BUSINESS ETHICS

By Sue Newell

Summary:
Business ethics focuses on identifying the moral standards of right and wrong as they apply to behavior within and across business institutions and other related organizations. Corporations sometimes behave unethically, having a harmful effect on people or the environment. Unethical behavior is typically not caused by a single bad apple, but is a result of complex interactions between individuals, groups, and organizational cultures.

Ethical behavior can be defined either as behavior that maximizes happiness and minimizes harm or as behavior that is motivated by principles of duty.
While behaving unethically may have some short-term benefit for a company, in the long term it will harm stakeholder support.

Business Ethics: Business ethics (also corporate ethics) is a form of applied ethics or professional ethics that examines ethical principles and moral or ethical problems that arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and entire organizations.

Common Ethical problems: Human Resource Problems Conflicts of interests. Customer confidence Use of corporate resources Use of the worlds environmental resources

Account for ethical and unethical behavior: Decision making context Group thinking Change of ethical climate Three general approaches towards corporate responsibility: Social obligation Social responsiveness Social responsibility

Ethical Dilemma: Sometimes it is clear that a business has behaved unethically For example, a corporation may want to build a new factory on a previously undeveloped and popular tourist site in a location where there is large-scale unemployment among the local population.

Why behaving Ethically is important? 1. What will happen when the action is discovered. 2. Is the decision really in the long term interests of the corporation 3. Will organizations that behave unethically attract the employees they need.

Making it happen: While the two approaches to evaluating behavior described above are clearly different, they can be integrated to create a checklist that will help an individual or group make sound ethical decisions. Gather the facts: What is the problem, and what are the potential solutions? Define the ethical issues. This is a step that is often neglected, so that the ethical dilemmas raised by a particular decision are never even considered. Identify the various stakeholders involved. Think through the consequences of each solution: What happiness or harm will be caused? Identify the obligations and rights of those potentially affected: What is my duty here? Can I uphold my duty to avoid doing harm and make reasonable efforts toward that end? Check your gut feeling. The last step is crucial. Those involved need to ask themselves what they would feel like if friends or family found out they had been involved in making a particular corporate decision, whether personally or collectively.