Business Ethics

What are Business Ethics?

  • Definition: Business ethics are the moral principles that serve as guidelines for how a business conducts itself and its transactions.

  • Relation to Individual Ethics: The same ethical guidelines that individuals use in personal and professional settings are applicable to businesses.

Determining Right and Wrong

  • Acting Ethically: Involves determining what is considered "right" or "wrong" in business practices.

  • Basic Standards: These standards vary worldwide but dictate unethical behaviors in business.

  • Unsafe Working Conditions: Example of unethical practice; can endanger workers (e.g., crowded work floor with one exit).

Grey Areas in Ethics

  • Difficult Determination: Some business practices exist in a gray area where ethical lines are blurred.

  • Example of Company Practices:

    • Company A negotiates prices with Company B.

    • Company A treats Company B's representative lavishly, which is not illegal but may lead to unethical behavior resembling bribery.

Understanding Business Ethics in Three Parts

1. History of Business Ethics

  • Origins: Concept existed since the creation of companies but gained prominence in the 1970s.

  • Academic Basis: Principles are based in academic writings and research on business operations.

2. Business Scandals

  • Connection to Scandals: Business ethics often highlighted during scandals such as child labor or poor working conditions.

3. Integration of Ethics

  • Contemporary Developments: Companies are increasingly integrating business ethics into their operational frameworks.

  • Political Awareness: Heightened focus on ethical practices aligns with growing political correctness.

Summary of Importance

  • Function of Business Ethics: Crucial for worker safety, honest trade relations, and overall quality improvements in goods and services.

  • Variability in Standards: Different organizations may have unique ethical standards, but understanding basic guidelines is essential for management.