How Ethics Influence Organizational Success

Business Ethics

Evolution Of Business Ethics

The success of any organization largely relies on the adoption of strategies that ensure conformity to the stated organizational and legal requirements. The adopted strategies should also focus on promoting the realization of the mission and vision of the organization. A significant proportion of organizational decisions often aim at ensuring enhanced production, competitiveness, and heightened visibility of the organization. It is beyond doubt that business ventures of all the organizations globally aim at allowing the organizations to realize profits, improve their performance, and achieve their stated objectives. However, as organizations strive to achieve the above, they must consider the adoption of actions that uphold their social responsibility to their stakeholders such as the customers, employees, and lenders, as well as, the environment. For organizations to be act in ways considered social responsible, they should apply business ethics, as they determine the constituents of their right or wrongdoing (Paliwal, 2006). Therefore, this essay will focus on summarizing the evolution of business ethics over the past, changes that caused the focus of the business ethics. The paper also focuses ways in which the changes have affected the business practice and provide a comparative analysis of my personal values of the evolution of business ethics over time.

Historical development of business ethics

The historical origin of the business ethics dates back to the 18th century when organizations started focusing on the need of social responsibility and protection of social, environmental, and human rights. Despite its 18th-century origin, it is recognizable that business ethics has existed as human beings have due to their similarities with human values and norms. Historical analysis shows that the Aristotle philosophies practiced business ethics by ensuring the protection of the stakeholders involved in business-related transactions by avoiding exploitation of other individuals in the society. Similarly, businesses in the 18th century were led by the principle of conducting transactions in a manner considered fair and just to the parties involved. The father of economics, Adam Smith, supported Aristotle's principles of business ethics by strengthening the need for the recognition of the need for the adoption of strategies that do well to the society.

Adam developed basic psychological motives that link human behavior to good deeds in the society. Among them, include reason, prudence, sentiments, and prosperity. The psychological motives formed the business ethics that regulated the behaviors of businesses during this time. Over time, the motives have evolved under various influences, creating a new meaning of business ethics applied in the current business environment. Cumulatively, the motives changed the nature in which businesses ensured their social responsibility. For instance, organizations have to purchase raw materials from their consumers and sell the same to the customers to make a profit. However, the nature of their business undertaking is under constant influence of factors that hold them responsible for their actions and decisions, thereby, social responsibility (Snoeyenbos, Almeder, & Humber, 2001).

Changes that led to organizations focusing on business ethics

There has been an increase in the need for the adoption of business ethics to ensure social responsibility of the organizations. The increased demands resulted in the creation of departments within organizations focusing on business ethics. The action is because of the realization that organizations that perform in accordance with the stated business ethics report significant improvement in their productivity and customer relations, thereby, their competitiveness in the current global markets. Similarly, organizations have placed significant emphasis on business ethics since they are easy and cheap to adhere to them than ignoring them. Adoption of the business ethics results in a reduction in the stress levels associated with the management of the employees and solving of organizational issues of human nature.

In addition, significant analysis reveals that the adoption of business ethics results in the heightening of the business reputation. As such, customers like being associated with organizations that act in accordance with the stated ethical requirements and social responsible, therefore, organizational performance. Moreover, the constantly changing needs of the consumers also contributed to the adoption of business ethics by organizations. Most customers feel more secure when they transact with organizations that are socially responsible as compared to those that are not (Moon, 2001).

How the changes affect businesses

It is beyond doubt that the adoption of the above changes affects the performance of the businesses significantly. While most consider the adoption of business ethics a tedious process for an organization, evidence shows it to have more benefits than seems to the eye. For instance, the above changes it reduces and prevents the incidences of a business engaging in legal issues due to its social irresponsibility. Such provides the business with opportunities to focus their resources on issues that will affect their performance and competitiveness in the marketplace. Adopting the changes influence the performance of an organization by heightening its reputation and visibility in the marketplace. Organizations that enjoy such benefits report an increase in their performance and consumer satisfaction (Paliwal, 2006).