Business ethics is about studying business transactions, actions, and choices in which ethical considerations are addressed. Business ethics typically relates to a corporation or an organization of decision-making that involves social responsibility. In contrast, social responsibility pertains to the effect of a business or activities on society. While legal obligation focuses on how a business avoids illegal conduct.
It also deals with fairness and integrity in business decisions and practices. Which involve discrimination, harassment, and the prevention of harm. Ethics also involves honesty in business transactions and relationships, particularly those that involve finances.
Components of business ethics:
- The significant components of business ethics include commitment, accountability, credibility, honesty, knowledge, integrity, motivation, knowledge, and care. Commitment, as the first component, considers to be the basis of business ethics because it is an ethical commitment to do the right thing even when others are not doing the same or right things, as demonstrates through various actions or forms of behavior, including honesty, dedication, diligence, objectivity, and professionalism.
- As the second component, accountability considers to be how an individual or an organization communicates information, ideas, or outcomes to others.
- Likewise, credibility, the third component, relates to whether an individual or an organization is reliable or trustworthy. In addition, honesty, the fourth component, relates to whether an individual or an organization has honesty and integrity. Lastly, knowledge, the fifth component, pertains to whether individuals or organizations have good judgment or sound business acumen.
Framework of business ethics:
Businesses and individuals operate within a framework of [B.E]. Which serves as their guide and guideline in matters that involve their reputations, assets, costs, profits, responsibilities, and interests. Therefore, although leadership is not necessarily an essential element of business ethics. The combination of leadership and management role requires to guide others effectively is necessary for effective management, which is necessary for achieving company goals. In general, managers play a more visible role in society, becoming necessary in society, ethics, and business. However, it is this dual role and responsibility of managers that businesses must utilize to be successful and achieve organizational objectives.
Dimensions on which business ethics:
There are five dimensions on which ethical business pertain to a manager’s performance as a leader: commitment, honesty, responsibility, motivation, and religiousness. All of these individual components are important in creating effective managers, as each one plays a vital role in ethical business.
- Within the larger ethics framework, each of these components represents individual values and perspectives on what it means to be ethical.
- The level of commitment to business ethics comes from how much an individual or organization cares about their success and the effectiveness of their mission, processes, practices, or products.
- Individuals who support strong business ethics can increase public trust and use that as a basis for continuing good behavior. According to applied psychology, it begin to get more complex when religion becomes more involved. Religion considers a significant force in society for centuries, and its influence continues to be felt today. Many believe that increasing levels of religiously based business ethics increases levels of religious involvement. Religiously motivates individuals, likely highly involves in decision-making, and their actions can reflect on how they feel about themselves and their world.
Importance of Business Ethics:
Ethical Business is an essential topic in management training because the way a company conducts business affects everything it does. By definition, it relates to the ethical standards for right and wrong behaviour in business. Ethics connects to a set of rules or a moral code that applies to a company. The Code of Ethics of Businesses (CBE) was created in 1960 and serves as a guideline for corporations and other associations. Unfortunately, the Code of Ethics has been frequently overlooked in corporate training programs because it confuses other business management training programs.
There are several types of business ethics that managers should focus on. The most well-known types are ethical code and transactional ethics.
However, these programs are not interchangeable; each involves slightly different procedures. By definition, ethical code relates to the actions that consider morally right or wrong in a transaction. Ethical transactional conduct describes how individuals or teams make decisions based on the expected results; it also may involve some degree of deception.
- To understand ethics, managers should understand what makes them different from each other. Business professionals who dedicates to upholding the code of ethics can make a positive difference in their company. They can make a positive difference in the lives of others and help society at large. While most business ethics programs focus mainly on teaching managers how to make ethical decisions, good managers also know how to avoid ethical problems.
- When planning a ethical program, it is essential to consider the difference between business ethics and law. Business professionals refer to policies and procedure develops by business organizations as business ethics, while legal professionals refer to laws and judicial interpretations of laws. Both business professionals and legal professionals have a wide range of duties that cross both disciplines. For example, business professionals may oversee an ethics policy or review a legal code, while legal professionals may argue cases before the court, draft legislation, or oversee compliance with laws. Therefore, they are both essential members of the team that develops and implements this.
Play a critical role:
Business ethics and legal practices play a critical role in the day-to-day operations of most companies. The integrity of the company cannot be questioned, no matter what the circumstances. Therefore, a solid education in this and legal practices will give any business professional a competitive edge when seeking employment.
The Basics of Business Ethics Definition and Examples
Business ethics refers to the rules and regulations that companies and organizations follow in their decision-making process. A business ethics definition can be quite lengthy. It can even encompass complex decision-making scenarios such as the dilemma many organizations face when faced with compliance to legal demands made by government agencies.
Three primary elements:
The definition of a business ethics policy will focus on three primary elements:
The policy will outline what behaviours will result in discipline, warnings, or penalties for the organization.
Meeting the goals and objectives:
A business definition business ethics policy will focus on meeting the goals and objectives of the organization. It also tackles conflict resolution issues and how to ensure ethical behaviour and standards of behaviour from employees, suppliers, and clients. This policy may deal with the ethical conduct of a company manager, suppliers, investors, and customers.
It should note that a business ethics definition is not determined by strict adherence or a written code. There are some core values or ethical standards held by most organizations, companies, businesses, etc. These are usually reflected in company mission statements, core business plans, and company values and principles. These core values and principles may vary from one organization to another.
Core business ethics standards or ethical standards:
Most businesses share these core business ethics standards or ethical standards. These ethical standards or beliefs are the cornerstones on which business ethics are based. Examples include honesty, dependability, trustworthiness, and respect for others.
Different types of behavior:
A business ethics definition will list down the different types of behaviour that are considered unethical. One of the most common unethical behaviours is unethical business practices. Other unethical behaviours include discrimination, favouritism, harassment, violence, and others. However, business ethics are not static. They constantly change based on the needs and preferences of society.
For instance, companies need to adhere to ethical standards regarding the treatment of workers in their companies. This can include paying wages, providing safe working environments, giving equal opportunity and promotion, and so on. When these standards and policies are disregarded, it can lead to lawsuits and negative publicity for the company.
This is the reason why organizations conduct employee benefit programs and social responsibility programs to earn a good reputation in the community and earn the loyalty of consumers.
Some effective business definition examples:
To come up with effective business definition examples, you must know the meaning of business ethics and how they shape a business’s future.
In fact, there are two types of business ethics: ethical business behaviours and ethical business standards. Examples of ethical behaviours include:
- Following all applicable laws and regulations.
- Providing a quality product or service.
- Providing a service that people need.
- Honoring employee and customer complaints.
- Providing a workplace where employees are able to work comfortably and creatively.
- Avoiding discrimination.
- Other issues that affect workers and customers.
On the other hand, ethical business standards include honesty, integrity, reliability, knowledge, innovation, creativity, and a good relationship with clients.
The best way to learn about business ethics is to enrol in a business ethics charter college. These programs provide a comprehensive curriculum that teaches you the different ethical standards and behaviours associated with good business ethics. If you have an interest in becoming an ethical business entrepreneur, this is the best course for you.
There are several business definition examples included in business ethics education:
For instance, one of these examples focuses on the principle of obligation. According to this principle, “an individual has a responsibility not to harm another person or to cause damage to properties, rights, or goods.” Another example focuses on the principle of equity. It states, “No one may unjustly discriminate against another individual, group, class, or society.”
- Another business ethics definition and example focuses on the importance of integrity. According to this principle, “an individual or group has the responsibility to make sure that their actions reflect honest standards and aspirations.” This includes both employees and customers. This also includes the actions of leaders because they are held responsible for their actions. It is essential to the success of any business, not just the international business market that individuals are honest in their conduct.
- The above business ethics definition and examples should help any business person understand how their actions affect the reputations and successes of their fellow business people and the companies they work for. When an individual or group is found to be unethical in their conduct, it can have a severe negative effect on all involved’s reputations and future success. Therefore, every business needs to incorporate honesty and ethical conduct into their business policies and business practices.
- While these ethical issues are not always intentional, they still can result in bad consequences for the company, its associates, and eventually even itself. Even the best-established companies have not been able to escape the potential legal ramifications that improper behavior can bring.
Furthermore, these skills will only increase a business professional’s chances of finding work. An ideal candidate for this type of degree program should like detail-orient, confident, and ethical. When choosing which online MBA program is right for you, be sure to research all aspects of the online program. Make sure it accredits and in which part of the world the school is located. Be sure that it has a curriculum that suits your learning style and schedule. Finally, make sure that the school offers assistance for the transition to working in an online environment.
The bottom line is that all employees must practice good ethical business conduct to remain profitable. It’s not enough to simply have ethical standards – companies must also choose honest and hardworking employees who understand that honesty and integrity go a long way. If good employees feel that dishonest competitors and co-workers surround them, they will be more likely to hold themselves accountable for their actions. This can be the strongest motivation for good employees to maintain high levels of integrity and, ultimately, their financial success.