[Answered] “Economics concerned solely with wealth and profits has led to un-ethical practices and climate change.” In light of this statement discuss the need of adopting ethical considerations into business behaviour.

Importance of ethics in the business world is superlative and global. New trends and Issues arise on a daily basis which may create an important burden to organisations and end consumers. Nowadays, the need for proper ethical behaviour within organisations has become crucial. The public scandals of corporate and misleading practices, have affected the public perception of many organizations. The recent expansion of global business and fall of trade barriers worldwide have further underlined the interest in the topics of ethical behaviour and social responsibility in business and economics. Unethical business practices are detrimental to both human rights and environmental conservation.

Impact of sole focus on wealth and profits in business:

1. Unethical practices leading to human rights issues: Mostly corporate undertaking work under the rules of corporate governance to enhance its profits totally sidelines the business ethics which are must for the society in which an organisation prevails. This lead to unethical practices like forced land acquisition, corruption in administration leading to poor human rights.
2. Climate Change:Clear violation of environmental rules, norms and laws has led to climate change issue.E.g. The ignorance of Volkswagen regarding the environmental factors while launching the engines emitting enhanced level of NOx just for their profit goals sets an example of poor business ethics.
3. Decrease in public trust and confidence: Due to unethical business practices, public confidence in a corporation’s ability to self-govern is low. A number of scandals had shaken the landscape and rattled investor confidence. Recent Ponzi schemes and company scandals in the business industry has developed a reputation for its lack of ethics.
4. Inequalities:Focus on profit of oneself not only snatch others from incomes but also widens gap between rich and poor. Often labour laws are ignored, employees are under-paid, chairmen are paid extravagantly, leading to overall inequality as was shown in Oxfam report, indicating 50% income is in hands of rich 2-3% people.

Importance of Business Ethics:

1. Corresponds to Basic Human Needs: The basic need of every human being is that they want to be a part of the organisation which they can respect and be proud of, because they perceive it to be ethical. The basic needs of the employees as well as the managers compel the organizations to be ethically oriented.
2. Credibility in the Public: Ethical values of an organisation create credibility in the public eye. People will like to buy the product of a company if they believe that the company is honest and is offering value for money.
3. Credibility with the Employees: When employees are convinced of the ethical values of the organisation they are working for, they hold the organisation in high esteem. It creates common goals, values and language. Perceived social uprightness and moral values can win the employees more than any other incentive plans.
4. Better Decision Making: Respect for ethics will force a management to take various economic, social and ethical aspects into consideration while taking the decisions. Decision making will be better if the decisions are in the interest of the public, employees and company’s own long term good.
5. Profitability:Being ethical does not mean not making any profits. Every organisation has a responsibility towards itself also i.e., to earn profits. Ethical companies are bound to be successful and more profitable in the long run though in the short run they can lose money.
6. Protection of Society: Ethics can protect the society in a better way than even the legal system of the country. Where law fails, ethics always succeed. The government cannot regulate all the activities that are harmful to the society.

Business ethics should take into consideration the following factors:

1. A business should aim to have fair dealing with everyone dealing with it.
2. Ethics should be fixed for everyone working in the organisation at any level and their implementation should be linked with reward- punishment system.
3. Any violation of ethics should be detected at the earliest and remedial measures taken immediately.
4. Business ethics should be based on broad guidelines of what should be done and what should be avoided.
5. The ethics should be based on the perception of what is right.

Thus each and every corporate organisation should work not just for the profit sake but for the sake of society too through various kind of initiatives under corporate social responsibility. Primary objective of corporations is to expand the profits of their shareholders But they should maintain minimum values and norms of the society in which they operate. Sometimes desire for more profit, compel them to take decision which may prove harmful to society in which they are operating.