What Is the Role of Business Ethics? (2024)

FAQs

What Is the Role of Business Ethics? ›

By definition, business ethics refers to the standards for morally right and wrong conduct in business. Law partially defines the conduct, but “legal” and “ethical” aren't necessarily the same. Business ethics enhances the law by outlining acceptable behaviors beyond government control.

The role of a business is to produce and distribute goods and services to satisfy a public need or demand. According to Business News Daily corporate social responsibility (CSR) is “a business practice that involves participating in initiatives that benefit a society.”

Ethics are the principles that guide us to make a positive impact through our decisions and actions. Ethics play an important role not only in our personal lives but also in business. We are all encouraged to make ethical choices and apply ethics in all areas of our lives.

An ethically responsible enterprise develops a culture of caring for people and environment and commands a high degree of integrity in dealing with others. Ethical activity is indeed valuable in itself, for its own sake, because it enhances the quality of our lives and that of the work we do.

A business's ethical–or unethical–behavior can significantly impact its public perception, daily operations, and revenue. Companies that act ethically can attract loyal clients, hire top talent, and even win awards.

Business ethics enhances the law by outlining acceptable behaviors beyond government control. Corporations establish business ethics to promote integrity among their employees and gain trust from key stakeholders, such as investors and consumers. While corporate ethics programs have become common, the quality varies.

Cambridge dictionary defines business ethics as “the rules, principles, and standards of deciding what is morally right or wrong when working.” So, business ethics refers to the implementation of appropriate business practices and policies in the workplace.

Business ethics are important for a number of reasons. They ensure that a company operates lawfully, safeguarding both employees and the general public. They keep trade honest and fair, uphold manufacturing standards, and prevent false or bogus product claims.

Since ethics is the study of moral choices, the goal of ethics is to determine which moral choices will enhance our humanity and which ones will diminish our humanity. Some scholars like to define this as a process of promoting an “authentic humanity”, which includes individuals and all of human society.

Workplace ethics are important to creating a culture in which employees trust each other to do the right thing, which leads to a happier work environment, more collaborative relationships, customer loyalty and the ability to recruit and retain ethical employees.

Why is it important to study business ethics? ›

Business ethics inform a company's values and goals, as well as how it runs its day-to-day operations. An ethical company runs on principles such as honesty, integrity, fairness, trustworthiness, accountability, and respect for others.

Protecting business image: Business communication ethics has an important role in protecting, respecting and maintaining a good business image for an organization. By practicing good business communication ethics, companies can build a positive image in the eyes of customers and the public.

Duty-based ethics teaches that some acts are right or wrong because of the sorts of things they are, and people have a duty to act accordingly, regardless of the good or bad consequences that may be produced. Some kinds of action are wrong or right in themselves, regardless of the consequences.

Ethical principles in business allow you to approach topics with fairness and care for others, recognizing and reviewing all the options available to make the most ethical choices. Ethical decisions build trust and ensure all your decisions are good ones as they pertain to your business.

If lack of ethics in business is evidently visible for the public knowledge, that business loses credibility. While some businesses survive public knowledge of a lack of ethics through reimaging and advertising campaigns, many lose a key customer base.

Ethics Improves Your Business Reputation

Even social media ethics is important for your reputation. This means you'll appeal to a variety of people and organizations that will be great for boosting your business such as: Clients and customers who believe in your company and want to support it.

Business Ethics is important because the corporation is part of a larger network of stakeholders that include employees, the community, the environment, and Government bodies. Corporations being large and powerful members of this network have a greater responsibility to ensure its sustainability.

The seven business ethics principles are accountability, care and respect, honesty, healthy competition, loyalty and respect for commitment, information, respect for rule of law.

International business ethics constitute a global code of conduct - a set of principles that establishes ethical standards for employees and businesses. Though every business has an ethics code, engaging in international business may introduce gray areas where expectations for employee conduct are unclear.