The Effect of Business Ethics in Improving the Productivity in a Business Organization - Paper Example

Date:  2021-07-02 11:16:15
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With the arrival of globalization, businesses today survive in a highly competitive environment. Therefore, businesses have developed different incentives aimed at employee motivation as well as on customer loyalty for their businesses to survive in the highly competitive world. Customers are an important asset in the success of any organization. Su, (2014) writes that most businesses put in a lot of effort to create customer loyalty and retain them for as long for long periods. Awan et al., (2014) define customer loyalty as when individuals choose to use specific products from a particular company other than shopping for different products from different companies. Research studies have revealed that customer retention is important for the positive impact on the performance of any organization (Crane & Matten, 2016). Also, Mathieu, (2014), agrees that loyal and satisfied customer offers free and active advertisement for the business. The author mentioned above also writes that it is cheaper to maintain a loyal customer than to get a new client.

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Customer satisfaction cannot be reached without the assistance of employees. The employees of the organization are critical as they are the face of the organization (Tsai, 2011). With the arrival of globalization, businesses today survive in a highly competitive environment. According to Arruda & ROK, (2016), rival companies copy each other's products, processes, and technologies. The above author, however, agrees that employees of a company are the unique selling point for businesses to gain a competitive advantage over their competitors. Research has revealed a lot of effort is put on the customer satisfaction and employee motivation ignored by most companies (Tsai, 2011; Wanda, 2005)

Different incentives have been put in place to achieve both employee motivation and customer loyalty. However, organizations cannot ignore the role of business ethics in the achievement of customer loyalty and motivation of staff. Arruda & ROK, (2016), define business ethics as a form of professional ethics that refers to a set of principles which provide for the modern concepts of work within a business environment. Literature has shown that an ethical business environment carries many benefits for an organization. According to Awan et al., (2014) there is an increased sense of favor from customers to firms that exist in a responsible and ethical manner. In addition, Wanda, (2005) writes that employees optimism is higher when they are working in a fair environment. Therefore, this research aims to determine the importance of business ethics in boosting the morale and motivation of employees. In addition, the project will study how business ethics affect the perception of customers towards an organization.

Project objective

The main aim of the study is to establish the effect of business ethics in improving the productivity and overall welfare in a business organization. The study aims to evaluate the importance that an ethical environment plays within a company in promoting the success and helping the business to achieve its goals and objectives.

Project scope

The research project will concentrate on the effect of business ethics on an organization's employees and customers. Its focus will be on the association amid business ethics and the morale and job fulfillment of the organization's employees. The study will also concentrate on the effect of business ethics in shaping the perception of the customers towards the business.

Literature Review

Crane & Matten, (2016), define ethics as codes of conduct that govern the behavior of people in any organization. Values are significant as they mold the standing of the firm and further determine its success. Adhering to the right code of conduct shapes the behavior of employees and other members of the organization. Various studies have been carried out concerning business ethics and how it influences the morale of workers and customer behavior. This literature summarizes various studies that have been undertaken on business ethics and the reaction of clients and employees to several ethical issues that may be affecting their organization.

According to Su (2014), ethical behavior brings significant advantages to business. The moral philosophy utilized by an organization to conduct their activities can have an effect on their reputation and productivity. Businesses that operate in an ethical environment can gain competitive advantage, gain marketing benefits, improve and maintain profitability (Barry 2016) as well as uphold confidence of their investors, shareholders and the general public. It also defends the credibility of the business. (Crane & Matten 2016) also pointed out that legal and monetary inducements are associated with the ability of the business to depict ethical behavior.

Organizations that have high ethical standards inaugurate long-lasting relationship with their customers. Consumers usually invest in businesses in the form of shares. According to Mathieu et al. (2014), business ethics influences the behavior of clients in various ways. Consumers have been observed to have a high level of association with organizations that portray ethical behavior in their operations. This is as a result of the right image that they have in the market hence attracting clients. The development of trust among customers also takes place when an organization's reputation depicts integrity. This is developed through coming up with internal ethical principles. Limited customers illustrate that the organization will obtain minimal profits and thus decreased productivity (Mathieu et al. 2014).

The ethics that leaders of an organization use to manage their employees can influence the loyalty and morale of these workers. Additionally, managers who are transparent on their anticipation and demand the aspects of honesty, integrity, and commitment also generate a work environment that in turn rejects unethical behavior High ethical standards by leaders encourage workers to meet the same level as well. This results in various benefits. First, it boosts their confidence to undertake their duties in the business. It also leads to happy employees who in turn spread the word about their business place. Having workers with high morale also increases employee retention and productivity (Barry 2016). Having an ethical environment also serves to encourage employees to come to work and hence prevent elevated levels of absenteeism. This, in turn, will improve the ability of the firm to operate in an efficient manner.

Literature problems

The literature lacks adequate evidence on the effect of business ethics on customer perception and loyalty. It is important to determine what factors of ethical behavior affect customer perception. I addition, the literature reviewed does not provide details on the relationship between customer relations and employee satisfaction. In the introduction of the chapter, we see that employee satisfaction is important in the promotion of customer retention. This is not clearly defined in the literature review.

Gaps opportunities

Adequate research has been carried out on business ethics and its role in the business environment. However, there are gaps in studies that investigate the approaches done by managers and employees to practice ethical behavior in their duties and the business climate. Studies also lack on how well employees and other people within the organization carry their duties after being highly motivated. As such, research should be done focusing on a case where an organization fails to emphasize their ethics to workers and see if the personnel will display them given appropriate working environment or if they have been highly motivated.

Research Hypothesis

H01: There is no significant relationship between ethical practices within an organization and the improvement of morale and motivation of the organization's employees

H02: There is no significant relationship between ethical practices within a business environment and the perception and behavior of consumers towards an organization.

H03: There is no significant relationship between employee morale and motivation and the perception and attitude of consumers towards an organization.

Research questions

Primary Question

What is the effect of business ethics on the customer perception and employee motivation within a business environment?

Secondary questions

What is the relationship between business ethics and employee motivation and job satisfaction within an organization?

What is the connection between business ethics and customer perception and loyalty towards an organization?

What is the relationship between employee motivation and client loyalty?

What are the methods used by employers and managers to integrate and practice ethical behaviors within a business?

Research design and methodology

Qualitative research

The study will undertake the field assessment approach to collect qualitative data. After presenting the research proposal, a visit to several hotels within the state will be conducted where data will be collected. Respondent checking and triangulation approaches will be used to guarantee rationality and consistency of the data collected. Convenience sampling will be used to determine fifteen hotels which will be visited. Afterward, snowball sampling will be used to select the 60 research respondents divided between the organization employees, employers, and their customers. Structured interviews and focus group discussions will be used to collect qualitative data from the study respondents. The independent variables will be the business ethics within the organization while the dependent variables will be employee morale and motivations and the consumer perception and loyalty towards the organization.

Quantitative research

Quantitative data will also be collected in the research project. The research will first develop research questions and hypothesis which will require quantitative data. Observation and structured questionnaires will then be used to collect quantitative data from ten hotels within the state. Convenience sampling will be used to select hotels to be visited. After that, simple random sampling will be used to select 150 respondents spread among managers, employees, and customers to answer the structured questionnaires. Observation will be done by the researcher and two research assistants on the selected hotels on random days over a period of three weeks. Data collected will be analyzed using the SPSS statistical data software. Both descriptive and inferential data will be used to analyze and interpret the findings. T-tests will be used to determine comparisons. Data results will be presented in charts, graphs, and tables. Researcher checks, peer evaluation, and triangulation will be used to ensure reliability and validity of the methods used to collect quantitative data and that of the final results on data collected.

Research limitations

The study will be conducted during a quiet season for the hotel industry. The research findings may therefore not be a complete description of consumer attitudes towards the organization and its relation to ethical practices within the organization.

The research will also be focused on consumer perceptions relationship with employee morale and business ethics. Other conditions such as economic types, consumer and employee personal ethics and well as customer and employee attitude will not be incorporated in the study.

The research will be conducted in the big restaurants and hotels in the state. The research findings may the...

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