Learning Outcomes
What is business ethics? In the simplest sense, business ethics is being able to identify the difference between right and wrong and then consciously choosing to do the right thing. Another way to define business ethics is written guidelines or standards used to hold a company accountable to moral actions and just decisions. Business ethics is an extremely valuable part of every company and can impact a company’s reputation and the community in which it serves. How companies choose to practice and enforce business ethics can differ from one company to the next, however, there is no denying that an ethical work environment is an essential key to success. This section will evaluate the role business ethics plays in the workplace and further explain why ethics are such an important component in business. Like organizational behavior, business ethics impact a company at three different levels. These levels are personal, professional, and organizational. Also similar to organizational behavior, the three levels are all linked together and each one influences the other two. Personal EthicsPersonal ethics are determined by each individual. Personal ethics may be determined by religious practices or how someone was raised. While professional and organizational guidelines may influence personal ethics, they are not one and the same. Personal ethics is the most diverse level of business ethics because each individual person has a different set of values and beliefs. Since personal ethics differ from person to person, professional and organizational ethics help to establish parameters and guidelines for individuals to follow in the workplace. Professional Ethics Training your employees can greatly increase their (and your!) understanding of ethical behavior in business. Professional ethics is the idea that individuals in their job field have extensive knowledge and experience which prepares them to work within certain industries. This training equips them to know business ethics standards for their line of work. For example, a doctor knows better than to violate HIPAA by sharing a patient’s medical information. And a teacher is taught to never be alone with a student. Neither of these examples may be something considered on a personal ethics level, however, they are expected on a professional level since their schooling and training has covered the information. Organizational EthicsLastly, an organization’s ethics are established and then implemented company wide. Organizational values are external indicators used to ensure a company is behaving ethically. However, the foundation of organizational values is grounded within the internal culture of the company. Organizational values can positively or negatively impact productivity, morale, the community, and the list goes on and on. So what are some examples of ethical issues? There are a wide range of company policies, behaviors, and practices that can fall into an ethical category. Let’s explore a few of them.
If not handled ethically, each of these categories can have a harmful effect on the community and the organization. It is also important to consider how each individual within the organization can have an impact on a company’s reputation. Establishing a code of ethics and training employees to fully understand the importance of making ethical decisions is essential to a successful company. We will explore how to implement these things in the upcoming sections. For now, let’s move onto the next section to explore recent ethical investigations. ReferencesAlton, Larry. “How Much Do A Company’s Ethics Matter In The Modern Professional Climate?” Forbes. September 12, 2017. Accessed April 10, 2019. https://www.forbes.com/sites/larryalton/2017/09/12/how-much-do-a-companys-ethics-matter-in-the-modern-professional-climate/. Contribute!Did you have an idea for improving this content? We’d love your input. Improve this pageLearn More
Business ethics is the study of appropriate business policies and practices regarding potentially controversial subjects including corporate governance, insider trading, bribery, discrimination, corporate social responsibility, and fiduciary responsibilities. The law often guides business ethics, but at other times business ethics provide a basic guideline that businesses can choose to follow to gain public approval.
Business ethics ensure that a certain basic level of trust exists between consumers and various forms of market participants with businesses. For example, a portfolio manager must give the same consideration to the portfolios of family members and small individual investors. These kinds of practices ensure the public receives fair treatment. The concept of business ethics began in the 1960s as corporations became more aware of a rising consumer-based society that showed concerns regarding the environment, social causes, and corporate responsibility. The increased focus on "social issues" was a hallmark of the decade. Since that time period, the concept of business ethics has evolved. Business ethics goes beyond just a moral code of right and wrong; it attempts to reconcile what companies must do legally versus maintaining a competitive advantage over other businesses. Firms display business ethics in several ways.
Business ethics are meant to ensure a certain level of trust between consumers and corporations, guaranteeing the public fair and equal treatment. Here are a few examples of business ethics at work as corporations attempt to balance marketing and social responsibility. For example, Company XYZ sells cereals with all-natural ingredients. The marketing department wants to use the all-natural ingredients as a selling point, but it must temper enthusiasm for the product versus the laws that govern labeling practices. Some competitors' advertisements tout high-fiber cereals that have the potential to reduce the risk of some types of cancer. The cereal company in question wants to gain more market share, but the marketing department cannot make dubious health claims on cereal boxes without the risk of litigation and fines. Even though competitors with larger market shares of the cereal industry use shady labeling practices, that doesn't mean every manufacturer should engage in unethical behavior. For another example, consider the matter of quality control for a company that manufactures electronic components for computer servers. These components must ship on time, or the manufacturer of the parts risks losing a lucrative contract. The quality-control department discovers a possible defect, and every component in one shipment faces checks. Unfortunately, the checks may take too long, and the window for on-time shipping could pass, which could delay the customer's product release. The quality-control department can ship the parts, hoping that not all of them are defective, or delay the shipment and test everything. If the parts are defective, the company that buys the components might face a firestorm of consumer backlash, which may lead the customer to seek a more reliable supplier. When it comes to preventing unethical behavior and repairing its negative side effects, companies often look to managers and employees to report any incidences they observe or experience. However, barriers within the company culture itself (such as fear of retaliation for reporting misconduct) can prevent this from happening. Published by the Ethics & Compliance Initiative (ECI), the Global Business Ethics Survey of 2021 surveyed over 14,000 employees in 10 countries about different types of misconduct they observed in the workplace. 49% of the employees surveyed said they had observed misconduct, with 22% saying they had observed behavior they would categorize as abusive. 86% of employees said they reported the misconduct they observed. When questioned if they had experienced retaliation for reporting, a whopping 79% said they had been retaliated against. Indeed, fear of retaliation is one of the major reasons employees cite for not reporting unethical behavior in the workplace. ECI says companies should work toward improving their corporate culture by reinforcing the idea that reporting suspected misconduct is beneficial to the company and acknowledging and rewarding the employee's courage for making the report.
Business ethics concerns ethical dilemmas or controversial issues faced by a company. Often, business ethics involve a system of practices and procedures that help build trust with the consumer. On one level, some business ethics are embedded in the law, such as minimum wage, insider trading restrictions, and environmental regulations. On the other hand, business ethics can be influenced by management behavior, with wide-ranging effects across the company.
Consider an employee who is told in a meeting that the company will face an earnings shortfall for the quarter. This employee also owns shares in the firm. It would be unethical for the employee to sell their shares since they would be subject to insider information. Alternatively, if two large competitors came together to gain an unfair advantage, such as controlling prices in a given market, this would raise serious ethical concerns.
Business ethics are important because they have lasting implications on several levels. With increased investor awareness on environmental, social, and governance issues, a company's reputation is at stake. For instance, if a company partakes in unethical practices, such as poor customer privacy procedures and protections, it could result in a data breach. This, in turn, may lead to a significant loss of customers, erosion of trust, less competitive hires, and share price declines. |
Which of the following is not a business level of ethics
Pos Terkait
Copyright © 2024 ketiadaan Inc.
