What is Business Ethics ?

Business ethics is a code of behaviour which suits in specific business situation. It concerns the critical and structured test of the principal, values and standards that the business world follows. It refers to the morals and values in a business should ideally and fairly run.

Types of Business Ethics

1. Descriptive Ethics :- It is concerned with observing existing modalities within communities in a precise manner. It test ethics from views of individuals who are in practice and is a value free approach.

2. Meta Ethics :-  It is oriented with how ethical judgement are significant, aim to properties, statement, attitudes and how they may be safeguarded. It appeals to the logical, semantic and pragmatic structure of ethico – moral system.

3. Normative Ethics :- It is popularly known as Perspective Ethics. This branch decides how things in a business environment ought to be, how to value them, differentiating between good and bad elements.

a. Applied Ethics :- It concerns with use of ethics to particular and controversial real world moral issues like animals rights, abortion etc.

-Social Ethics

-Personal Ethics

b. Fundamental Ethics :- This branch paves a path of ethical thoughts and views towards moral judgements.

Significance of Business Ethics

1. Building stakeholder confidence :- business ethics ensure that its stakeholders receive fair treatment and considerations so a trust factor gets developed.

2. Harmoniuos Organisational culture– business ethics builds harmony among colleagues, clients and others in the business which promotes teamwork and well-being of the enterprise.   

 3. Help stop business malpractices – a strong ethical influence in business helps avoid malpractices in business like black-marketing, product alteration, etc.

Business Ethics Principles 

These principles provide a guide to resolve ethical issues that codes of ethics might miss out to provide. The ethical principles also provide a guideline according to which ethical dilemmas may be analysed. 

The best example of business ethics is the trust worthiness and transparency among the stakeholders and management of an enterprise. 

Relation Between Business Ethics and Corporate Governance

Business ethics and corporate governance must go hand in hand. The more an organisation abides by ethics, the better it is and keeps getting better too. 

With the emergence of the Sarbanes-Oxley Act and the setting up of various committees to ensure corporate governance has become an obligation for the enterprises in the corporate world. 

However, where the law does not apply, the value and importance of ethics remains considerably same. 

Role of Ethics in Corporate Governance 

1. Honesty and integrity – the members of an organisation are expected to behave fairly and in absolute upright manner to avoid conflicts in the organisation. 

2. Protect confidentiality – the stakeholders of an organisation are supposed to protect some matters of business and keep them confidential. They must not disclose such matters unless agreed by all the members of the board. 

3. Maintain responsibility and care – the individuals of an ethical organisation always act with faith and responsibility avoiding mishaps and distortions in their relations.  

Such features of ethics in corporate helps in the smooth running of any business. 

 

Importance of Business Ethics in Management

1. Promoting trust – the top management must develop trust among themselves. The level of trust highly signifies the performance of the organisation. 

2. Empowering employees – the top management should always motivate their employees and let them suggest measures in problem solving decisions. This promotes relations and well-being in the organisation. 

3. Building open communication – open communication culture in an organisation reduces class difference, boosts confidence and morale of all members of the organisation and stimulates healthy growth. 

Ethical issues in Business

1. Harassment and discrimination in workplace – this includes problems like racism, gender biasness and unequal pay at the workplace. 

2. Health and safety in workplace – this includes absence of safe measures while working in factories or sites.

3. Social media rants – trolling or bullying colleagues about their opinions on social media or embarrassing them on social media platforms.

Addressing Ethical issues in Business

The primary responsibility starts with the top management to avoid such issues. They must set proper rules and take care if they are followed. 

Secondarily, on the part of the employees facing trouble, they must communicate such issues to the concerned management to avoid such mishaps in future.