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.
Unlike a code of conduct which is generally "do this or else” in tone, a code of ethics will usually be predominantly aspirational and supportive. The code illustrates how a company's values translate into concrete policies, procedures and standards.
Values – to embed a set of ethical values into the organisation’s goals and strategies and the way it seeks to do what it does
Ethical behaviour - to provide guidance and support to staff for making decisions and carrying out their work in a way that is compatible with the organisation’s ethical values and standards
Corporate Culture – to consolidate and strengthen a culture of integrity and openness so as to facilitate a sustainable business
Risk – to minimise operational and integrity risks
Reputation – to enhance trust among stakeholders so as to facilitate business success
Sustainability – to minimise the organisation’s negative impacts on and maximise its positive contribution to the social, economic and environmental wellbeing of wider society
UN Global Compact enjoins business firms to support and respect internationally recognized human rights, avoid complicity in human rights abuses, uphold freedom of association and collective bargaining, eliminate forced and compulsory labor, eliminate child labor, eliminate all forms of discrimination in employment, support a precautionary approach to environmental challenges, promote greater environmental responsibility, encourage the development of environmentally friendly technologies, and work against corruption in all its forms, including extortion and bribery.
United Nations' Universal Declaration of Human Rights or, more recently, the United Nations Global Compact, is advanced as a guide to conduct.
adopting host country norms is a way to respect the host culture and its members. Thus, business persons are advised that when in Rome they ought do as the Romans do—as in etiquette, so too in ethics. On the other hand, business persons are advised to resist host country norms that are morally repugnant.
A business will react accordingly to its moral guidelines and principles if the owners and executives do not lose sight on the essential value of fairness. However, if they choose to use legality and profitability as their measurement in determining what is right from wrong then business ethics will surely becomes irrelevant.
Everyone will always have their own concept of righteousness; therefore a one definition of business ethics can be difficult.
Doing business transnationally raises a number of issues that have no analogue in business dealings done within a single country or legal jurisdiction.
a business firm ought to be managed in a way that achieves a balance among the interests of all who bear a substantial relationship to the firm—its stakeholders.
Ethical behavior is merely making good business decisions based on an established "code of ethics". Entrepreneurs should establish a written code of ethics that can serve as a framework for decisions to be made by the entrepreneur as well as the employees.
The entrepreneur is the role model for employees. If your behavior includes lying to customers, taking money out of the cash register, or taking home some of the inventory or supplies, you cannot be surprised if your employees follow your lead.
A reputation for ethical decisions builds trust in your business among business associates and suppliers. Strong supplier relationships are critical to a successful business. Consider the problems you might have if you could not supply what the customer needs...at the time that they need it.
A morally responsible company must pay special attention to product safety, environmental impact, truthful advertising, scrupulous marketing, and humane working conditions.
In theory, a business could address these three concerns by assigning corporate attorneys and public relations experts to escort employees on their daily activities. Anytime an employee might stray from the straight and narrow path of acceptable conduct, the experts would guide him back.
(1) avoid breaking the criminal law in one’s work-related activity; (2) avoid action that may result in civil law suits against the company; and (3) avoid actions that are bad for the company image.