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Significance of ethical business practice

BUSINESS ethics have been a growth area in the business world in recent times. Before the advent of business ethics, business transactions have largely been conducted on the principle of caveat emptor (let the buyer be aware).
It is a warning to someone buying something that it is their responsibility to identify and accept any faults in it. However, much has changed in recent times.
The law is the most important source of ensuring that consumers receive a fair deal from retailers, wholesalers and manufacturers.
Some of the laws to protect the consumers in Zambia include: Weights and Measures Act, Chapter 403 of the laws of Zambia, Competition and Consumer Protection Act, 2010 (Act No 24 of 2010) and Zambia Bureau of Standards (ZABS), the Standards Act, Cap 416 of 1994 of the laws of Zambia for the preparation and promulgation of Zambian standards. These and other related laws are essentially an imposition of moral consideration on business organisations and individuals.
However, it is important to note that this does not imply that business entities surrender to the law to resolve their moral dilemmas. They should not wait for the law to tell them that what they are doing is right or wrong.
This is where ethical business practice becomes relevant. Ethics show a corporation how to behave properly in their business and operations. It is a set of roles prescribing what is good or evil, or what is right or wrong for people. Ethics can be considered as the value that form the basis of human relations and the quality and essence of being morally good or evil or right or wrong. Business ethics imply honesty, confidence, respect and fair acting in all circumstances.
A business which does not respect ethical criteria and fails to improve them will totally disrupt its integrity and unity. Its capacity to achieve its goal will be impaired and can lead to internal or external conflicts.
For example, some companies were recently charged for contravening the provisions of section 32(1)(a) and (b) of the weights and measures Act, Chapter 403 of the laws of Zambia, and some business persons were convicted for violation of section 358 of the penal code Chapter 87 of the laws of Zambia.
It is unethical and illegal for any business making offerings that have been outlawed and are against societal norms, for example, the drug trade. Employing child labour is also unethical because the society frowns at it. Misleading advertising is unethical.
The Competition and Consumer Protection Act prohibits such unfair trading under sections 45, 46, 47 and 49 of the act. Section 45 states: a trading practice is unfair if (a) it misleads consumers; (b) it compromises the standard of honesty and good faith which an enterprise can reasonably be expected to meet.
Section 46(1) states: a person or an enterprise shall not practise any unfair trading, and section 47 states a person who, or an enterprise which (a)(1) falsely represents that any goods are of a particular standard, quality value, grade, composition, style or model or have a particular history or previous use is liable to pay the commission a fine not exceeding 10 percent of that person’s or enterprise’s annual turnover or 150 thousand penalty units, whichever is higher.
However, it is good to know that some business organisations have a set of policies on business conduct and compliance. Their policies embrace ethics, internal controls, conflict of interest and a host of other areas, all of which are designed to promote good and ethical business practices. Employees are acquainted with the policies and are made to sign undertakings to maintain them. As a matter of policy, a company is ready to concede business opportunity in favour of its code of ethics. To these entities I say keep it up.
It is significant that business organisations are ethical in their conduct. Appearing to be ethical, it may be suggested, is simply good business. Consumers are, arguably, more likely to buy from a company which can be seen to be acting ethically. Graduates are more likely to be attracted to companies which treat their employees fairly and give customers a fair deal.
Ethical business practice is a means of forestalling legislation and stringent government regulations. Business ethics requires companies to contribute towards a just and fair society, while also ensuring that environmental pollution is brought under control. Another significant aspect of business ethics stems from the fact that businesses need to retain the vast amount of social power entrusted to them by the public.
My appeal goes to all companies in Zambia to behave ethically in all their business activities. By so doing we will ensure more effective and productive use of economic resources as we strive to develop our country.
The author is an accountant and lecturer based in Lusaka