Management Ethics:

Management ethics is philosophically related to moral conduct, duty, and judgment of our managers. According to Ricky W. Girffen; “Ethics is an individual’s personal belief about whether a behavior, action or decision is right and wrong”.

Sources of Management Ethics:

An organization’s ethics is derived from three principle sources. They are;

• Social Ethics: The values and standard embodies in a society’s laws, customs, practices and norms and values.
• Professional Ethics: The value and standard that groups of managers and workers use to decide, how to behave appropriately.
• Individual Ethics: Personal values and standards that results from the influence of family, peers, upbringing and involvement in significant social institution.

Significance of management Ethics:

The organization is a social system. Any unethical activities may harm all the stakeholders of an organization. Hence, the management of a business organization must be aware of the significance of maintaining an ethical standards for its existence and sustained growth.

• Ethical behavior enhances the reputations and goodwill of a business. The organization gains reputation and goodwill when it behaves ethically. Reputation is a valuable asset for a business firm.
• An organization violating ethical standards faces criticisms and hostility. Such violations also result in penalty or social boycott of its products.
• Ethical standards of business helps in economic and social development in the society in which it operates through effective and prudent use of resources, free and fair competition. A climate of fairness develops, not only in the business, but also in other organizations associated with it.
• By following ethical standards, a business can keep its promises and transparency. It gains credibility and stability.
• By acting ethically, a business organization can protect the interest of the wider society.
• A climate of justice, freedom, equity and equality is created in an organization through ethical practices.