Business Ethics
This study guide is about Business Ethics as it applies to business organizations. It focuses on the application of ethics within a corporation. This guide excludes Ethics theory. Ethics theory or philosophy is an important field of study and involves a noble discussion of virtues, values and beliefs. Business ethics, by contrast, is operational and tactical since corporations are regulated by law. The study of business ethics is one of the most important topics for business students. It transcends all other disciplines (marketing, operations, finance, human resources, public relations etc.).
Ethics is a serious business subject:
Business media has a continuing series of news stories about unethical business practices;
Business schools are offering more courses on the subject;
Companies are starting to get the message that Business Ethics matter to their reputation and ultimately to earnings.
The Study Guide covers some of the ethical disasters and the extensive losses they caused for employees and stockholders. It also describes examples of good ethical practices and it provides guidelines for effective ethics. Guide topics include discussions of concepts such as tone at the top , corporate culture and the problems with trying to legislate ethics.
This Guide is targeted at business students who need to understand why studying ethics is important for business success. Studying business ethics topic will enhance your personal and professional reputation. I wish you the best in your studies and your career.
An Introduction to Business Ethics
A simple definition of business ethics is Ethics is always making the honest decision when no one is looking. This is OK but I thought something more substantial is needed. According to (Wiley 1995),
In essence, good ethics is good business. Sound business practices are a result of moral or ethical business decisions. Corporate ethics reflects not only the content of moral decisions (what should I do?), but also the process of decision making, or the "hows." In such a decision-making process, a firm must be committed to the extent that ethics and profits are not mutually exclusive in principle and practice.
Ethics in business matters is complex and starts at the top of the organization with the Board of Directors who establish corporate policy on ethics. It then cascades throughout the company and affects all employees. Business ethics is the application of analysis and assessment of how decisions in the business enterprise should be made according to moral principles.
Business organizations face increasingly complex decisions due to unprecedented changes in global markets, technology, new products and services, and changing demographics. Good Business Ethics is vital to ensuring that the business enterprise functions effectively with its stakeholder groups and that it remains a viable organization.
In the first decade of this century there were two financial failures that focused the need for ethical business practices. The first is the bankruptcy of large companies such as Enron, Worldcom and Tyco. The second is the World Financial Crisis of 2007/2008. Both resulted in new laws, first Sarbanes-Oxley then Dodd-Frank. These laws include wide-ranging financial regulations that require business compliance.
Neither law is a solution for unethical behavior. Instead of laws, companies need to use several methods, such as those outlined in this eBook, to develop effective business practices. This eBook also has examples of company practices for making sure that ethical practices exist.