What is ethical policy?

WHAT IS ETHICAL POLICY?

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In recent past so many successful business failed, many profitably running businesses suffered from a downfall and it is said that some effective corporate receives a great fall in their profits and popularity. One of the main reasons behind these surprising happening was lack of business ethics. Thus the ethics can be defined as the ability to distinguish between right and wrong (Buzzle.com, 2009).

For a business to grow and maintain its prosperity, it must be found on certain ethical principals. A business that is based on ethics can run successfully for years (Buzzle.com, 2009). Money makers who do not pay attention to ethical values can only earn a short term success. To last long in the market, ethical business policy is must.

An ethical business policy is important at many levels. It establishes expectations for employees and management as well, and defines the enforcement mechanism and penalty for noncompliance. When the ethical policy is professed as an integral component of the organization’s culture is understood, followed and enforced (Bankers Online, 2010).

An effective ethical policy has number of advantages. Its awareness among employees is a guarantee of proper conduct and doing the right things. They will better understand their responsibilities and expectations and assume the appropriate level of accountability when identifying and managing business risk (Messmar, 2003).

The ethical policy of an organization is more than just a formal document outlining related rules of conduct. It is about integrating positive values throughout an organization (Sethi, 2003). Some key fundamental characteristics of for making ethical policy effective and worth having are (Find Articles, 2008);

· Employees often used to follow the behaviour of their superior executives, managers and others who have succeeded in the company. There fore everyone at every level must stick to the guideline laid down by the ethical policy.