Which Behavior Is an Example of Ethical Consideration within the Purview of Business Relationships

The term “business ethics” became common in the United States in the early 1970s. By the mid-1980s, at least 500 business ethics courses had reached 40,000 students, using two dozen textbooks and at least ten case books supported by professional societies, centers, and journals of business ethics. The Society for Business Ethics was founded in 1980. European business schools adopted business ethics after 1987 and launched the European Network on Business Ethics. [12] [13] [14] In 1982, the first individual books in this field were published. [15] [16] Most developing and some developed countries oppose extending the scope of the WTO to labour standards, which view trade and labour regulation as a means by which major industrial nations protect their international markets. These countries believe that the most effective way to promote labour standards and improve working conditions is to develop their local economies. They fear that the introduction of labour standards will perpetuate poverty in their countries and delay improvements in working conditions. Ethical issues include the rights and obligations between a company and its employees, suppliers, customers and neighbors, its fiduciary responsibility to its shareholders. Problems of relations between different companies include hostile takeovers and industrial espionage. Related topics include corporate governance; corporate social entrepreneurship; political contributions; legal issues such as the ethical debate on the introduction of a criminal offence of corporate manslaughter; and the commercialization of corporate ethics policies.

[35] According to a study published at the end of 2012 by the Institute of Business Ethics and Ipsos MORI, the three main areas of public concern for business ethics in the UK are executive pay, corporate tax evasion and bribery and corruption. [36] Jones and Parker wrote, “Most of what we read as business ethics is either sentimental common sense or a series of excuses for being rude.” [199] Many manuals are exercises in filling out procedural forms without addressing the real ethical dilemmas. For example, the U.S. Department of Commerce`s ethics program treats business ethics as a set of instructions and procedures to be followed by “ethics officers.” [34] Others argue that being ethical is only for ethics. [200] Business ethicists can trivialize the question by offering standard answers that do not reflect the complexity of the situation. [191] All successful businesses communicate effectively. If communication channels are open and employees are willing to talk to each other, misunderstandings are avoided. Constant conversations and reminders make it less likely that an employee will break a rule or perform poorly. On the other hand, a leader who embodies ethical behavior will be right in all situations.

In turn, employees trust their management team to work for the good of the entire company. By acting ethically, leaders can foster an environment that rewards and encourages the right attitudes. Foreign countries often use dumping as a competitive threat and sell products at prices below their normal value. This can lead to problems in domestic markets. It will be difficult for these markets to compete with prices in foreign markets. In 2009, the International Trade Commission investigated anti-dumping laws. Dumping is often seen as an ethical issue, as large companies take advantage of other, economically less advanced companies. At the other end of the spectrum are companies whose ethical misconduct has cost them dearly. Companies the public has turned against include Nikola, a trucking company that recently admitted to hosting a video demonstration of its technology, and European fintech company Wirecard, which collapsed in 2020 after two separate ethics scandals. Corporate crime stories often end with civil settlements paid to the U.S. Department of Justice.

But what is the impact of a potential future business if a company is caught with its hand in a cookie jar? Research from the University of Notre Dame suggests what you might already expect: Unethical behavior hurts a company`s prospects tremendously. Peter Drucker once said, “There is no separate business ethic or obligation,” implying that personal ethics standards cover all business situations. [31] However, Drucker stated in another case that the ultimate responsibility of corporate executives was not to harm – primum non nocere. [32] An increasing number of companies also require their employees to attend business conduct seminars, which often include discussions on company policy, specific case studies, and legal requirements. Some companies even require their employees to sign agreements in which they adhere to the company`s rules of conduct. To understand why ethical behavior is important, it can be helpful to know how unethical behavior affects a business. Think, for example, of a company that only hires family or offers inappropriate incentives. While these actions are not illegal, they can certainly have a negative impact on a company`s morale and success.

A high ethical standard also extends to customers. A reputation for positive ethical behavior attracts more potential customers, customers, and partners to work with you. It also builds customer loyalty over time, creating a loyal customer base that can refer your business to others. Basically, finance is a social science discipline. [38] The discipline borders on behavioural economics, sociology,[39] economics, accounting and management. It deals with technical issues such as debt and equity mix, dividend policy, valuation of alternative investment projects, options, futures, swaps and other derivatives, portfolio diversification and much more. Finance is often mistakenly seen by people as a discipline without ethical burdens. [38] The 2008 financial crisis prompted critics to question the ethics of US leaders. and European financial institutions and financial supervisors. [40] Financial ethics are neglected for another reason – financial issues are often treated as legal issues rather than ethical issues. [41] The authors cited several key findings from their research that could help business owners and managers achieve both high-quality service and a corporate culture with consistent ethical behavior: At the same time, companies that conduct their international business ethically generate higher profits by attracting business partners who share the organization`s commitment to ethics in the international trade. Apparel manufacturer Patagonia is an example of a company that has earned a reputation for ethical practices by reducing its environmental impact and protecting workers` rights in the countries where it operates.

When extending their ethics policies to their operations abroad, international organizations can either adopt a single set of ethics guidelines that apply to domestic and foreign business relationships, or create separate ethical guidelines for their domestic and international departments. To function effectively, a business organization needs a common system of moral and ethical beliefs to guide and guide individuals` day-to-day decisions throughout operations. Many ethical requirements are dictated by laws and regulations, such as environmental protection and occupational safety regulations. Management leadership demonstrates and promotes other ethics in international business by modeling ethical behavior and decision-making for employees. Ethics is the rule or norm that governs our decisions on a daily basis. Many view “ethics” with conscience or a simplified sense of “good” and “evil.” Others will say that ethics is an internal code that governs an individual`s behavior and is rooted in each person through family, faith, tradition, community, laws and personal customs. Businesses and professional associations, particularly licensing bodies, generally have a written code of ethics that sets out the standards of professional conduct expected of all stakeholders in the field. It is important to note that “law” and “ethics” are not synonymous, and that “legal” and “ethical” actions are not necessarily the same in a given situation. Laws and regulations adopted by legislative bodies and boards of directors establish the “law”. Slavery was once legal in the United States, but you certainly wouldn`t say that someone else`s slavery was an “ethical” act. Business ethics reflects the philosophy of business, the purpose of which is to determine the fundamental objectives of a company. If a company`s goal is to maximize returns for shareholders, then sacrificing profits for other causes is a violation of its fiduciary responsibility.

Companies are legal persons, but this does not mean that they have all the rights and obligations as natural persons. Political economy and political philosophy have ethical implications, particularly with regard to the distribution of economic benefits. [187] John Rawls and Robert Nozick are both notable contributors.