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Business Ethics – Things You need to Know

Business Ethics – Things You need to Know

Business ethics revolves around relationships. These relationships exist between businesses and consumers on multiple social and economic levels. Business ethics therefore, define the relationship p between an individual and a business, or may apply to employees, various areas of government, and the community.

What Are Business Ethics?
Business ethics is the study of proper business policies and practices regarding potentially controversial issues, such as corporate governance, insider trading, bribery, discrimination, corporate social responsibility and fiduciary responsibilities. Law often guides business ethics, while other times business ethics provide a basic framework that businesses may choose to follow to gain public acceptance.

Business ethics have developed into standards of moral and ethical responsibility, not only in the United States but also around the world. The demand for moral and ethical behavior in all aspects of domestic and international business communications and partnerships has encouraged the development and evolution of business ethics.

The field of business ethics is not simple to define. The wide range of industries and areas of social behavior that exist between any business and the consumer or general public complicate the field of business ethics. Business ethics can be practiced in corporate offices, as well as local mom-and-pop grocery stores. It has to do with social responsibility and corporate compliance, as well as employer and employee rights. The field of ethics addresses, morality, responsibility, decisions, and actions taken by any company or business from the grassroots level to the highest positions in local or national governments.

This article on the basics of business ethics will explore and define the difference between corporate compliance, corporate and social responsibilities, corporate responsibilities, as well as ethics in the workplace and its impact on business.

Consumer rights, as well as expectations, are receiving increased attention in society today. The explosion of the Internet and international business development has demanded the need for further development and structuring of international business ethics in a wide range of countries with different cultural backgrounds. Business ethics also plays an important role in the financial world, as has commonly been seen in news accounts of leveraged buyouts, insider trading, and the proliferation of junk bonds.

Developing standards and infrastructures in the field of business ethics helps to bridge economic, language, and moral or value gaps between countries and their ways of conducting business. As such, business ethics have had a great impact on the way business is conducted in the 21st century.

Business ethics generally are built upon four basic foundations: attitude, value, behavior, and normal customs and expectations. The study of business ethics may stray into fields of law, but more often than not deals with the behavior, expectations, and demands of common courtesy, manners, honesty, and integrity.

Unethical business behaviors damage productivity and living standards. Such practices also affect social, as well as environmental, degradation that results in damage to many aspects of society, which results in lack of trust. Businesses have become increasingly competitive and the value of products and their manufacturers has gone far beyond price-per-unit or the function they perform.

It can be said that business ethics is the analysis of moral behavior in practice and activities, and is a reflection of morals and values in any given society. It is obvious that business does affect our lives, both at an individual and social level. However, what role do business ethics play in the way an employer treats employees and vice versa? In what way do business ethics affect the treatment between competitors, consumers, and the environment?

Understanding business ethics provides a way for individuals to resolve ethical dilemmas, as well as to garner a respect for honesty, development of trust, a sense of fair play, and human dignity issues. Obligations between employers and employees are just as important as the observation of ethics in every avenue of business, from sales and advertising, to and marketing and competition.

In addition, business ethics help individuals in various levels of business to recognize and analyze ethical considerations that may be relevant to many different types of business activities. The nature of business itself, as well as various models for conducting business, is placed under a microscope, where ethics judge behavior, business practices, and final outcomes.

In appreciation of the role that business ethics play not only in business, but also in our social environment, will help to illustrate the fact that ethics and morality are an expected part of the consumer-provider relationship.

BREAKING DOWN ‘Business Ethics’
Business ethics ensure that a certain required level of trust exists between consumers and various forms of market participants with businesses. For example, a portfolio manager must give the same consideration to the portfolios of family members and small individual investors. Such practices ensure that the public receives fair treatment.

The concept of business ethics arose in the 1960s as companies became more aware of a rising consumer-based society that showed concerns regarding the environment, social causes and corporate responsibility. Business ethics goes beyond just a moral code of right and wrong; it attempts to reconcile what companies must do legally versus maintaining a competitive advantage over other businesses. Firms display business ethics in several ways.

Case Studies
In the case of a company that sells cereals with all-natural ingredients, the marketing department must temper enthusiasm for the product versus the laws the govern labeling practices. Some competitors’ advertisements tout high-fiber cereals that have the potential to reduce the risk of some types of cancer. The cereal company in question wants to gain more market share, but the marketing department cannot make dubious health claims on cereal boxes, or it risks facing litigation and fines. Even though competitors, who have a larger market share of the cereal industry, use shady labeling practices, that doesn’t mean every manufacturer should engage in unethical behavior.

Another case study involves quality control for a company that manufactures electronic components for computer servers. These components must ship on time, or the parts manufacturer risks losing a lucrative contract. The quality control department discovers a possible defect, and every component in one shipment faces checks. Unfortunately, the checks may take too long, and the window for on-time shipping could pass, and that, in turn, delays the customer’s product release. The quality control department has the option of shipping the parts, hoping that not all of them are defective, or the company can delay the shipment and test everything. If the parts are defective, the company that buys the components might face a firestorm of consumer backlash, which may lead to the customer to seek another, more reliable supplier.

Statistics
The National Business Ethics Survey comes out every two years. In the 2013 edition, respondents saw an all-time low in unethical behavior. Around 41% of employees saw misconduct on the job, compared to 45% in 2011. The survey concluded that possibly an uncertain economic climate led to less risk-taking in for-profit businesses leading more managers and executives to act more ethically. The survey found that 60% of misconduct on the job occurred among managers, and 25% of employees blamed senior-level managers for unethical behavior.

Business Ethics. Chart with keywords and icons

Do i need Business ethics ?
Every one of us is impacted in some way by ethics. We all belong to organizations, groups, or associations. We belong to schools, clubs, sports teams, and organizations developed in our churches and at our places of work. Many times, we often find ourselves in a situation where we must determine resolutions that concern right and wrong.

For example, which one of us has ever gone through school without knowing a friend or fellow student who has cheated on a test? Did we stay quiet, or did we turn in the cheater? At work, have you ever known someone to fudge the truth a little about a delivery date, an incident, or about a dishonest episode that involved a fellow coworker? At what point does loyalty begin and end? Do we owe our loyalty to our friends or to our place of work, our school, or any other organization with which we are involved? Such questions are considered ethical dilemmas, and as such, are factors that may influence conduct in a wide variety of scenarios.

Business ethics have been studied since the 1960s, and yet we find ourselves still struggling with ethical and moral issues today. Many people are extremely cynical when it comes to making a decision between doing the right thing and keeping a job. In the past, the bottom line for most businesses and corporations has been the dollar. Competition, unethical practices, cheating, and backstabbing were common.

Many people are rightfully concerned that they will have to compromise their own standards when it comes time to accept jobs in the financial world, the medical world, as well as in many other fields, including construction, Internet information and technology, science, and global business relationships.

While many of us want to do the right thing, there are times when we all find ourselves between a rock and a hard place when it comes to making the right decision and maintaining job security. No one really wants to be a snitch, tattler or whistle blower. However, many positive changes that have occurred in today’s society have been the result of such actions.

How we each deal with such dilemmas is a personal decision that is based a great deal on our own upbringing, moral codes, and standards. Our values, sense of loyalty, and trust are incorporated into our actions and, as such, affect the day-to-day running of businesses, both large and small.

Where do you stand? How do you as a business employer or employee, ensure that business ethics and standards and codes of conduct are maintained?

Conclusion
The nature and goals of business ethics need to be understood in order for individuals to understand their rights in today’s society. Business ethics is a study that goes much deeper than the concept of cheating or dishonesty. Topics involving loyalty, expectations, and cynicism play a great part in the study of business ethics. So, ethics may also be defined as a set of moral principles or values and conduct that affect each of us on a personal level.

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