What is Business ethics
Business ethics
Ethics are important for every business, they are what steer a company in the right direction, and help it gain moral backing. Topics such as bribery, corruption, social obligations, etc come under the study of business ethics. These ethics protect the public and the environment from mistreatment and exploitation from corporations.
What is business ethics?
Business ethics definition: Business ethics is the study of appropriate models of behaviour for a company, and the integration of societal values in its practices. Whilst many ethical practices have legal guidelines, some of them don¡¯t. In these cases, business ethics gives the guiding framework for a company.
Importance of business ethics
Examples of business ethics
Company A selling flour markets its product as being 100% natural and farm-to-table. Company B selling flour markets its product by saying that it can prevent certain types of diabetes.
In order to retain a competitive edge, Company A can also make unreliable and doubtful claims. Doing so would not only amount to false advertising and break their trust with the public but also expose the company to lawsuits
A company that sells furniture found bedbugs in one of the beds in a warehouse. This means that they have to recall all furniture sent from that warehouse, do pest control, and find the cause of the bugs.
If the bugs originated because of a fault of the wood supplier, all wood supplied by them has to be recalled and checked. This process takes a lot of time and money.
Sometimes, this means that the company has to delay their product delivery. But, instead of incurring these costs, the company can simply send out all the other furniture, meet their delivery dates, and hope that only that one bed had bugs.
But this would be wrong, because they would be responsible for supplying bugs to the homes of their customers, inevitably lose customers, and be responsible for damages incurred by their retailers.
What are the disadvantages of business ethics?
A company¡¯s main goal is to earn profits. Following ethics limits the company's practices and thereby limits it from getting its maximum revenue. Moreover, ethical practices sometimes cost the company money.
But a little lost revenue is better than the exploitation of its members.
What are the major ethical issues that business faces today?
What characteristics ensure business ethics are effective?
Authenticity, inclusivity, and validity of norms ensure that business ethics are effective.
Authenticity- The company and its managers actually follow the ethics that they preach.
Inclusivity- Everyone in the company is responsible for upholding the ethics, not just the management
Validity- The norms describes are in tune with common ethical practices
Disclaimer: This content is authored by an external agency. The views expressed here are that of the respective authors/ entities and do not represent the views of Economic Times (ET). ET does not guarantee, vouch for or endorse any of its contents nor is responsible for them in any manner whatsoever. Please take all steps necessary to ascertain that any information and content provided is correct, updated and verified. ET hereby disclaims any and all warranties, express or implied, relating to the report and any content therein.
Ethics are important for every business, they are what steer a company in the right direction, and help it gain moral backing. Topics such as bribery, corruption, social obligations, etc come under the study of business ethics. These ethics protect the public and the environment from mistreatment and exploitation from corporations.
What is business ethics?
Business ethics definition: Business ethics is the study of appropriate models of behaviour for a company, and the integration of societal values in its practices. Whilst many ethical practices have legal guidelines, some of them don¡¯t. In these cases, business ethics gives the guiding framework for a company.
Importance of business ethics
- They ensure that everyone is treated fairly and equally
- They protect the public and the environment from mistreatment and exploitation
- They help build a healthy and trusting relationship with the community
- They help a company in conducting moral practices
- They help find a middle ground between what businesses are legally required to do and staying competitive
Examples of business ethics
Company A selling flour markets its product as being 100% natural and farm-to-table. Company B selling flour markets its product by saying that it can prevent certain types of diabetes.
In order to retain a competitive edge, Company A can also make unreliable and doubtful claims. Doing so would not only amount to false advertising and break their trust with the public but also expose the company to lawsuits
A company that sells furniture found bedbugs in one of the beds in a warehouse. This means that they have to recall all furniture sent from that warehouse, do pest control, and find the cause of the bugs.
If the bugs originated because of a fault of the wood supplier, all wood supplied by them has to be recalled and checked. This process takes a lot of time and money.
Sometimes, this means that the company has to delay their product delivery. But, instead of incurring these costs, the company can simply send out all the other furniture, meet their delivery dates, and hope that only that one bed had bugs.
But this would be wrong, because they would be responsible for supplying bugs to the homes of their customers, inevitably lose customers, and be responsible for damages incurred by their retailers.
What are the disadvantages of business ethics?
A company¡¯s main goal is to earn profits. Following ethics limits the company's practices and thereby limits it from getting its maximum revenue. Moreover, ethical practices sometimes cost the company money.
But a little lost revenue is better than the exploitation of its members.
What are the major ethical issues that business faces today?
- Harassment and Discrimination
- Safety in the Workplace
- Whistleblowing
- Ethical Accounting Practices
- Technology and Privacy Practices
What characteristics ensure business ethics are effective?
Authenticity, inclusivity, and validity of norms ensure that business ethics are effective.
Authenticity- The company and its managers actually follow the ethics that they preach.
Inclusivity- Everyone in the company is responsible for upholding the ethics, not just the management
Validity- The norms describes are in tune with common ethical practices
Disclaimer: This content is authored by an external agency. The views expressed here are that of the respective authors/ entities and do not represent the views of Economic Times (ET). ET does not guarantee, vouch for or endorse any of its contents nor is responsible for them in any manner whatsoever. Please take all steps necessary to ascertain that any information and content provided is correct, updated and verified. ET hereby disclaims any and all warranties, express or implied, relating to the report and any content therein.
