Explain the role of ethics in entrepreneurship.
2 Answers | Add Yours
Entrepreneurs are people who start new business activities. Being a successful entrepreneurship requires many different capabilities such as initiative, foresight and judgement, willingness to take risk. It also requires a strong motivation to achieve ones goals in life. Frequently, for business entrepreneurs, these goals may be center around making profit and amassing wealth. Unfortunately, high ethical standards is not a very important requirement for becoming a successful entrepreneurs.
I must make it clear that I am not accusing entrepreneurs of having low ethical standards. Rather I am of the belief that the best and most successful entrepreneurs also have very high ethical standards. But frequently it is found that, many people with not so high ethical standards succeed fairly well as business entrepreneurs.
But looking at this issue from another angle, success in true business is not possible without delivering value to ones customers. I have used the phrase 'true business' to distinguish it from fraudulent, pseudo business activities and practices such as ponzi schemes, and insider trading in stocks.
Thus some sense of serving the customer is implicit in all successful business entrepreneurs. And to that extent they need to have some minimum ethical standard. Good ethical behavior also helps entrepreneurs to develop good reputation during the initial period of business establishment and thus obtain support of suppliers, employees and other people in position to help. A reputation for meeting one's commitment also help entrepreneurs to win customer. While an entrepreneur may or may not have very high ethical standards, a bad reputation for ethical behavior is definitely poison for an entrepreneur trying to establish a new business.
Ethics have a huge role to play in business as they give a guideline as to which business practices are socially and morally acceptable and which are not. In cases where there are no laid down rules as to the right and wrong ways of doing business, Ethics fill in the gap and give the much needed direction.
It is through awareness of ethics that entrepreneurs desist from engaging in business practices that lead to loss of human life and human rights, compromise the environment or bring about gain at the unfair expense of other businesses, employees, consumers, etc. Sound business ethics benefit the consumer as they strive to direct businesses to be open and honest to their customers about the product or service that they offer.
Join to answer this question
Join a community of thousands of dedicated teachers and students.Join eNotes