’s situation, managerial ethics
- Insider trading, hiding information about mergers, acquisitions, investments, etc.
Ethical factors concerning production processes
- Eliminating unsafe working conditions,
- Avoiding processes and technologies that jeopardize the safety of the employees and public,
- Producing product safe for customers,
- Waste product utilization and recycling,
- Profiting from products bad for health (drugs, cigarettes, alcohol) and people (gambling),
Social responsibility is a form of management that considers ethical issues in all aspects of the business. Strategic decisions of a company have both social and economic consequences. Social responsibility of a company is a main element of the strategy formulation process. There is a misconception that corporate social responsibility is less relevant to small businesses; however, there is growing recognition of the importance of social responsibility for smaller firms.
Integrating social responsibility in strategic management requires sound knowledge of the types of social responsibilities a company deals with. Economic responsibilities are the most basic type of social responsibilities. The company is expected to provide goods to the society at reasonable prices, create jobs and pay due taxes.
Legal responsibilities reflect the obligation to comply with the laws that regulate business activities; ethical responsibilities mirror the company’s notion of the right business behavior. Some actions might not be illegal but can be unethical. Making and selling cigarettes is a case in point.
Finally, discretionary responsibilities are those that are voluntarily adopted by the business. For example, companies that adopt the good citizenship approach, actively support charities, public service advertising campaigns and other public interest issues