The Importance of Ethics and Reputational Capital: Why Giants Fall?

CHAPTER 1

1.1  Introduction

Moral philosophy or ethics is a branch of philosophy that mainly involves the systematization, the defense as well as the recommendation of concepts of both the right and wrong behavior. The field of aesthetics and ethics mainly deals with matters of value; hence it comprises of the axiology, a branch of philosophy. The primary purpose of ethics is to offer answers to human morality through the definition of concepts that include justice and crime, good and evil, virtue, and vice as well as right and wrong. This, therefore, means that moral philosophy is related and works side by side with other fields, including value theory, moral psychology, and descriptive ethics. The major areas of study that are recognized within ethics today include; meta-ethics, meta-ethics deals with the theoretical reference and meaning of moral propositions as well as how one can determine their truth values.

Normative ethics which mainly focuses on the practical means used in the determination of a moral sequence of action. The other area of study in applied ethics, which is all about what an individual is permitted or obligated to do within a particular situation or a specific domain of action. Reputational capital, on the other hand, can be defined as the value of all the intangible assets that can be linked to a business. This could be anything from the brand identity to business reviews, which all goes around one word, trust. This, therefore, means reputational capital is all about how much people trust a business; the more the trust, the greater the reputation capital of the business. This paper, therefore, is a research study that tries to establish more about ethics and reputational capital, their impact on any kind of business, their importance, how they can be instilled in any business as well as how they two concepts or factors influences or contributes to the downfall of major giant businesses across the globe.

There exists a huge connection between reputation and business ethics. Ethical behavior in business, such as trust, allows for the building of reputation over time. Business reputation is earned through the provision of good products or the many years of offering quality services as well as excellent relationships with bankers, customers as well as the suppliers. This means that, however, good public relations are, it cannot act as a substitute for the business reputation. Reputation and ethics are intangible assets and aspects of all businesses, and its either the businesses to have them or not. The two are intangible; however, their consequences in the business allows for the determination of whether the business is sustainable or it is just a flash in history depending on the side of the coin that the business is operating. It is as a result of the recognition of the long-term impacts of a business reputation that most businesses emphasize the importance of ethical behavior in business.

Intangible assets of a business or a corporate including trademarks, business processes, patents; the reputations for integrity and ethics, sustainability, quality, resilience, safety as well as security all add up to form the reputation capital for a business. Reputation capital delivers social and functional expectations of the public on the one hand as well as managing to build an exclusive identity, on the other hand hence creating a trust which builds the informal framework within a company. The framework offers a return in cooperation while it produces reputational capital. An organization’s or a company’s long-term competitive advantage is secured by a positive reputation, and this means that the higher the reputation capital, the fewer costs are incurred in exercising control and supervising. Reputation capital asset is a corporate asset that can be traded, managed as well as accumulated for trust, a stronger readiness to invest in the stock of a company, the legitimization of social recognition and a position of power, shareholders stronger willingness to hold on to shares in cases of crisis or a premium price for services and goods being provided.

1.2 Purpose

The main reason why I choose to discuss the issue of ethics and business reputation is that they two influences the success or failure of any business and has, in the past, caused the downfall of giant businesses. Ethics and business reputation are critical factors in the operation and growth of any business in any kind of industry. The two are intangible social factors whose effects can be felt and seen in the daily operations of the business. I would love to get into details on the importance of ethics and reputation capital in the business.