Question

An organization has to behave ethically because it has to exist in the competitive environment.

• A. False
• B. True
• C. Partly true
• D. None of above

Answer 1

Answer: (B)

True

Ethical conduct is in the long-term interests of businessmen. A business enterprise that is honest and fair to its customers, employees, and other stakeholders earns their trust and good will. It ultimately results in customer satisfaction, healthy competition, industrial growth and high earnings. Businesses must balance their desire to maximise profits against the requirements of stakeholders. Maintaining this balance often requires trade offs. To address this unique aspect of business, rules are articulated to guide it to earn profits without harming individuals or society as a whole. While referring to business activity profile, Mahatma Gandhi once mentioned that all

business entrepreneurs should ask themselves the question whether the activities they are contemplating would be of some use to the common man. This statement emphasizes the importance of nobility of business purpose.