Business Ethics Definition business ethics

The Defense Industry Initiative on Business Ethics and Conduct was created to support corporate ethical conduct. This era began the belief and support of self-regulation and free trade, which lifted tariffs and barriers and allowed businesses to merge and divest in an increasing global atmosphere. Chron recommends a policy that impacts how employees speak with customers, the way in which products are advertised and described, and the times of day that potential customers can be contacted. This prohibits employees from lying to clients or purposefully misleading them in order to attract new customers or to attain a sale.

  • ] to identify the company’s expectations of workers and to offer guidance on handling some of the more common ethical problems that might arise in the course of doing business.
  • The nature and concept of Ethics, we can say that Business Ethics is nothing but the application of Ethics in business.
  • Building on a foundation of ethical behavior helps create long-lasting positive effects for a company.
  • Managers should manage only in the interests of the shareholders and shareholders should be put in the position where they decide how their wealth and resources will be used.
  • Business ethics are observed by a businessman because of the consequences that would result due to their non-compliance.

It is a person’s own attitude and beliefs concerning good behaviour. Ethics reside within individuals and as such are defined sep­arately by each individual in his/her own way. The history of Ethics goes back to 1970’s when the term Business Ethics was commonly used. Increasingly unethical conduct was found by corporations during the 1960s. To counter this, corporations developed social responsibility programmes which included charitable donations and funding local community projects.

Functional Business Areas

All the behaviour and activities should be based on values and service motive in business. – This principle is based on inner-feeling of persons to analyse the sense of right and wrong. On this basis the businessmen can determine different roles and behaviour at their levels.

Ethics of property rights begins with recognizing the vacuous nature of the notion of property. Interest in business ethics accelerated dramatically during the 1980s and 1990s, both within major corporations and within academia. For example, most major corporations today promote their commitment to non-economic values under headings such as ethics codes and social responsibility charters.

Characteristics And Features Of Business Ethics

‘Be kind to people’ are taught and reinforced in schools, religious institutions and social groups. As we grow in years, we often seek environments that are compatible with the values we learned as children. Infact, peoples’ values develop as a product of the learning and experience they face in the cultural setting in which they live. Value differences basically arise because learning and experiences differ from one person to another.

Since history shows that neither regulated nor unregulated firms always behave ethically, neither regime offers an ethical panacea. Rules and regulations surrounding ethical practices are often inspired by personal and business ethics held by the owner. The ethics code is about doing the right thing and treating people how you’d like to be treated yourself.

Business ethics promote teamwork and cooperation since all employees are expected to act in the same respectful manner. Moreover, when employees know supervisors’ expectations they perform better in their jobs. A value chain is a business model that describes all of the activities that a business employs to create a product or service.

However, at most times, profit maximisation and discharging of social responsibilities at the maximum limit, cannot be carried on simultaneously. For example, Concern for Task and Concern for Human Beings are bound to pull each other in opposite directions. Typically, employees are more comfortable working for companies that do business in an ethical manner.