John Commons on Customer Goodwill and the Economic Value of Business Ethics: Response to Professor Sen

1994 ◽  
Vol 4 (3) ◽  
pp. 359-365 ◽  
Author(s):  
Robert Black
Keyword(s):  
Business Ethics ◽  
Customer Relations ◽  
Economic Value ◽  
Market Value ◽  
Intangible Capital ◽  
Socialist Economy ◽  
Business Practices ◽  
Ethical Business ◽  
Ethical Practices ◽  
Fair Competition

Abstract:This paper shows how John R. Commons’ analysis of a firm’s goodwill value gives analytical support to Professor Amartya Sen’s contention (BEQ, 1993) that business ethics makes economic sense. A firm’s market value consists of the value of both tangible and intangible capital, including the goodwill value of ongoing customer relations. If a firm is to defend its goodwill value, it needs to have the protection of the courts and to pursue ethical practices. The courts defend fair competition by giving protection from unethical competitors while the firm defends its reputation with honest dealings.By implication, firms which depend on ongoing customer relations will tend to engage in more ethical business practices than firms which do not. Even a firm which makes a mistake that compromises its product’s safety may reduce the loss of goodwill value over time by admitting the mistake early rather than hiding it.Also by implication, the transition from a command socialist economy to a market economy cannot be made instantaneously since trust, reputation, and these ongoing customer relations—key institutions of market economies—cannot be generated instantaneously.

scholarly journals Business Ethics and Ethics Education in American Business Programs

Competitio ◽  
2008 ◽  
Vol 7 (2) ◽  
pp. 195-200
Author(s):  
John D. Keiser
Keyword(s):  
Business Ethics ◽  
Ethics Education ◽  
Business Students ◽  
Jel Classification ◽  
American Business ◽  
Business Practices ◽  
Teaching Ethics ◽  
Ethical Business ◽  
Business Programs ◽  
The Difference

This essay presents an overview of what American business programs cover in their curricula regarding ethics and the reasons behind teaching ethics-related material to business students. Topics for the paperinclude; requirements for having ethics in the curricula, broad perspectives of what constitutes ethical business practices, and the difference between professional ethics and business ethics. Journal of Economic Literature (JEL) classification: M14, A20

scholarly journals Building Customer Value And Profitability With Business Ethics

2016 ◽  
Vol 14 (3) ◽  
pp. 83-90 ◽  
Author(s):  
Robert C. McMurrian ◽  
Erika Matulich
Keyword(s):  
Business Ethics ◽  
Customer Value ◽  
Business Practices ◽  
Ethical Business ◽  
And Performance

Firms assume ethical business practices only add costs to the firm. However, business ethics actually add value for customers and result in increased profitability and performance for the firm.

scholarly journals Intangible-driven value creation: supporting and obstructing factors

2014 ◽  
Vol 18 (3) ◽  
pp. 87-100 ◽  
Author(s):  
Elena Shakina ◽  
Mariya Molodchik
Keyword(s):  
Value Creation ◽  
Investment Decision ◽  
Economic Value ◽  
Value Added ◽  
Market Value ◽  
Intangible Capital ◽  
Future Research ◽  
Unexpected Result ◽  
Content Type ◽  
The Impact

Purpose – This study aims to investigate the factors that support or obstruct market value creation through intangible capital. Design/methodology/approach – The paper explores the impact of intangibles and exogenous shocks on corporate attractiveness for investors measured by market value added. Specifically, the relationship between intangible-driven outperformance of companies, measured by economic value added (EVA) and a number of intangible drivers on macro-, meso- and micro-levels is analyzed. It is supposed that the process of value creation is not only confined to companies’ performances. The empirical research was conducted on > 900 public companies from Europe and the USA during the period of 2005-2009. Findings – The study establishes that investment attractiveness is affected by intangibles. It is found that a company’s experience, size and innovative focus facilitate value creation. An unexpected result was revealed concerning countries’ education level, which appears to be an obstructive condition for intangible-driven value creation. Research limitations/implications – The study reveals the significance of industry belonging for intangible-driven value creation. Nevertheless, it does not discover the particular characteristics of industry that influence corporate attractiveness for investors. These issues could be addressed in future research. Practical implications – The findings established in this study extend the understanding of the phenomenon of intangible capital and enable the improvement of investment decision-making. Originality/value – The study emphasizes the holistic framework of market value creation by analyzing a number of strategic crucial factors in line with EVA.

scholarly journals Assessing Islamic Business Ethical Practices Through Clients’ Perception

2020 ◽  
pp. 92-108
Author(s):  
Muhammad Ismail ◽  
Shakir Ullah ◽  
Zafar Zaheer
Keyword(s):  
Business Ethics ◽  
Positive Impact ◽  
Ethical Values ◽  
Ethical Business ◽  
Ethical Practices ◽  
Khyber Pakhtunkhwa ◽  
Independent Variables ◽  
Islamic Business Ethics ◽  
Business Sectors ◽  
Structured Questionnaire

This study evaluates the Islamic business ethics practices in Khyber Pakhtunkhwa (KP) province of Pakistan from the clients’ perspective and how they perceive it. The study focuses on three Shariah values i.e. obligatory values (Faraid), the prophet’s traditions (Sunnah) and the voluntary rectitude (Nawafil) and checks their impact of merchants’ business ethical practices. The Shariah values are further divided into nineteen Islamic business ethical values adopted from well-established prior studies. In addition to this, the study is also focused to assess the most ethical business sector among ten selected business sectors. The study was conducted in Khyber Pakhtunkhwa, which is a relatively conservative/religious province of the country. To achieve the objectives of the study, a quantitative method was adopted. The data was gathered through a well-designed structured questionnaire in various universities of Khyber Pakhtunkhwa, The data were analyzed through descriptive statistics and regression analysis. This research concluded that Islam has a significantly positive impact on individuals’ business ethical practices as perceived by the clients. Among other independent variables, the voluntary rectitude effect was found to be more significant in individuals’ business ethical practices. It is further concluded that most ethical practices are found in the communication and transport sectors while the least ethical sectors are hospitals, doctors, and solicitors. The study contributes to the established Islamic business ethics literature.

scholarly journals Ethical business practices in the Eastern Cape automotive industry

2014 ◽  
Vol 17 (5) ◽  
pp. 569-583 ◽  
Author(s):  
Hendrik Lloyd ◽  
Michelle Mey ◽  
Koman Ramalingum
Keyword(s):  
Business Ethics ◽  
Automotive Industry ◽  
Code Of Ethics ◽  
Business Environment ◽  
Ethical Behaviour ◽  
Business Practices ◽  
Eastern Cape ◽  
Online Questionnaire ◽  
Ethical Business ◽  
Ethics Research

High profile scandals have brought about a renewed interest in business ethics and, in particular, inunderstanding the factors that promote ethical behaviour. Business ethics is about identifying andimplementing values, rules and standards of conduct for guiding morally right behaviour in an organisation’sinteraction with its stakeholders. Against this background a quantitative analysis of the ethical practices of46 companies operating in the Eastern Cape automotive industry was conducted to determine the extent towhich ethics-related interventions contributed to establishing and maintaining an ethical organisationalenvironment. A structured online questionnaire was used to collect the data. The data collected wassubjected to extensive statistical analyses, including Cronbach Alpha coefficients and item total correlations,and various descriptive statistics were included as a quantitative summary of the data. A constant referencevalue for the study was also calculated to allow inferences regarding the significance of the tested variablesto the study. The results revealed that the organisations in the sample are highly ethical due to the presenceof ethics-related interventions, including a code of ethics, committed leadership, adherence to internal andexternal governance requirements, compliance with legislation and encouragement and disclosure ofunethical behaviour. In light of the high number of ethical scandals internationally, this study will add to theempirical body of business ethics research, as it provides organisations with a framework to establish andmaintain an ethical business environment.

Islamic business ethics and practices of Islamic banks

2020 ◽  
Vol 11 (5) ◽  
pp. 1009-1031 ◽  
Author(s):  
Muhammad Adli Musa ◽  
Mohd Edil Abd Sukor ◽  
Mohd Nazari Ismail ◽  
Muhd Ramadhan Fitri Elias
Keyword(s):  
Business Ethics ◽  
Business Practices ◽  
Islamic Banks ◽  
Ethical Practices ◽  
Content Type ◽  
Islamic Bank ◽  
Islamic Financial Institutions ◽  
Islamic Business Ethics ◽  
Bank Employees ◽  
Ethical Norms

Purpose The purpose of this paper is to empirically examine the perception of Islamic bank employees in Malaysia and selected Gulf Cooperation Council (GCC) countries, namely, Bahrain, Oman and the UAE, on various issues related to Islamic business ethics and the practices of the Islamic banks at which they work. Design/methodology/approach The required data to determine Islamic bank employees’ ethical perceptions is sourced from 144 completed survey questionnaires and interviews with 12 Islamic bank senior executives. Islamic model of normative business ethics is used to measure the relationship between attitudes and behaviours of employees and the ethical practices of Islamic banks. Findings Results show that the Islamic bank personnel working in Malaysia and the GCC perceived that their banks conform to Islamic ethical norms in business. These banks were seen to be concerned with their impact on society, and ethics prevailed over profit-maximisation. The findings also suggest that despite being less regulated compared to Malaysia, Islamic bank personnel in GCC had a better impression of the ethical standard practised in their institutions compared to the feedback given by their Malaysian counterparts. Additionally, this research also proves that, in general, there is a positive correlation between attitudes and behaviours of employees and the ethical practices of Islamic banks. Research limitations/implications The main limitation of the study is that the respondents were not selected randomly but rather through a convenient sampling of personal contacts. Despite the inherent limitation of the sampling method because of the constraints of time and resources, the large number of respondents from 12 different banks are representative of the Islamic bank employees in Malaysia and the GCC. Practical implications The findings may serve as a useful input for Islamic financial institutions in improving their practices to conform with Islamic ethical norms. Originality/value The topic of Islamic business ethics and the practices of Islamic banks have not been fully understood by its stakeholders. This paper aims to give insights on how far Islamic bank business practices in Muslim majority societies fit with the prescribed business framework in Islam and its contributing value for both the organization and employees.

scholarly journals Reasons of Unethical Business Practices in Slovakia: The Perspective of Non‑Governmental Organizations’ Representatives

2019 ◽  
Vol 67 (2) ◽  
pp. 565-581
Author(s):  
Anna Remišová ◽  
Anna Lašáková ◽  
Alexandra Bohinská
Keyword(s):  
Business Ethics ◽  
Business Environment ◽  
The State ◽  
Macro Level ◽  
Business Practices ◽  
Ethical Business ◽  
Unethical Conduct ◽  
Governmental Organizations ◽  
Non Governmental Organizations ◽  
The Government

After the fall of communism, the first non‑governmental organizations (NGOs) were established in Slovakia in the 1990’s. Since then, our NGOs have played an important role in promoting business ethics even though it was originally not part of their primary mission. Given that, we held semi‑structured interviews with the leaders of nine prominent Slovak NGOs to identify the perceived causes of unethical practices occurring in the Slovak business environment. The results of this qualitative research suggest that our respondents connect the causes of unethical actions in business mainly with the macro‑level of society, that is with the way the State with its institutions and authorities operate. Out of ten identified causes of unethical business practices, our respondents assigned five to the macro‑level, while they linked three reasons to the mezzo‑level with unethical conduct of companies and two to the micro‑level with unethical decisions of individuals. Since the government has taken measures to create a more ethical business environment recently, it is now up to companies to realize they hold the joint responsibility for the state of the Slovak society and to concentrate more on what they can do for their part in favor of the development of business ethics.

scholarly journals Building Customer Value And Profitability With Business Ethics

2011 ◽  
Vol 4 (11) ◽  
Author(s):  
Robert C. McMurrian ◽  
Erika Matulich
Keyword(s):  
Business Ethics ◽  
Customer Value ◽  
Business Practices ◽  
Ethical Business ◽  
And Performance

Firms assume ethical business practices only add costs to the firm. However, business ethics actually add value for customers and result in increased profitability and performance for the firm.

scholarly journals Business Ethics in Practice

2007 ◽  
Vol 6 (2) ◽  
pp. 38-44
Author(s):  
L Solomon Raj ◽  
J J Soundararaj
Keyword(s):  
Working Environment ◽  
Business Practices ◽  
Socially Responsible ◽  
Performance Expectations ◽  
Ethical Business ◽  
Ethical Practices ◽  
Responsible Action ◽  
The Government ◽  
Best Business Practices ◽  
Good Number

Globally, all stakeholders associated with any business feel comfortable in an environment where the fundamentals of ethical business practices are best protected and practiced. It is time for any business that goes global or act local to get serious about the moral aspects and social implications of decision making. There are a good number of evidences in the global scenario that the organisations adhere to ethical business practices are able to meet out the expectations of all the stakeholders satisfactorily. The ultimate task must be considered by every manager is to be more than simply meeting performance expectations. Performance goals must always be achieved through ethically and socially responsible action. The attitude to practice good business practices could be well evidenced basically by the mission and vision of an organization. The mission of Infosys is " to achieve our objectives in an environment of fairness, honesty and courtesy towards our clients, employees, vendors and society at large". Its vision is "to be a globally respected corporation that provides best-of-breed business solutions, leveraging technology, delivered by best in-class people". Moreover Infosys has set standards in every business activity- best campus, best working environment, best employer, most transparent dealings, highest quality standards- as well as the highest ethical standards, never seeking any deviant benefits from the government. It would be interesting but not shocking to know the most telling message that Infosys gives out to any discerning observer is its motto: Powered by intellect and Driven by Values. Knowing the importance of adhering to the best business practices to reap the fruit of success, some of the ethical practices need to be followed and being practiced by the well-known organisations are presented in this paper.

scholarly journals Business Ethics and Consumer Buying: An Ethno-Regional Study in UAE

2019 ◽  
Vol 18 (4) ◽  
pp. 23-30
Author(s):  
Indranil Bose
Keyword(s):  
Business Ethics ◽  
Regional Study ◽  
Ethical Business ◽  
Ethical Practices ◽  
Sustainable Marketing

UAE has the largest number of expatriates from across the globe and has the presence of the largest number of products, services and brands from across the globe. Understanding the consumer consciousness or business ethicality of the products, services or the brands available is important for sustainable marketing. The present research explores the level of overall consumer consciousness about the business ethics adopted by different brands or products and whether consumer consciousness or perception remains different about the ethical practices followed by different companies, according to their places of origin. The results show that the overall consumer consciousness about the ethical practices of the products/brands available is significant and the consumer consciousness about the ethical business is different according to the regional groups.

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