Ethics addresses morality i.e. concepts of good and bad, right and wrong, justice, virtue etc. Morality refers to a code of conduct or belief subjectively created by philosophy religion or the individual conscience.
Businesses are predominant in capitalist economies, most being privately owned and formed to earn profit that will increase the wealth of its owners and grow the business itself. The owners and operators of a business have as one of their main objectives the receipt or generation of a financial return in exchange for work and acceptance of risk.
Business ethics is a form of applied ethics that examines ethical principles and moral or ethical problems that arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and business organizations as a whole.
It is primarily a negotiation with partners; ethics recordkeeping; using ethical methods of competition. Business ethics is considered to be generally universal.
If a company's main purpose is to maximize the returns to its shareholders, then it should be seen as unethical for a company to consider the interests and rights of anyone else.
In the increasingly conscience-focused marketplaces of the 21st century, the demand for more ethical business processes and actions is increasing. Businesses can often attain short-term gains by acting in an unethical fashion; however, such behaviours tend to undermine the economy over time.
Today, most major corporate websites lay emphasis on commitment to promoting non-economic social values under a variety of headings In some cases, corporations have redefined their core values in the light of business ethical considerations.
Ethics may form a basis for a company’s policy. However, they are two different entities on their
Policy set of guidelines and principles laid down by the company.
Peter Drucker a groundbreaking writer consulter and teacher said that, business, is easily defined as other people's money. He has also said that, “The purpose of a business is to create a customer.” We know this to be very true. How many times have we seen the very thing happening over and over again, wherein innocent people get scammed out of their money so that someone else someplace can make that much more money.
When money is of concern, people tend to take shortcuts. False advertising is the use of false or misleading statements in thus being able to persuade people into commercial transactions that they might otherwise avoid. In a way cheating one of money.
Undercutting is the selling of goods or services at a lower price than another company knowingly to the same customer. Therein getting one up over their competition. This is in no way ethically right especially so when the customer made a deal with the first company.
Businesses can take advantage of the fact that their customers are looking to be ethically and morally sound and use that as a gimmick to continue upping their sales. As mentioned before, businesses are formed merely to profit the wealth of its owners and grow the business itself.
Enron had created offshore entities, units which may be used for planning and avoidance of taxes, raising the profitability of a business. This provided ownership and management with full freedom of currency movement and the anonymity that allowed the company to hide losses. These entities made Enron look more profitable than it actually was, and created a dangerous spiral in which each quarter, corporate officers would have to perform more and more contorted financial deception to create the illusion of billions in profits while the company was actually losing money.
Most professions have internally implemented principles of practice that associates of the profession must abide by, to forbid exploitation of the customer and uphold the wholeness of the profession. This is not only to the advantage of the client but to the advantage of those belonging to the profession. For instance, an American business may ask an engineer to manifest the safety of a project which is not safe. While one engineer may deny manifesting in the project on moral basis, the business may find a less painstaking engineer who will be ready to manifest in the project for a payoff, thus saving the business the cost of restyling.
In our opinion, there is no such thing as business ethics. Fundamentally when a business excels, they are essentially making money. When money is of question people tend to take shortcuts. They tend to cut their costs to increase their profits. As a by-product, others tend to get hurt. They are either, caused losses as someone undercuts them or that they have been scammed. Most of the time, following the morally upright route gets you nowhere in business. Gerald Stanley once said that” A man's success in business today turns upon his power of getting people to believe he has something they want” How one goes about achieving that effect lies in their moral compass.