Business Ethics is the type of applied ethics or professional ethics, which helps to analyze the ethical hurdles that an organization has to face because of the type of organizational/business environment it exhibits. It governs and examines all the business conducts that happen including individual and group conduct. Several principles, i.e. honesty, integrity, promise-keeping, trustworthiness, loyalty, fairness, concern/respect for others, law-abiding, etc. Work in coordination to develop business ethics.
An ethical business manages to have a positive influence on the worth of the variety of components that are more likely to affect the company’s overall goodwill that includes its brand image, human resources, and customer relations. The most important asset of a business is its customers. Hence, organizations need to realize that building long-term loyal relationships with their customers should be the main goal. As for the business, the customers will benefit them throughout a lifetime.
Moral Standards & Issues
Moral standards are the norms that we have about the actions which we categorize as being morally right or wrong. Together with the values, we associate with the subject matter (the actions; either morally right or wrong). They point to human qualities relating to how people live together in harmony and peace. Providing an outline of values that provide benefits or harms to a larger group than an individual only. These moral standards originate throughout an individual’s life.
From childhood, as a part of our upbringing, are absorbed by the family (heritage and legacy), friends, and the societal institutes they have ever been a part of. Later in life, experiences, learning, and intellectual development help an individual to form these standards. Hence, these standards are not established or changed by authoritative bodies. They are valid upon the adequacy of the reasons that support and justify them so, they are valid till their supportive reasons remain adequate.
Relation of Business Ethics & Moral Standards
Business decisions require the use of self-regulatory moral standards based on impartial considerations to provide more general guidelines for behaviors that should be exhibited in an organization by dealing with the subject matters that have serious implications in society, the environment, and even the workplace. It may prohibit certain types of actions and behaviors such as lying, stealing, assault, law-breaking, being unfair, or even killing.
Furthermore, corporations do not commit crimes or actions that are morally right or wrong. However, they act as an individual on the whole that has intended objectives and goals. The ones that need be achieved and are affected by the actions of the individuals. The ones that work for the organization to achieve those goals. Hence we can say that the organization, on the whole, is morally responsible for the actions of their workers.Therefore, in order to study morals in-depth, business ethics concentrates on moral standards and how are they applied to social systems and organizations. And for this business ethics investigates the following types of issues;
Systemic Moral Issues
These are the ethical questions that are raised about the economic, political, legal, and other social systems or institutions within which the organization/ business operates and works, these questions may include questions about the morality of communism, capitalism, laws regulations, industrial structures, social practices or the government’s direct negotiation for buying products instead of tender, etc. For example; if a government culture commits bribery.
Corporate Moral Issues
These are the ethical questions raised about a particular organization. These questions the morality of the activities, policies, culture, climate, impact, practices, or the organizational structure of an individual organization or company taken as a whole. For example; if an organization’s culture encourages moral wrong e.g. leg pulling.
Individual Moral Issues
These are the ethical questions raised about the behaviors and decisions of a particular individual working in an organization. These questions the morality of the decisions, actions, or character of the individual. For example; if an individual in an organization harasses women.
In order to analyze ethical issues, business ethics makes it easier by sorting the issue out in terms of systemic, corporate, or individual issues. Solutions one may not be applicable to another, hence dividing the issues into classes makes it helpful to solve the issue appropriately. Following a code of ethics will help develop a better reputation for the business in the eyes of its stakeholders and customers creating a firm and strong public image of the business that in turn will give rise to continued loyalty and will definitely attract new investors and retain the old customers.
Hence, the main purpose of developing business ethics is to create goodwill or the image of the business. It will be done in the eyes of its customers by establishing its reputation in order to increase profits. Ethical organizations are more likely to command the trust and respect of their stakeholders. As compared to their competitors, differentiating them from the rest of the crowd.