**1. Historical Evolution of Business Ethics:**
– Business ethics norms evolve over time
– Business involvement in slavery, colonialism, and the Cold War
– Term ‘business ethics’ popularized in the US in the early 1970s
– Society for Business Ethics founded in 1980
– European business schools adopted business ethics after 1987
– Religious and philosophical origins
– Early treatment of business ethics found in the Tirukkural
– Influence of religious and philosophical texts on business ethics
– Integration of ethical principles in ancient writings
**2. Ethical Considerations in Business Conduct:**
– Overview of business ethics reflecting the philosophy of business
– Purpose of business includes determining fundamental goals
– Ethics guide daily decisions and conduct
– Distinction between law and ethics in business practices
– Legal regulations and ethical standards influencing business behavior
– Corporations and professionals adhering to written codes of ethics
– Milton Friedman’s perspective on corporate responsibility
– Support and critique of the Friedman doctrine in business ethics
**3. Impact and Importance of Business Ethics:**
– Interest in business ethics rose significantly in the 1980s and 1990s
– Major corporations emphasize commitment to ethical values
– Governments use laws to regulate business behavior
– Emergence of formal ethics regimes in large corporations
– Ethical behavior as a key responsibility of business managers
**4. Functional Business Areas and Ethical Concerns:**
– Finance issues including debt/equity mix, dividend policy, investment evaluation, derivatives, portfolio diversification
– Ethical concerns raised by the 2008 financial crisis
– Finance paradigm with a focus on shareholder wealth
– Fairness in trading practices and corporate abuses
– Human resource management issues like recruitment, selection, and labor ethics
**5. Legal, Regulatory, and International Business Ethics:**
– Corporate social responsibility and ethical business practices
– Legal and regulatory considerations for corporate entities
– Affirmative action as a remedy for discrimination
– Ethical considerations in promotions and workplace safety
– Trade unions, management strategies, marketing ethics, and inter-organizational relationships
– International business ethics, ethical issues in international business transactions, and impact of globalization and cultural imperialism
Business ethics (also known as corporate ethics) is a form of applied ethics or professional ethics, that examines ethical principles and moral or ethical problems that can arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and entire organizations. These ethics originate from individuals, organizational statements or the legal system. These norms, values, ethical, and unethical practices are the principles that guide a business.
Business ethics refers to contemporary organizational standards, principles, sets of values and norms that govern the actions and behavior of an individual in the business organization. Business ethics have two dimensions, normative business ethics or descriptive business ethics. As a corporate practice and a career specialization, the field is primarily normative. Academics attempting to understand business behavior employ descriptive methods. The range and quantity of business ethical issues reflects the interaction of profit-maximizing behavior with non-economic concerns.
Interest in business ethics accelerated dramatically during the 1980s and 1990s, both within major corporations and within academia. For example, most major corporations today promote their commitment to non-economic values under headings such as ethics codes and social responsibility charters.
Adam Smith said in 1776, "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices." Governments use laws and regulations to point business behavior in what they perceive to be beneficial directions. Ethics implicitly regulates areas and details of behavior that lie beyond governmental control. The emergence of large corporations with limited relationships and sensitivity to the communities in which they operate accelerated the development of formal ethics regimes.
Maintaining an ethical status is the responsibility of the manager of the business. According to a 1990 article in the Journal of Business Ethics, "Managing ethical behavior is one of the most pervasive and complex problems facing business organizations today."