Business Ethics in Global Economy

This report discusses the importance of business ethics in the global economy. It explores how ethical practices help businesses establish trust and maintain a positive image. The report also examines different theories for ethical decision making and the impact of cultural differences on global ethics.

Business Ethics

Table of Contents
Business Ethics................................................................................................................................1
INTRODUCTION...........................................................................................................................4
MAIN BODY..................................................................................................................................4
Code of Business Ethics in Global Economy..............................................................................4
Importance of Business Ethics in Global Economy....................................................................5
Theories for Business Ethics.......................................................................................................6
Reflection.....................................................................................................................................8
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Ethics are governing principles which are based on the standards of right and wrong and
guide actions in terms of what should be done and what not. The basis of rights behaviour and
act is factors like obligation, benefits to society, fairness and specific virtues. Business Ethics are
general principles and guidelines for business organisations in terms of what is right for them to
do and what not. Business Ethics is also a study for appropriate business policies and procedures.
The points which are covered in consideration of business ethics are corporate governance,
discrimination, bribery, corporate social responsibility and legislative responsibilities of the
business. This report will discuss business ethics in global economy. Businesses are required to
follow global norms for ethical practices. Considering ethical standards of the country in which
business is operating. There are various reasons which state and suggest importance of business
ethics in global economy.
MAIN BODY
Business ethics helps business to develop a trust between customers and business and
other participants of business. Business ethics in global economy helps business to establish trust
in global customers and market participants at global level. The guidelines which businesses are
required to follow are known as code of ethics. The code of ethics which businesses need to
follow are-
Code of Business Ethics in Global Economy
Compliance based code of ethics
Compliance based on ethics means that organisation comply all the rules and laws in its
various aspects of operations (Nguyen, Pham and Ermasova, 2019). These ethics not only set
guidelines which businesses are required to follow but also determine penalties and actions
against violation of those guidelines and regulations. Such ethics in international context refers to
complying laws and regulations of the various countries where business operates and along with
that rules and laws which have been determined by the global organisations regarding global
business.
The code of conduct based on compliance is not a choice available to the business and
companies and business have to adhere to these laws and regulations in order to avoid any type
of legal actions against the company. Not only company but individual worker of the
organisation also may face legal actions and penalties in noncompliance of the code which have
been determined by the company in accordance with the laws. On the basis of this legal
regulations and code of governance companies and business can develop its own code which are
required to be followed by its employees and those people who are concern with business and its
operations. For example, company will have to give all the candidates and equal opportunity to
participate in the interview because as per equality and anti-discrimination laws this is illegal and
company needs to give equal opportunity to all.
Value based code of ethics

Code of ethics which are based on value considers core value system of the company.
This code of conduct outlines standards of responsible conduct as they relate to the larger public
and the environment. Value based ethical codes may require a greater degree of self-regulations
than compliance-based codes (Strudler, 2016). As per my view Value based ethics of the
business remains same in global economy and sometimes becomes attraction for the economy.
For example using best quality material and providing best quality output this is based on values
of the company and in global market this value will remain same.
Values of business are generally determined by its promoters and owners and these are
values that promoters and owners of the company want to transmit through their products and
services. These values are basis of ethical code of conduct of the business and this reflects
through practices of the business. Products which are produced and supplied by the company are
also based on these values.
Code of ethics among professional
Ethics for professional provide guidelines which professionals are required to be follow
in their practices. This is a legal requirement and also a code of loyalty that requires be followed
by professional in their professional practice. For example laws and regulations for financial
practices are known as code of ethics among professionals. Some of the practices of business are
professional and there are different set of guidelines for such activities to govern such activities.
For example- Audit is one of the professional activities and this is why set of rules and ethical
standards which have to be followed by those who are undertakes the function of audit. In
context of the audit in global economic context the rules for audit are determined by and global
organisation.
Importance of Business Ethics in Global Economy
Regulations for following ethics and ethical code of conduct makes it important to know why
ethics are important why they are required to be followed. I believe some of the reasons which
make ethics are important for businesses in global economy are as follows-
To ensure long term survival of the business in global economy as increasing unethical practices
presents that business ultimately fail to survive with wrong acts.
Ethical code of conduct helps in developing the image of the business in global economy
and this increase scope of business activity in the global economy (Daudisa and Vevere, 2020).
For long term survival and sustainable development of the business in global economy it is
important that company has positive and favourable image in the global economy and this is
possible to achieve and maintain good image with ethical practices. Presently there are various
ways in which business and all its activities has become transparent and business cannot hide any
unethical practice for long and this may ruin its image and in case unethical activity is illegal
then business may have to face critical legal challenges.
Ethical code of conduct being followed by the company restrain it from any type of legal
actions being taken against the company and this will also help in any type of negative image for
the company. Many unethical activities are also considered as illegal and in case of illegal
activities company will have to face legal actions against it and this will affect company in all its
aspects which are its image and its financial well being.

Managing and complying with ethical norms of the company ensures that company
manages its stakeholders and their relationships. This ensures that company provides accurate
and required information to all its stakeholders which are important in context of their interest in
the business.
Businesses when follow ethical practices they are able to get trust and confidence of the
customers and this is important at getting trust and confidence of the global customers as well.
Customers are key factor for the success of the business and at global level this is difficult for
business to get trust from customers as they have more choice than local customers and their
evaluation of the product is based on various factors and they also consider local performance of
the business.
Safe guarding rights of consumer are another importance of business’s ethical practices.
Consumer rights are one of the important factors for the company and noncompliance of this
may lead company to legal trouble (Strudler, 2016). Compliance of ethical code of conduct at
global level will restrain from such actions. This is because business following ethical practices
will provide quality products and will keep transparency in its business operations so that
consumers are aware of the products and services and what they are made of. Noncompliance of
consumer rights at global level might lead company to a big trouble.
Ethical practice of the business will enable it to employ best of the available talent on
global level. This is because such businesses which are following ethical code are able to attract
talented and efficient candidates to work in their company and this factor also contributes in their
job satisfaction this also ensures that they perform well for the organisation.
Healthy competition is another important reason for Ethical code of conduct and
companies when are following Ethics and its conduct is accordingly they are able to remain in
healthy competition and achieve their objectives in legitimate ways.
Theories for Business Ethics
Ethical practices are based on some of the factors which have been discussed earlier but
for ethical some of the theories and models has also been developed and these are as follows-
Utilitarian Theory of Ethics
This theory of ethics is based on normative ethics and utilitarian ethics theory considers
that decision of business in context of ethics should be based on the concept of “the greatest
good for greatest number”. The idea in this theory is that decisions are based on the consequence
of the decision and decisions are based on what impact it will make on the people who are
concerned with the actions of the ethical decision. For example as per this theory when business
faces ethical dilemma they are required to consider what impact it will make on the greatest
number of concerned people. In global economy context where more people are concerned with
business actions and decisions and in such situation if business face the dilemma of the selection
of the decision when company have to either select the local impact of the business or global
impact of the business decision in such case business will make select the ethical decision which
is good and favourable at global economy (Nolan, 2016). This theory may seem appealing and
appropriate but this theory particularly suitable in situations when public is most likely to get

affected by the decision of the business and does not provide any solid framework for the
decision making to the business. Some of the principles of this theory in global economy are-
Consequentialism
This means that tightness of any action depends solely on the consequence of the action.
Hedonism
This means that pleasure alone is good for the decision to be ethical.
Maximisation
Right decision is the one that creates greatest amount of net pleasure.
Universalism
As per this principle of the theory everyone’s consequences are alike.
Deontological Theory of Ethics
This theory of ethical decision making in global economy is based on the concept of
modern deontology (Colpan and Jones, 2019). The idea is based on duties and as per this theory
is based on the concept that some actions are right not because they have some benefit but
because of their basic nature or the rules which are lying under them. Some of the duties which
under this theory of ethical decision which are-
Duties of Fidelity
This duty is the duty which involves keeping promises both which are explicit and
implicit and to tell what is true and right. This is the duty which business in global economy has
to follow.
Duties of Reparation
This is the duty of business in which they are required to compensate any type of injury
which have been inflicted on them and in global economy this means that business compensate
to all those who have wrongfully inflicted to global people.
Duties of Gratitude
This duty is concerned with returning the favour which business has taken from others. In
global economy if business takes favour from other international organisation this comes under
this duty that they return their favour in best possible way.
Duties of self improvement
This duty in this theory suggests that business keeps improving their conditions and this
is not just a duty in global economy they can take various advantage from this duty (Nguyen and
Tran, 2018). This helps them to increase their business profitability. Business operating in global

economy has to consider this because self improvement leads to improve in quality of the
business activities which ensure long term and sustainable development of the business.
Duties of Non-maleficence
This is the duty of business in which it has too consider that no activity of the business
harm anyone. This means that for self and individual benefit business does not do anything
which harms others.
This theory refuse the argument of ethical decision making on the basis of their consequence and
considers that business in global economy are required to do what is their duty and obligation
(Schneider, 2018).
Reflection
From the experience about writing the report I can say that ethics are principle that guide
actions of the individuals and these are not limited to action of individuals and some selected
organisations and business have to also act ethically (Enderle, 2018). The importance for their
ethical acting is important for the complete society as they are significant part of the society they
use resources of the society and later provide their output to the society and earn profit and this s
why it is important that they behave and act ethically so that they do not harm the interest of the
society. The experience also included that ethical behaviour is not only for society country and
global economy but ethical behaviour is important for the business itself. The reason behind this
is that ethical act of the company and business enables it to create positive and favourable image
of the business and this manages to contribute in growth and development of the country. Local
level growth leads to global expansion of business activity and survival and growth on global
economy depends on the ethical consideration of the business. The experience says that just like
benefits of the ethical consideration in global economy for the business are more and high the
same way actions which might be taken against business in noncompliance of the business are
high. Actions taken against business on global level can harm its business forever and this will
also result in significant loss of finance of the business. Business when face actions from
international organisations or in global economic context survival and growth of business in
local economy also becomes difficult. This says that only ethical behaviour of the company is
good for its local and global success. Later some of the theories which business considers while
making decisions in ethical dilemma were also discussed and the experience from those says that
there are different situations when business can take assistance from these theories. My
experience says that deontological theory of ethical decision making is right to be considered in
general situations and everyday conduct of the business. Utilitarian theory is useful when ethical
dilemma of the business is out of regular situations in such case business can take decision which
is based on the greatest good for greatest number concept.
One of the important factors of business ethics in global economy is that business has to
consider cultural differences on global level and their ethical norms which might be different
from the home country of the business (Wolf and Thiel, 2018). Business working with their
ethical standards in global economy may fail to perform as per global ethical standards and
expectation of global economy.

CONCLUSION
On the basis of above discussion it can be concluded that business are required to follow
ethical standard and code of conduct when they doo not have any other choice and such ethical
standards are known as ethical standards and code of conduct which are based on the
compliance. These are legal codes and business does not have choice regarding these ethical
codes. Business in relation with value based has choice as they can have their values and these
are not mandatory to be followed by business. Such values are individual choice of business and
its people to be followed by rather than any government and legal regulation. Other than this
business can take assistance from the business ethics theories to guide it during ethical dilemma.

REFERENCES
Books and Journals
Becker, C.U., 2018. Business Ethics: Methods and Application. Routledge.
Colpan, A.M. and Jones, G., 2019. Business, Ethics and Institutions. The Evolution of Turkish
Capitalism in a Comparative Perspective.
Daudisa, T. and Vevere, V., 2020. Importance of professional ethics and corporate social
responsibility within business studies curriculum within context global economy.
In SHS Web of Conferences (Vol. 74, p. 04004). EDP Sciences.
Enderle, G., 2018. How can business ethics strengthen the social cohesion of a society?. Journal
of Business Ethics. 150(3). pp.619-629.
Nguyen, L.D. and Tran, Q.H., 2018. Working adults and personal business ethics in South East
Asia: A comparative study in Thailand and Vietnam. Public Organization
Review. 18(2). pp.159-174.
Nguyen, L.D., Pham, L.N. and Ermasova, N., 2019. Business Ethics in a Global Economy: A
Cross-Cultural Study Among Working Adults in Russia and Vietnam. Global Business
Review. 20(4). pp.856-870.
Nolan, J., 2016. Corporate Social Responsibility? Human Rights in the New Global Economy,
edited by Charlotte Walker-Said and John D. Kelly. Chicago: University of Chicago
Press, 2015. 392 pp. ISBN: 978-0226244273. Business Ethics Quarterly. 26(4). pp.565-
567.
Schneider, A.B., 2018. International service learning in the business curriculum: Toward an ethic
of empathy in a global economy. Business Horizons. 61(6). pp.913-923.
Strudler, A., 2016. Guest editor’s introduction:: Normative business ethics in a global economy:
New directions on donaldsonian themes. Business Ethics Quarterly. 25(4). p.15.
Strudler, A., 2016. Normative Business Ethics in a Global Economy: New Directions on
Donaldsonian.
Wolf, R. and Thiel, M., 2018. Advancing Global Business Ethics in China: Reducing Poverty
Through Human and Social Welfare. In Examining the Private Sector's Role in Wealth
Creation and Poverty Reduction (pp. 67-84). IGI Global.