The Nature of Ethics and Business Ethics

Ethics talks about how we behave and how we should behave as human
beings different from animals, plants and other known creatures. It is a
subject that reiterates and validates our authentic human-ness and
humanity. It makes us realize again that man is a free creature endowed
with intellect and rationality. And from these unique human features that
our capacity to think, reason out, choose, and decide flows abundantly.

Morality pertains to the rightness or wrongness of an act while ethics is the

discipline that studies morality. Hence, morality is the object of study while
ethics is the field where the object is being studied.

What is Business Ethics?

Ethics is the discipline that investigates the rightness or wrongness of human
actions. When this discipline is used to explore the rightness or wrongness of
business activities and the conduct of the businesspersons and professionals,
then it is called Business Ethics. Here are some textbook definitions and
description of Business Ethics,
1. In its simplest form, business ethics can be defined as a systematic
study of ethics as applied to the issues arising in business.
2. Business ethics is the study of good and evil, right and wrong, and just
and unjust actions in business.
3. Business ethics involves the application of standards of moral
behavior to business situations.
4. Business ethics is concerned with good and bad or right and wrong
behavior and practices that take place within a business context.
Concepts of right and wrong are increasingly being interpreted today
to include the more difficult and subtle questions of fairness, justice,
and equity.
5. Business ethics is the study of moral standards and how these apply
to the social system and organizations through which modern societies
produce and distribute goods and services and to the behaviors of the
people who work within these organizations. Business ethics, in other
words, is a form of applied ethics.

Ethics is generally subdivided into three sub-fields: metaethics, normative

ethics, and applied ethics.

Metaethics focuses mainly on the investigation of the sources of our ethical

principles.
Normative ethics attempts to come up with those ethical principles that we
can use to judge whether our actions are right or wrong.
Applied ethics investigates morally debatable issues such as death penalty,
the use of artificial contraceptives, euthanasia, and others.

Corporate Social Responsibility

1. Social responsibility, therefore, refers to a persons obligation to
consider the effects of his decisions and actions on the whole social
system. Business men apply social responsibility when they consider
the needs and interests of others who may be affected by business
actions. In so doing, the look beyond their firms narrow economics and
technical interests.
2. The concept of CSR refers to the general belief held by many that
modern businesses have a responsibility to society that extends
beyond the stockholders or investors in the firm.
3. A concept whereby companies integrate social and environmental
concerns in their business operations and in their interaction with their
stakeholders on a voluntary basis.
4. Describes how companies integrate social, environmental and ethical
concerns into the business decision-making process and their
interactions with stakeholders on a voluntary basis.
5. It refers to the approach that an organization takes in balancing its
responsibilities toward different stakeholders when making legal,
economic, ethical, and social decisions.

The stockholder model of a corporation attributed to Milton Friedman

views the responsibilities of business as being threefold economic, legal,
and ethical responsibilities.

5 Dimensions of CSR by Alexander Dahlsrud

1. Environmental dimension pertains to many CSR definitions direct
assertion of concern for the natural environment.

2. Social Dimension points to the aspect of CSR wherein the business is

conscious of its impact to the communities.
3. Economic dimension pertains to the emphasis on preserving the
economic viability or profitability of the business organization.
4. Stakeholder dimension emphasizes the importance of how other
stakeholders such as employees, suppliers, and customers are fairly
and justly treated.
5. Voluntariness dimension speaks of the CSR programs as going
beyond the requirements of the law and as being motivated by ethics
and values.