Business Objectives, Ethics and Reputation Essay
Business objectives are the aims under which the business is established and operates. All businesses are driven by the desire to make maximum profit and avoid loss at all times. This is, however, not the sole objective of a business.
A business that hunts after profits while ignoring other aspects of the society can, therefore, not be successful in the long run. Business objectives can be classified under three levels: Economic objectives, Social objectives and Human objectives (Hollet, 2006).
Ethics plays an important role in achieving business objectives and for the long-term success and positive reputation of the business (Ferrell, Fraedrich & Ferrell, 2009). The corporation’s reputation is a vital factor to the corporate, economic health.
This paper examines business objectives, the role of ethics in achieving the business objectives and the importance of a corporation’s reputation to its corporate economic health.
Objectives of Business
The primary objective of any business is to succeed in its economic activities. The economic success of a business is achieved through earning profit, creating new markets and innovation. For a business to remain profitable its income must be more than its expenditure and as such, the business sells its goods or services at a profit.
A business sells its products at a mark up since profits not only keep the business operation but they also facility its growth and expansion. Profits also cover the risks involved in business activities to cushion the business against potential losses (Hollet, 2006). In connection to this, a business works towards getting new markets to maximize their profits.
The social objective of many businesses is continuously be viewed as a positive force by the community. A business achieves this, first by producing goods of standard quality. A business also strives to avoid antisocial practices such as smuggling, black marketing, hoarding and overcharging customers to earn unreasonable profits.
It strives to improve the living standards of its societal members by providing a source of employment opportunity (Hollet, 2006). Businesses also strive to operate within the legal framework of their host countries by timely paying its dues and taxes to the government and adopting a positive approach towards government policies. Businesses also aim at maximizing the use of national resources to the interest of the country, avoiding wastage to lower prices.
The human objectives of business are important for the prosperity and profit making of any business. Businesses aim at giving their employees fair remunerations for services provided and also creating conducive environment for the creation and advancement of skills and abilities.
A business should look beyond the material benefits to its employees and strategize on how to reduce unpleasant work and plans for employees’ job satisfaction and participation in the affairs that directly affect them. Hollet (2006) asserts that businesses also aim at “promoting the achievement of national goals like social justice, increasing exports to build foreign exchange reserves and researching on cheaper and better substitutes for imports”.
Role of Ethics in Achieving Business Objectives
The economical objectives of business are best met by observing ethics during decision-making process. Breaches of ethical expectations increase the economical burden of a business through higher costs for litigation and out-of-court settlements.
Businesses with a comprehensive code of ethics or an ethical program in place avoid the costly trouble associated with issues of hostile work environment and discrimination (Ferrell, Fraedrich & Ferrell, 2009). Engaging in unethical practices might attract legal confrontations and reputational damage to a business, resulting into fines and market rejection. These directly translate to lose in the business.
Business’ misdeeds can deprive a company of potential future partners and the industry’s top talents. Experienced, creative skilled, and productive job applicants will likely put their resumes elsewhere. This will block the business’ objective towards innovation.
Ethical practices in a business lead to employee loyalty; increasing productivity and efficiency over time. Ingram (2011) notes that this can help a business to keep training and recruiting costs under control and gain marketing advantage from loyal employees.
Corporation’s reputation is important to corporate, economic health because it helps in improving the corporation’s public profile. If a corporation is involved in socially responsible organizations, their brands are associated with public spirited activities and movements.
When a business spends part of its profits to support ethical activities such as environmental initiatives and poverty eradication, they balance their roles as profit-making entities and shareholder-owned organizations with activities aimed at public giving. This creates a positive impression with the public and government, increasing the market and the growth opportunity for such organizations (Ferrell, Fraedrich & Ferrell, 2009).
Consistent, ethical decision making is important for the long-term success of any business and achievement of its objectives. As much as ethical decision making may sometimes result to weaker short-term financial impacts than those of shadier companies, it eventually results to long-term positive reputation in the market.
Universal ethical standards set throughout the organization helps in securing a loyal customer base. Breaches of ethics can land an organization into serious trouble with consumers, the government or other companies. Ethics encompasses a large and a significant portion of business activities today. A formal code of ethics observed by business employees can help in faster and easier decision making processes at all organizational levels.
Ferrell, O C. Fraedrich, J. & Ferrell, L. (2009), Business Ethics: Ethical Decision Making and Cases. Mexico: Cengage Learning.
Hollet, V. (2006), Business Objectives Oxford London: University Press.
Ingram, D. (2011) Demand Media: How to Make Ethical Decisions. Retrieved from https://smallbusiness.chron.com/make-ethical-business-decisions-445.html
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