Ultimate Learning Guide For Business Ethics
Business ethics is a complicated web of ideas which govern how business interact on both a personal and global scale. The concepts that outline business ethics are just as complex, but if we break down the concept into smaller chunks, the definition of what it is becomes clearer.
The easiest way to go about this is to first look at ethics. Ethics are what tell societies how one should act in a certain situation. Why? Because it will help us achieved a particular objective and help us to take into consideration everything around us. Take, for example, being a child. You really want that pack of gum that’s sitting on the shelf near the cash register at a local store. Your mom has told you more than once that you’re not able to get it. No one’s looking, and you feel like if you just snag it and put it in your pocket, no one will know.
Ethics asks us to take into consideration how fulfilling our desires will affect our surroundings, in this case, your mom, the cashier, and the business. Stealing takes profits away from the business. The cashier could get in trouble for not noticing that a product was taken, given certain circumstances. And your mother could get in trouble because you stole something. In other words, ethics asks us to take responsibility for our actions by considering the consequences for ourselves and those around us. In this case, ethics would advise you not to steal the gum, and respect your mother’s decision.
Business ethics is similar to general ethics but it focuses mainly on a set of professional or applied ethics that review or study moral or ethical principles and moral or ethical problems that come up in different business environments. Business ethics tries to solve complex issues that arise such as when there is a conflict between the concept of legal and social responsibilities of the business and its need to maximize profits. The goal is to try and find a “sweet spot” between making a good profit but also making sure that a business avoids controversy. For instance, a business will want to try and seek the cheapest way to get their product manufactured but will want to make sure to avoid breaking laws, such as outsourcing to a business that may be involved in slave labor, harsh working conditions, and other morally compromising issues.
Business ethics involves different types of ethical and moral issues. Some of these concepts focus on the issues concerning the focus of business within the realm of our environment where the business activates. They typically fall under political, economic, legal and other social aspects. Other concepts turn their proverbial eye toward the corporate issues, such as the issues involved with the functions of a certain business or company. All the whole, other concepts look at the issues of the individual, or the issues that deal with the behavior and conduct of people within a business or company.
One way that many people forget that business ethics works in favor of is for employees. This is arguably one of the most controversial topics because it’s a hot button issue. The big question is what is the ethical baseline for businesses and their employees? Basic standards are meant to exist globally to dictate what is wrong or unethical as far as business practices go. A good example is determining what are and are not unsafe working conditions and determining if they’re unethical or not. They’re implemented to keep workers out of danger. This issue can be something like having a crowded work floor with only one way to exit if there is a fire. This would be a hazard because if something happens, many of these people are trapped in there. Frenzied workers may even trample each other to get out of the building!
In our modern world, we are constantly having to reanalyze and restructure our concepts of unethical business practices. This is not only because we have constantly evolving ethics and politics but also because there is still quite a bit of unethical business practices happening around the world. Determining what practices are and are not ethical aren’t always found in black or white scenarios. Problems arise when they’re found in shades of grey. The lines between ethical and unethical become blurred.
One such example crops up in the following scenario: Company 1 works with contact from Company 2. This person is the one whom they negotiate all their prices for supplies that they buy from Company 2. Company 1 wants to get the best prices they can for these supplies. An opportunity arises when the person from Company 2 comes to Company 1’s location to finalize the discussing points of a new contract. This individual, they decide, will be put into a luxurious hotel, given one of the best suites, all to make sure that what their needs and wants are met.
In layman’s terms, these favors aren’t technically illegal, but these actions fall into a grey area. Some people (especially those outside of the business) may see this as a form of bribery. The reason being is that all these actions were done to be able to win the favor of the other company and reap the benefits of cheaper prices and better deals.
In more recent years, business ethics have been challenged by the now influential voices of social media. As we’ve seen on social platforms like YouTube, Facebook, and Twitter, things like ad revenue (a huge part of some businesses’ income), have been greatly influenced by the thoughts and actions of many individuals. YouTube had what was called the “Adpocalypse” after it was discovered that some of its controversial content creators were receiving ad revenue. Traditional media and other people pointed out how some of these racist, homophobic, and other concerning videos were making money. The response was swift, with many content creators losing their ad revenue for various reasons — many of them not related to the controversial channels. We’ve also seen many other businesses come under fire for allegedly supporting certain problematic groups, and the ad support being pulled immediately due to the acknowledgment.
Business ethics can be broken down into three basic components. They’re the easiest way to understand the interconnected nature of business ethics.
Let’s first look at the history. Business ethics have been around for a while. Many people believe they were brought into existence alongside the creation of the first organizations and/or companies. Yet it’s analysts who believe that it started to gain ground, conceptually, in the 1970s. This is when the term became commonplace in the US. The main principles of business ethics are rooted in the academic world. Through academic writings, the concepts of business ethics took off and truly flourished. It gave birth to the research and the practical study of how business and ethics both work together and outside of each other.
Like any academic field, business ethics has seen itself slowly but surely change with the times. As the political climate in not just America but worldwide continues to shift, business ethics will be called to do the same. Political issues, such as gender equality, have brought into question the ethical issues of pay rates of women compared to men, the ratio of male to female employment opportunities in a business, and the repercussions of sexual harassment in a workplace. Most recently, we’ve seen the push for equality for LGBTQ+ rights in the workforce or the debate between those who argue that religious freedom should be something businesses should keep. Business ethics will undoubtedly continue to shift with these international debates.
We’ve lightly touched on this earlier with the recent influence of social media platforms on business ethics. This is the second major meaning behind business ethics. One example is when a company is exposed for selling goods in the US which were created using child labor or facilities with bad working conditions. Business ethics attempts to keep these issues from happening, but as we’ve seen in the international business market, such things continue to happen.
Many analysts consider this concept to be the most recent and continually expanding aspect of business ethics. It revolves around companies that are building business ethics into the core of their companies. By doing so, they make them the main standard and part of their operational blueprint. This has become one of the most important things for companies to consider in recent years. As of 2019, we live in a politically divided world. The integration of business ethics into a company’s core has been force-fed into many companies. People have decided to give their money to companies who seem to politically align with their values more. Some companies have decided to move forward with the integration, such as Gillette who presented a transgender male in their commercial, or the various companies who have, within the month of June (Pride Month for the LBGTQ+ community) has colored their logos with rainbows to show their support for LGBTQ+ rights. The done is done by companies and individuals who want to uphold or integrate more traditional Christian values and/or more conservative-leaning values into their companies.
Business ethics are like wind in the business world. They can’t be seen but they are definitely felt. They keep employees safe, help trade and interaction between companies (especially those on an international level) go smoothly and keep things as righteous as possible. They’re meant to help make for better services and goods as a whole, not to tear businesses down. Businesses run on individual concepts in many cases, but business ethics is there to try and keep a commonality between them so that companies can be both productive and honorary.
About This Business Ethics Guide
This guide offers the most insightful articles, educational videos, expert insights, specialist tips and best free tutorials about business ethics from around the internet. The learning guide is split into four levels: introduction, basics, advanced and expert. You can learn at your own pace. Each item shows an estimated reading or watching time, allowing you to easily plan when you want to read or watch each item. Below you’ll find a table of contents that enables you to easily find a specific topic you might be interested in.
Introduction to Business Ethics
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.
Why is Business Ethics Important?
Building on a foundation of ethical behavior helps create long-lasting positive effects for a company, including the ability to attract and retain highly talented individuals, and building and maintaining a positive reputation within the community. Running a business in an ethical manner from the top down builds a stronger bond between individuals on the management team, further creating stability within the company.
A History of Business Ethics
The notion of ethics in business can be traced back to the earliest forms of bartering, based on the principle of equal exchange. Countless philosophers and economists have examined the topic, from Aristotle and his concept of justice to Karl Marx’s attack on capitalism. But the modern concept of business ethics dates back to the rise of anti-big business protest groups in the United States in the 1970s. The subject gradually became an academic field in its own right, with both philosophical and empirical branches.
Ethics and Conflict of Interest
It may take some skill and good judgment to recognizing that you are in a conflict of interest situation. This is because private and personal interests can cloud a person’s objectivity. So it may be a lot easier to recognize when others are in a conflict, than when you are. This suggests that it may be useful to talk to a trusted colleague or friend when you are in doubt.
Strategies To Overcome Ethical Issues
The process that leads to effective moral action can be roughly divided into three components:
1 – Moral awareness: the process of identifying the ethical issues involved, the parties who have a stake in the action, what is at stake, and what the action options are.
2 – Moral judgment: the process of weighing the ethical considerations that bear on the situation and determining the moral course of action.
3 – Acting in accordance with moral judgment: deciding the right thing to do is not enough. One still needs to form the intention to do the moral thing and deal with practical obstacles in order to act effectively.
Ethical Theories Of Business
Ethical theory studies different philosophies or systems used to explain and make judgments regarding right/wrong/good/bad. It challenges to bring in clarity, substance, and precision of argument into the area of morality. They also dispute on how we should value humans in our actions. Ethical theories suggest justification for judgment regarding the morality or immorality of actions, and they provide a basis for claims about moral obligations.
The Principles of Utilitarianism
Utilitarianism is one of the most important and influential moral theories of modern times. In many respects, it is the outlook of Scottish philosopher David Hume (1711-1776) and his writings from the mid-18th century. But it received both its name and its clearest statement in the writings of English philosophers Jeremy Bentham (1748-1832) and John Stuart Mill (1806-1873). Even today Mill’s essay “Utilitarianism,” which was published in 1861, remains one of the most widely taught expositions of the doctrine.
What Is Deontology?
Deontology is an ethical theory that uses rules to distinguish right from wrong. Deontology is often associated with philosopher Immanuel Kant. Kant believed that ethical actions follow universal moral laws, such as “Don’t lie. Don’t steal. Don’t cheat.”
What Is Virtue Ethics?
Virtue ethics is a philosophy developed by Aristotle and other ancient Greeks. It is the quest to understand and live a life of moral character. This character-based approach to morality assumes that we acquire virtue through practice. By practicing being honest, brave, just, generous, and so on, a person develops an honorable and moral character.
What is Corporate Social Responsibility?
In today’s socially conscious environment, employees and customers place a premium on working for and spending their money with businesses that prioritize corporate social responsibility (CSR). CSR is an evolving business practice that incorporates sustainable development into a company’s business model. It has a positive impact on social, economic and environmental factors.
Pros and Cons of Corporate Social Responsibility
While most concerns regarding corporate social responsibility are directed at corporations of very large sizes, it is known that even small and medium-sized businesses participating in environmentally problematic industries and employing a huge number of local residents can still face the pressure to adopt the policy. To know the significance of CSR, let us take a look at its pros and cons.
Trends In Corporate Social Responsibility
As pressure is added by consumers seeking to make more responsible choices and by the constraints of ever-dwindling natural resources, more companies are incorporating sustainable strategies and adopting more socially responsible practices. The top trends in the area of corporate social responsibility include increased transparency, investment in green technologies, local community and employee engagement, and recognition of economic inequality.
Importance of Corporate Governance in Business Ethics
In this 5-minute video, Terry Clark Ph.D. discusses the Importance of Corporate Governance in Business Ethics with O.C. Ferrell Ph.D.
International Business Ethics
Globalization diminished the barriers between countries on the globe and also called for universalization of values for trade to occur smoothly. Universal values were perceived to control the behavior in the commercial space. This lead to ethical issues in the international business perspective, those that were unknown to date.
Ethics in International Business
Watch Professor Michael Czinkota and Professor Charles Skuba’s thoughts on “Ethics in International Business”.
“What matters is context and we have learned that business is not the end of it all; it’s not the only pot at the end of the rainbow. Business is one component of societal development…” — Professor Michael Czinkota, Georgetown University
What's The Difference Between Compliance And Ethics?
I’ve noticed some confusion about the roles that ethics and compliance play in organizations. This confusion arises, in part, from the way these two fields are identified. Some companies have only a compliance department. Others have a compliance and ethics (or ethics and compliance) department. Some companies have a Chief Ethics Officer separate from compliance.
What is Ethical Leadership in Business?
The ethical leader understands that positive relationships are the gold standard for all organizational effort. Good quality relationships built on respect and trust—not necessarily agreement, because people need to spark off each other—are the single most important determinant of organizational success. The ethical leader understands that these kinds of relationships germinate and grow in the deep rich soil of fundamental principles: trust, respect, integrity, honesty, fairness, equity, justice and compassion.
Business Ethics Laws and Regulations
It means more than merely following the letter of the law, because laws can always be changed, but instead following the codes of conduct developed through a culture’s religious beliefs, philosophies, and even the special requirements of specific professions. Ethics are a reflection of the principle held by most individuals that regardless of whether an act or thought is either always good or always bad, or if they are relative, depending upon a situation, as human beings we have the ability to perform in a way that is right.
What is the Sarbanes-Oxley Act?
The legislation came into force in 2002 and introduced major changes to the regulation of financial practice and corporate governance. Named after Senator Paul Sarbanes and Representative Michael Oxley, who were its main architects, it also set a number of deadlines for compliance.
What You Can Do to Improve Ethics at Your Company
Enron. Wells Fargo. Volkswagen. It’s hard for good, ethical people to imagine how these meltdowns could possibly happen. We assume it’s only the Ken Lays and Bernie Madoffs of the world who will cheat people. But what about the ordinary engineers, managers, and employees who designed cars to cheat automotive pollution controls or set up bank accounts without customers’ permission? We tell ourselves that we would never do those things. And, in truth, most of us won’t cook the books, steal from customers, or take that bribe.
The Future of Business Ethics
After decades of investing in compliance and ethics, the corporate world nonetheless finds itself confronting challenges that can pose existential reputational risk. Companies face ever-louder calls to adopt and enforce ethical business practices. Despite a growing focus on organizational culture, many still compartmentalize their efforts. No single department can own responsibility for installing and maintaining an ethical culture in an organization. Human resources, ethics and compliance, and sustainability teams need to work toward common goals and values set by a corporation’s senior leadership.
Three Major Challenges for Business and Economic Ethics
Given the enormous changes in the ways we will live together on the planet Earth, business and economic ethics, with its considerable developments since the 1980s, is called to ask itself what major challenges lay ahead for it in the next ten years. It seems three major challenges have emerged with increasing clarity, urgency, and importance. They concern all levels of business, from the personal to the organizational and the systemic level and likely will become even more important in the future.
Common Ethical Issues in the Workplace
Unethical practices spurred more than half of the largest bankruptcies in the past 30 years, like Enron, Lehman Brothers, and WorldCom, and can take a larger economic toll, estimated at $1.228 trillion, according to the Society for Human Resource Management.
These numbers suggest you’ll likely encounter ethical dilemmas in your workplace. Here are five ethically questionable issues you may face in the workplace and how you can respond.
Building Business on Character Ethics
What are the foundations of a successful business? Kevin Byrne shares lessons from his own experience, explaining the importance of vision and values. He would always start with the end in mind, nurturing people instead of growing business. After a huge storm in the UK in the late ’90s, Kevin Byrne started a company Checkatrade to help people avoid cowboy builders. He built his company from scratch and today, he is one of the leading entrepreneurs in the UK, and one of the bearers of the Olympic torch in London 2012.
Best Practices for a Successful Ethics and Corporate Compliance Program
A strong Ethics and Corporate Compliance Program has become a need for every regulated organization. In addition to ensuring compliance to various regulations, such a program helps organizations to proactively identity risks, improve ethical behavior within the organization and become audit-ready.
How to Write a Code of Ethics for Business
A code of ethics is a collection of principles and practices that a business believes in and aims to live by. A code of business ethics usually doesn’t stand alone, it works in conjunction with a company’s mission statement and more specific policies about conduct to give employees, partners, vendors, and outsiders an idea of what the company stands for and how it’s members should conduct themselves.
Ethical Business Practices: Cadbury Schweppes Case Study
Ethics concern an individual’s moral judgments about right and wrong. Decisions taken within an organization may be made by individuals or groups, but whoever makes them will be influenced by the culture of the company. The decision to behave ethically is a moral one; employees must decide what they think is the right course of action. This may involve rejecting the route that would lead to the biggest short-term profit.
Please note this article has 4 pages.
Ethics As A Risk Management Strategy
This article addresses the connection of ethics to risk management, and argues that there are compelling reasons to consider good ethical practice to be an essential part of such risk management. That connection has significant commercial outcomes, which include identifying potential problems, preventing fraud, the preservation of corporate reputation, and the mitigation of court penalties should any transgression arise. Information about the legal position, examples of cases, and arguments about the potential benefits of ethics are canvassed. The orientation of this article is essentially Australian. It is hoped that it may provide some insights of value to other
Coca Cola's Ethical Business Code of Conduct
Coca Cola are committed to building an ethical business culture throughout the entire Coca-Cola system. To ensure they conduct their business with honesty and integrity, their starting point is to comply with all anti-corruption laws of every country in which they operate.
Further Reading: Best Books About Business Ethics
Business Ethics: Best Practices for Designing and Managing Ethical Organizations. This book focuses on how to create organizations of high integrity and superior performance. Author Denis Collins shows how to design organizations that reinforce ethical behavior and reduce ethical risks using his unique Optimal Ethics Systems Model that outlines how to hire and train ethical employees, make ethical decisions, and create a trusting, productive work environment.
Business Ethics: Contemporary Issues and Cases. The future of the free market depends on fair, honest business practices. Business Ethics: Contemporary Issues and Cases aims to deepen students’ knowledge of ethical principles, corporate social responsibility, and decision-making in all aspects of business. The text presents an innovative approach to ethical reasoning grounded in moral philosophy.
The Business Ethics Field Guide: The Essential Companion to Leading Your Career and Your Company to Greatness. In this book, the authors propose a third set of skills that are often neglected but are just as essential for effective leadership: the ability to clarify individual and organizational values and to find a way forward when these values conflict. This book will help you develop those skills and apply them in your organization to become a better leader.
Business Ethics: Ethical Decision Making & Cases. Packed with cases, exercises and simulations, this applied approach uses a proven managerial framework to address overall concepts, processes and best practices associated with top business ethics programs. You clearly see how to integrate ethics into key strategic business decisions.
Business Ethics: A Stakeholder and Issues Management Approach. This is a pragmatic, hands-on, up-to-date guide to determining right and wrong in the business world. Joseph Weiss integrates a stakeholder perspective with an issues-oriented approach so students look at how a business’s actions affect not just share price and profit but the well-being of employees, customers, suppliers, the local community, the larger society, other nations, and the environment.
Further Learning: Best Courses About Business Ethics
Global Impact: Business Ethics. Global business ethics is the study and analysis of how ethics and global business are connected. How we should treat each other and our organizations in global and local contexts is the topic of this course. Business ethics and corporate responsibility are inherent in global commerce. Commerce is about markets, and markets entail exchanges between people and groups of people.
Business Ethics: How to Create an Ethical Organization. Describe best practices for screening job candidates for ethics. Utilize best practices for managing ethics codes. Use a systematic ethics decision-making framework to arrive at moral conclusions. Conduct ethics and diversity training workshops. Create an ethical reporting system.