The Nature of Business Ethics

The Nature of Business Ethics

Table of Contents
Introduction................................................................................................................................3
Definition of Business Ethics.....................................................................................................3
Nature of Business Ethics..........................................................................................................4
Importance of Business Ethics...................................................................................................5
Scope of Business Ethics...........................................................................................................7
Competitive Advantages of Business Ethics............................................................................10
Code of Business Ethics...........................................................................................................12
Conclusion................................................................................................................................12
References................................................................................................................................13

Introduction
Ethics is a philosophy that deals with values related to human conduct and in specific, the
right and wrong actions or motives and their outcomes. The ethics can also be considered as
application of moral standards by an individual based on situations arising from traditions,
values or beliefs created in the society regarding right and wrong conduct. Business ethics is
an applied ethics that examines ethical principles and issues arising in the business
environment and it is applicable in all the aspects of business conduct. In addition, it is also
associated with the conduct of individuals and business organizations on the whole. Business
ethics is also a social science, the main aim of which is to define and examine the business
responsibilities as a part of general moral environment of the related society (Investopedia,
2018). It comprises of certain sets of rules and code of conduct, which serves as a means of
protecting from possible infringements of moral codes arising due to general activities and
responsibilities of the organization towards its stakeholders, for example, generating profits
for shareholders as well as payment of taxes to the government. This paper will discuss about
the nature, scope and increasing importance of business ethics in business environment.
Definition of Business Ethics
According to Crane & Matten (2007), “Business ethics is the study of business situations,
activities, and decisions where issues of right and wrong are addressed” (Crane & Matten,
2007). Business ethics is both a normative as well as descriptive discipline, however, being a
corporate practice and career specialization, it is primarily considered as normative rather
than descriptive approach. The normative ethics comprises of development and evaluation of
moral standards. It is an attempt to understand what should be done by people and if their
moral behaviour is reasonable (Ginsberg, 2017).

Nature of Business Ethics
In ethical practice, six core values are Loyalty, Honesty, Fairness, Integrity, Responsibility
and Citizenship (Moylan & Walker, 2012). Business ethics considers an action to be
permissible or non-permissible if it is an action performed or not to be performed by an
individual characteristically under certain specific circumstances. The leaders, managers and
all the employees of businesses are considered to be as virtuous and it is also expected from
them that they will understand these principles and will be able to apply them in developing
their missions and goals as well as in their execution of tasks at workplace.
The characteristics of business ethics are;
 Business ethics is a code of conduct that explains what to do and what not to do for
the wellbeing of an organization and it should be followed by all businessmen.
 On the basis of moral or social values or principles, business ethics comprise of
self-control, consumer protection, service and fair treatment towards society,
prevention of exploitation and many more (Epstein, 2002).
 Business ethics offer basic framework for performing business and it provides for
social, cultural, economic, legal and other limitations on business, under which,
business needs to be performed.
 Business ethics must be voluntary as it is expected from businessmen to accept
business ethics intentionally and must not be enforced by law.
 Proper education and guidance must be provided to the business persons before
introducing business ethics in the business environment and, they must be motivated
to utilize business ethics in their performance by being informed about the
advantages of implementing business ethics.