Management Ethics: Sources and Significance - Principle of Management

Principle of Management

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Management Ethics: Sources and Significance - Principle of Management

Management Ethics: Sources and Significance

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.

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