Study of Business Ethics


Studyof Business Ethics

Studyof Business Ethics

Theconcept of ethics has gained immense popularity in the contemporarysociety. This is especially within the business circles where it isrecognized to add value to the reputation of the business entity.More often than not, the concept of business ethics is usedinterchangeably with business law. Of course, there are someinstances where business law and business ethics intersect. Indeed,ethics sometimes offer the framework or foundation on which the laws,guidelines and regulations are crafted. Nevertheless, it is notalways that what is legal is ethical.


Theconcept of ethics is often seen as an abstract term, in which case ithas numerous definitions depending on the context. Nevertheless,ethics underlines the moral principles that define or determine thebehaviors that may be considered right or wrong. In business, itwould be seen as the moral principles that dictate the manner inwhich a business entity behaves. In essence, it may be defined theset or collection of moral rules governing the manner in whichbusiness entities operate, as well as the manner in which decisionsin the entity are made and the treatment accorded to people (Stanwick&ampStanwick,2013).Of course, it may be acknowledged that the same principles thatdetermine the actions of an individual are also applicable tobusiness. Acting in an ethical manner would involve making adistinction between right and wrong before the right choice is made.More often than not, it is considered significantly or relativelyeasy to determine or identify unethical business practices. This isnot always the case especially considering that a company is alwaysrequired to make competitive return for the shareholders, as well astreat employees and the public in a fair manner (Weiss,2009).Business entities also have wider responsibilities and are requiredto minimize harm to the environment, as well as work in a manner thatdoes not destroy the community within which it operates.

Businessethics and Law

Asacknowledged earlier, there are certain cases where business ethicsand law intersect. This should not be surprising considering that thetwo are aimed at guiding the actions and behaviors of individuals inthe business entity. However, it is not always the case that what islegal is ethical. For instance, a company or business entity canpurchase cheaper raw materials or goods from another country, whichwill assist in the enhancement of the profit margin of the company(Stanwick&ampStanwick,2013).Of course, this is likely to be legal in the country, in which caseit would not be a violation of any rules and codes of conduct thatare aimed at guiding the business entity. Nevertheless, the countryfrom which the goods or raw materials are purchased may be usingchildren to work in devastating conditions for the raw materials tobe produced, in which case purchasing products from them wouldessentially be promoting child forced labor. This means that it wouldbe ethically wrong for the business (Stanwick&ampStanwick,2013).Similarly, there may be contention over the manner in which thebusiness dumps its waste. It is noteworthy that business entities maynot be violating any laws in the sector or industry within which theyoperate, even when such dumping would be ethically wrong as itdestroys the environment in the short-term and the long-term (Ferrellet al, 2013).

This,however, does not undermine the fundamental role of business law ininforming business ethics. Indeed, it is well understood that one ofthe ways of determining the rightness or wrongness of a particulardecision or action would be the determination of the provision of thelaws of the company, state and the country regarding the issue(Ferrellet al, 2013).

Businessethics and corporate social responsibility

Perhapsthe concept of corporate social responsibility is the link thateliminates the gap between law and ethics. Corporate socialresponsibility underlines an ethical theory that requires individualsto be accountable for the fulfillment of their civic duty and ensurethat their actions are beneficial to the entire society. This meansthat there would exist a balance between the need for the businessentity to enhance its profitability and the welfare of theenvironment and the society within which it operates (Stanwick&ampStanwick,2013).Of particular note is the fact that the pursuance of corporate socialresponsibility is not built on the need for enhanced profit makingbut rather it is geared towards the provision of services that arebeneficial to the society and the environment.

Thesocial responsibility theory is founded on a system of ethics whereactions and decisions have to be ethically validated prior toproceeding. In instances where decisions and actions are deemed to beharmful to the environment or the society, then they would be seen associally irresponsible even when they generate income or enhance thebottom-line or profits of the company in both the long-term and theshort-term (Shaw,2008).

BusinessEthics and Maximization of Profits

Perhapsone of the most distinctive controversies regarding business ethicsrevolves around the notion that it usually hampers the profit makingcapabilities of a business entity. This should not be surprisingconsidering that a large number of business activities that canenhance the profits of a company are always considered(Treviño &amp Nelson, 2011).Nevertheless, this does not undermine the fact that business ethicsalso have a likelihood of enhancing the profit making capacity of abusiness entity in both the long-term and the short-term. This isparticularly achieved on the basis of the impact that ethics has onthe reputation of the business (Treviño&amp Nelson, 2011).For instance, it may seem profitable for a business entity tomaximize its profits through unethical environmental practices thatincrease pollution, destroy forest cover, as well as contaminatewater supplies (Bhatia,2004).Indeed, it can be less costly for the business entity to negativelyimpact the environment and increase the profits than explore otherstrategies that would have a positive impact on the same. While theprofits of the company may increase in the short-term, there isalways the likelihood that the public would get to know about itspractices (Stanwick&ampStanwick,2013).This has a negative effect on the reputation of the company and,essentially, its brand image. Scholars have underlined the fact thata large number of consumers buy goods and services from a particularentity not because they are well versed with the quality of goods andservices but because the company providing them is reputable (Bhatia,2004).Building a favorable brand and reputation often takes a long time asthe services and goods of a business entity must be tested and triedand found to be appropriate. On the same note, the company must haveascertained or created the impression that it can never deliberatelyengage in harmful and unethical practices for the sake of profits.However, such a reputation would be harmed if the business entityengages in unethical practices, which essentially harms itsreputation and, eventually its profits. The trust of customers isoften extremely fragile and can be lost at any given time from thesimplest of issue (Shaw,2008).The adherence to business ethics by any entity goes a long way inenhancing the strength of its brand, which increases itscompetitiveness and subsequently, its profit making capability andsustainability.

BusinessEthics in Different Cultures/ Countries

Oneof the major concerns in modern day business entities is thedisparity of business ethics. As much as ethics are universallyrecognized as crucial, they are in no way universal across the rangeof countries (Shaw,2008).Indeed, it must be noted that there are variations in the ethics ofbusiness in different countries, which makes it necessary thatbusiness entities establish an ethical stand point from which theystart working on including corporate governance, corruption, bribery,targeted marketing, as well as working condition.

Perhapsthe most controversial ethical issues in the international arearevolve around the environment, working conditions and standards,child labor, as well as targeting marketing to individuals that areconsidered vulnerable, and corruption. On the same note, there hasbeen heightened attention on issues pertaining to sustainability inthe environment, or even human rights. Business entities that claimto be socially responsible have to ensure that the businessoperations are not an impediment to human rights (Shaw,2008).Either way, it is noted that the variations in business ethics meansthat there is likely to be conflicts that can hamper businessoperations in a particular country. Nevertheless, there are variedways in which a business entity can work around thisvariation. First, it must consider the distinctive ethical climatefor every market in making the code of ethics so as to safeguard therelevance of the same in the international markets. Second, thebusiness entity must make a decision regarding the local traditionsand customs that it has to follow at its discretion, as well as whichones it must avoid with regard to victimless issues. Third, it isimperative that the business entity applies its standards equally inevery market and subsidiaries (Shaw,2008).Lastly, the company should regularly train its workers on ethics,with the training sessions being used to highlight actual areas ofconcern.

Inconclusion, business ethics comes as one of the most controversialelements of the contemporary business environment. This isparticularly considering its effects on the activities in which abusiness entity can engage (Bhatia,2004).It is noted that business entity underlines the principles thatdetermine the rightness or wrongness of the actions and decisions ofa business entity. Of course, this means that there are somesimilarities between business law and business ethics. However, itshould be noted that what is legal does not necessarily have to beethical. More often than not, it is usually thought that businessethics stands in the way of the capacity of business entities inmaking as far as enhancing its profits through decreasing costs isconcerned. While there may be some instances where this seems to betrue, it should be noted that business ethics has a bearing on thereputation of the company in both the long-term and the short-term.This means that it can determine the manner in which it is perceivedby the consumers and strengthen the brand, which essentially enhancesits profit making capability.


Bhatia,S. K. (2004).&nbspBusinessethics and corporate governance: Concepts, issues, practices anddilemmas in shaping ethical culture for competitive advantage oforganisations.New Delhi: Deep &amp Deep.

Ferrell,O. C., Fraedrich, J., &amp Ferrell, L. (2013).&nbspBusinessethics: Ethical decision making and cases.Mason, OH: South-Western/Cengage Learning.

Shaw,W. H. (2008).&nbspBusinessethics.Australia: Thomson Wadsworth.

Stanwick,P. A., &amp Stanwick, S. D. (2013).&nbspUnderstandingbusiness ethics.Thousand Oaks, Calif: SAGE.

Treviño,L. K., &amp Nelson, K. A. (2011).&nbspManagingbusiness ethics: Straight talk about how to do it right.New York: John Wiley.

Weiss,J. W. (2009).&nbspBusinessethics: A stakeholders and issues management approach.Australia: South-Western Cengage Learning.


Introduction: The increasing popularity of the concept of ethics.

Whatis the connection between ethics and law/

Definition: What is ethics?

Whatis business ethics?

Whatis the connection between business ethics and personal ethics?

Businessethics and law: What is Business law?

Whatis the link between business ethics and business law?

Arebusiness ethics and business law the same?

Businessethics and corporate social responsibility: What is corporate socialresponsibility?

Whatis the role of corporate social responsibility?

Howdoes social responsibility fit in business ethics?

Businessethics and maximization of profits: do business ethics hamper profitoptimization in business entities?

Dobusiness ethics affect corporate social responsibility?

Howdo business ethics hamper/foster business growth and profitability?

BusinessEthics in Different Cultures/ Countries

Whatare the common controversial issues in the international markets?

Howcan companies combat the differences?