l4

• Every day, managers and business owners make business decisions based on what they believe to be right and wrong. Through their actions, they demonstrate to their employees what is and is not acceptable behavior and shape the moral standard of the organization. Personal and professional ethics are important cornerstones of an organization and shape its ultimate contributions to society in the form of corporate social responsibility.
• Governments use laws and regulations to point business behavior in what they perceive to be beneficial directions
• business ethics are standards of behavior that businesses should uphold, whereas business law is a body of laws that businesses must follow).
• Business ethics implicitly regulates behavior that lies beyond governmental control. Business ethics refers to contemporary standards or sets of values that govern the actions and behavior of individuals in the business organization and the actions of the business itself.
• Corporations and professional organizations, particularly licensing boards, will usually have a written “Code of Ethics” that governs standards of professional conduct expected of all in the field.
• Individual and Corporate Ethics

  As the definition of business ethics above suggests, business ethics is a broad term that applies to the behavior of the individuals who work at a business as well as the actions of the business itself.
• Business ethics (also known as corporate ethics) is a form of applied ethics or professional ethics, that examines ethical principles and moral or ethical problems that can arise in a business environment. Corporate ethics express the values of an organization to its internal and external stakeholders.
• Company Codes of Ethics and Codes of Practice

  1. Corporate Code of Ethics
  2. Code of Practice
• Corporate Code of Ethics. A code of ethics begins by setting out the values that underpin the code and describe a company’s obligation to its stakeholders. The code is publicly available and addressed to anyone with an interest in the company’s activities and the way it does business. It includes details of how the company plans to implement its values and vision, as well as guidance to staff on ethical standards and how to achieve them. It is hoped that having such a policy will lead to greater ethical awareness, consistency in application, and the avoidance of ethical disasters.
• Code of Practice. A code of practice is adopted by a profession or by a governmental or nongovernmental organization to regulate that profession. A code of practice may be styled as a code of professional responsibility, and it will discuss difficult issues, difficult decisions that will often need to be made, and provide a clear account of what behavior is considered “ethical” or “correct” or “right” in the circumstances.
• Values and ethics in simple words mean principle or code of conduct that govern transactions, in this case business transaction. These ethics are meant to analyze problems that come up in day-to-day course of business operations.
• Business houses with deeper pockets crush small operators and markets are monopolized. In such scenario certain standards are required to govern how organizations go about their business operations, these standards are called ethics.
• business ethics refers to the set of moral principles that govern the way companies and individuals engage in business activity. These principles govern every aspect of the company's operations, including its interaction with the government and other businesses, its treatment of its employees and its relationship with its customers. Whenever any ethical dilemmas or controversies arise, a business references these foundational principles to help resolve those situations.
• Business ethics ensure that a certain basic level of trust exists between consumers and various forms of market participants with businesses. 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.
• Social Issues Examples:

  • Racial discrimination

  • Gender Equality

  • Climate change

  • Mental health

  • Health care

  • Unemployment
• Corporate Responsibility examples:

  • Environmental Issues

  • Improving labor policies

  • Ethical practices

  • Philanthropic Initiatives (include donating money, products, or services to disaster relief efforts; employees volunteering their time to social causes)
• Principles of Business Ethics

  • Leadership
  • Accountability
  • Integrity
  • Respect for others
  • Honesty
  • Respect for laws
  • Responsibility
  • Transparency
  • Compassion
  • Fairness
  • Loyalty
  • Environmental concern
• Leadership: The conscious effort to adopt, integrate, and emulate the other 11 principles to guide decisions and behavior in all aspects of professional and personal life.
• Accountability: Holding yourself and others responsible for their actions. Commitment to following ethical practices and ensuring others follow ethics guidelines. Employees who exhibit honesty and integrity are able to admit their mistakes and hold themselves accountable.
• Integrity: Incorporates other principles—honesty, trustworthiness, and reliability. Someone with integrity consistently does the right thing and strives to hold themselves to a higher standard.
• Acting with integrity not only helps show employers you are capable of handling responsibilities that can advance your career, it also helps foster a positive company culture.

  • Show up ready to work

  • Be respectful during conflicts

  • Follow and enforce company policies

  • Improve your work ethic

  • Respect property
• Respect for others: To foster ethical behavior and environments in the workplace, respecting others is a critical component and Treating others with respect is a core principle in business ethics. Everyone deserves dignity, privacy, equality, opportunity, compassion, and empathy.
• Showing respect includes:

  • Listening to clients and coworkers with an open mind

  • Showing kindness and courtesy

  • Remaining polite even during disagreements

  • Refraining from personal attacks

  • Monitoring your nonverbal communication, including body language and facial expressions
• Honesty: Honesty requires a commitment to telling the truth, regardless of the consequences. It encourages trust among colleagues and between a business and the public. Everyone in an organization benefits from honesty.
• Respect for laws: Ethical leadership should include enforcing all local, state, and federal laws. If there is a legal grey area, leaders should err on the side of legality rather than exploiting a gap.
• Responsibility: Promote ownership within an organization, allow employees to be responsible for their work, and be accountable for yours. Being responsible in the workplace means taking ownership of your tasks. Responsibility includes thinking about how your actions can affect those around you and making

  choices that consider other people.
• Transparency: Stakeholders are people with an interest in a business, such as shareholders, employees, the community a firm operates in, and the family members of the employees. Without divulging trade secrets, companies should ensure information about their financials, price changes, hiring and firing practices, wages and salaries, and promotions are available to those interested in the business's success.
• Compassion: Employees, the community surrounding a business, business partners, and customers should all be treated with concern for their well-being. People who display compassion genuinely care about the well-being of others. In business, compassion can mean that organizations increase involvement in charitable causes and interpersonal interactions between colleagues. It involves taking the time to understand the thoughts and feelings of another person.
• Example of Compassion:

  • Motivate others. ...

  • Practice acts of kindness. ...

  • Allocate time to bond with friends and family. ...

  • Say encouraging words. ...

  • Share a hug or a handshake. ...

  • Incorporate the phrase “thank you” into your daily routine....

  • Offer to help someone with their to-do list.
• Fairness: Everyone should have the same opportunities and be treated the same. If a practice or behavior would make you feel uncomfortable or place personal or corporate benefit in front of equality, common courtesy, and respect, it is likely not fair.
• Fairness might encompass the following areas:

  • Hiring new employees

  • Promoting team members

  • Delegating tasks

  • Reviewing performance
• Loyalty: Leadership should demonstrate commitment to their employees and the company. Inspiring loyalty in employees and management ensures that they are committed to best practices. Loyalty means remaining faithful to business partners, coworkers and clients to demonstrate your commitment. This can extend to maintaining relationships with suppliers, sharing a promotion opportunity with coworkers in your department or honoring financial commitments to the

  community.
• Environmental concern: In a world where resources are limited, ecosystems have been damaged by past practices, and the climate is changing, it is of utmost importance to be aware of and concerned about the environmental impacts a business has. All employees should be encouraged to discover and report solutions for practices that can add to damages already done.
• Ethical business practices include making choices to limit or reduce your negative impact on the environment, such as:

  • Reducing carbon emissions from transportation and factories

  • Limiting trash and waste production

  • Encouraging energy-saving practices

  • Creating more sustainable, cost-saving strategies
• Business ethics


  A code of conduct that drives employee behavior—from executives to middle management to the newest and youngest employees
• Importance of business ethics


  • Establishes a reputation for ethical behavior
  • Leads to brand recognition and growth
  • Increased ability to negotiate
  • Increased trust in products and services
  • Customer retention and growth
  • Attracting talent
  • Attracting investors
• When all employees make ethical decisions, the company establishes a reputation for ethical behavior
• Primarily ethics in business is affected by three sources - culture, religion and laws of the state. It is for this reason we do not have uniform or completely similar standards across the globe.
• Religion has long been a driving force behind ethical behavior, providing individuals with a moral compass that guides their actions. In the business context, religious beliefs can shape the ethical decisions made by entrepreneurs, executives, and employees. Various religious traditions promote values such as honesty, compassion, and fairness, which can translate into ethical business practices.