Answered: Define ethics and its role in…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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Question

Define ethics and its role in partnerships. Discuss how you can use ethics in partnership in the division of income and operational agreements daily workplace

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

Expert Solution

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Ethics are very important to guide individuals and organizations in making decisions and acting in a morally righteous and responsible manner. Fairness, openness, and accountability in a partnership are crucially influenced by ethical behaviour. The allocation of financial resources and operational contracts are crucial areas where ethics can be used to encourage a strong and fruitful collaboration.