Definition of Business Ethics Key Terms


Business ethics has become an important issue since the fall of Enron. However, the priorities of individuals differ from the priorities of a business, therefore the ethics upheld vary from company to company. There are four major ethical theories that explain the manner in which some companies may conduct business. While there are standards, such as honesty, that many feel businesses should uphold, these theories may shed light on the motivations behind businesses not always conducting themselves in a manner appealing to the general public.

Business ethics

Examples of business ethics

Business ethics are guidelines for your company to follow. A set of ethics guides the company on how to conduct their day-to-day operations. For instance, if one of your business ethics is to practice complete transparency, your goal would be to honest in all of your dealings.

Determining the right way and the wrong way to conduct business helps you choose the ethics you want to incorporate into your organization. Another example of business ethics would be sustainability. However, a company can’t just state they plan to act in a more environmentally conscious way. The business must demonstrate their commitment to sustainability by choosing products and services that don’t have a detrimental effect on the planet.

Integrity in accounting practices is another example of a business ethic. Always being fair with pricing and transparent on costs showcases good business ethics. Those who are looking at numbers only without considering the customer isn’t considered an ethical business.

Principles

Principles aren’t necessarily standards, but absolute truths that serve as a goal for the outcome of business ethics. Basically, business principles are guides that steer employees toward the correct result. Principles are usually short phrases that demonstrate what it means to be ethical in the workplace.

Principles include:

Loyalty: Loyalty means that you are loyal to your company and co-workers. Known of your actions would be detrimental purposely to the brand. Loyalty breeds trust in any type of professional relationship.

Integrity: Integrity means you have a character that people believe in. They know you will follow your company’s core values without deviation.

Honesty: Honesty means you pledge to practice transparency. This is especially important if you are in sales. You never try to mislead others for monetary gain.

Fairness: When you’re fair, you make a pledge to be just. You don’t rush to hasty decisions based on emotion. You look at a situation closely before determining the best outcome for all parties involved.

Respect: Respect is given freely as part of business ethics. You treat everyone the same regardless of their status.

Caring: Caring often applies to your pledge to help out the community. Your company should have concern for those located in the communities you serve.

Deontology

Deontological ethics means that a business prioritizes society or the consumer over everything else. In deontology, the business has a duty to uphold and will, therefore, always follow through with its commitments and abide by the law. Davidson College in North Carolina compiled information on ethical theories, including deontology, covering the theory’s benefits and flaws. To see it, scroll down to Ethical Theories.

Utilitarianism

The utilitarian approach to ethics is one in which the actions a company takes are those that will have the most positive results and benefit the most people in the end. It is an analysis of consequences and choosing the action that has the least amount of negative results. The flaw with this ethical approach is that a business may find the benefits to its company and employees outweigh the benefits to the consumer. Markkula Center for Applied Ethics at Santa Clara University.

Relativism

Ethical relativism is the position that every individual has an equally valid point of view, and the determination of morals depends upon the cultural norms for that individual. In regard to business, relativism provides that the CEO’s concept of right and wrong can differ from the receptionist’s or consumer’s concept of right and wrong.

Ethical egoism

Ethical egoism is the position that it is moral for the individual to promote his or her own welfare over that of others. Ethical egoism is not typically a standard practice in the business world. Ethical egoism refers to companies that look out for themselves without worrying about anyone outside of their organization. The Internet Encyclopedia of Philosophy for more information on ethical egoism.

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