What Is Business Ethics And How Are They Developed?

Business ethics deals with the moral issues related to how the business is conducted and its social, financial and environmental implications. The question of what is right and what is wrong based mainly on one's priorities and one's obligations to the society within the framework of the business are the main issues dealt with in this field.

Companies following business ethics aim to make full use of their potential and making their presence felt in the corporate world but at the same time remaining within the framework of the laws by not indulging in activities like espionage, misleading reports and the like.

The basic mantra is that one can achieve a lot without resorting to unfair means which in the long term may in fact lead to disastrous consequences. There are different areas of business ethics involving different fields the well known being sales and marketing related to issues like price fixing and production dealing with issues like use of inferior grade material to produce goods that may be later marketed as high quality ones.

Business ethics are the level of integrity, behaviors, codes and standards that a business operates by.

The recent phone hacking scandal by the News of the World newspaper in the UK illustrates how dubious business ethics can eventually cause a business to crumble. This newspaper was so huge and powerful that it thought it could get away with activities that were not only unethical but also illegal. They lost sight of what is right and wrong, strayed off the path and lost all credibility to the extent that Murdoch realised he had to close down the paper altogether. 

Ethics don't just apply to what's legal or not. Sometimes a businesses decision or activity may be inside the law but they know it has damaging side affects. For instance, cigarette manufacturers are operating inside the law but selling a product that kills millions of people. Does the fact that people want to buy them make it ethical? Is it ethical for cosmetics companies to test their products on animals? Is it ethical for chicken farmers to keep 10 chickens in a small cage?

All businesses must decide their own level of integrity and ethics but the chances are that it is less likely to come back and haunt you later if you set high standards for your business and Rupert Murdoch's current woes are a timely reminder. He has spent a lifetime building his empire only to see it potentially topple because he didn't insist on strong business ethics throughout his business.

For more information on why ethics in business are important go to www.business-coaching-insights.com/ethics-in-business.html

Maria started her delivery business a year ago and has been doing very well. About a month ago, she was asked by her best friend to make an urgent delivery to someone. They agreed that the delivery will take place the following day. Later that day Maria got a call from a large company. This company wanted to contract her for the next two weeks. The money was good and Maria was very excited. But what about the urgent delivery to her best friend? She could not do both deliveries. She had already given her word to her friend that she will do the job the following day.
Clearly, the best business decision would be to take on the two week contract. But what about the ethical decision? If her business did poorly or Mary couldn't provide enough support, the business would suffer. As a result, her family would suffer. Money was already tight, what with two boys in school. And yet she knew her best friend depended on her delivery the next day.
 
Obviously, Maria had a problem - an ethical problem. Should she do the delivery to her friend (to whom she'd already given her word) or should she take the two week contract? Questions like these touch on our deepest values. Depending on who you would ask, you would get strong arguments for both decisions. This is what we mean when we talk about "grey area". So what is the answer?
 
This story illustrates the question of ethics. Business ethics are a hot topic these days. With everything from fraud to employee theft on the rise, it is no wonder that businesses are beginning to focus on the impact of ethical leadership. But along with this new focus comes a lot of "grey area". Many times, managers are forced to decide on issues where there are arguments on both sides - a problem that makes ethical decision-making very difficult.