Find out about ethics in business

In accordance with Fieser, (2010) when business people talk about “ethics in business” , their means is one of the three things that can be named three A:

  • Avoid violation the illegal law in one’s work-related activity
  • Avoid act which may bring about civil law suits adjacent to the company
  • Avoid performance that is bad for the company picture.

Some companies interpret the ethics in business to the advantage that means that if they think that doing things will bring them advantage then they do that and do not think that is it ethical or not then they steadiness ethic with advantage.

One general view of ethics is the study of right, wrong, good and evil a conduct surrounded by a defined environment. It is the discipline that studies the moral relationship between human beings and nature and also the value and moral status of the environment. Therefore, the context in which ethics is applied serves to establish limits, borders, definitions and points-of-view. These days, the need for suitable ethical behaviour within organizations has become vital to keep away from probable lawsuits. The public scandals of corporate malfeasance and misleading practices, have affected the public perception of many organizations (e. g., Enron, Arthur Andersen, WorldCom etc.). Ethics in business is the behaviour that a business hold to in it’s on a daily basis transactions by means of the world. The ethics of a particular business can be varied. Additionally, as many scholars believe, human rights and environmental conservation are acquisition growing more acknowledgment in both academic and commercial settings. Multi National Companies and local countries are usually thinking to share four worldwide ethical values viz. honesty, justice, capability and utility –values described somewhere else as global ethics standards for business, admire and trust in locals, environmental defence and respect, and test of human and environmental defensive legislation (C.-F. Wu, 2001, 222). While in other countries and other nationalities there will be other factors added or omitted from the mentioned values for examples in Islamic countries because they have Islamic based values then Islam will effects their trade and management values.

As international companies expand internationally and enter foreign markets, ethical conduct of the officers and employees assume added importance since the very cultural diversity associated with such expansion may undermine the much shared cultural and ethical values observable in the more homogeneous organizations (Mahdavi, 2001). Though understanding of other cultures and recognition of differences among them will enhance the cross-cultural communication, it may not be sufficient to provide viable guidelines of proper ethical behaviour in organizations. Therefore, concerns about unethical behaviour of corporations in other countries, are evident in legislations for example The Foreign dishonest Practices (Act of 1977, and the Sarbane-Oxley Act of 2002). (See Mahdavi, 2001; and Nimgade, 1989:104, among others) Morf (1999: 265) believes: “Ethics is the moral principle that individuals insert into their decision making process and that helps temper the last outcome to conform to the norms of their society”. Moreover, ethical principles have the very profound function of making behaviour predictable (Mahdavi, 2003). In such businesses “Managers model the behaviours they demand of others; and …communicate the importance of integrity when making difficult decisions.” (Gabler, 2006, p. 339). Some of studies focused on the impact of cultural values on ethics in business in companies from various countries of Asia, North America, and Europe (e.g., Cheung & Chan, 2005; Husted & Allen, 2008; 2003; Jackson, 2001; Jeffrey, Dilla, & Weatherholt, 2004; Pucetaite & Lamsa, 2008; Rees & Miazhevich, 2008). However, most of the extant studies focused on a limited number of practices and behaviours (e.g., ethical decision making or ethical leadership), and were conducted, as a rule, in a small number of countries.

History of Ethics in Business:

The history of ethics in business is most likely as old as business itself. Even in ancient societies there were most probable rules governing satisfactory deal practices. Surely the oldest known written legal code is the Code of Hammurabi (1700s B. C.), dealt significantly by means of issues about trade, tariffs, and pricing.

In the same way, the laws of the Old evidence, counting the Ten Commandments (around 1500 B. C.) applied moral rules to business-related activity.

With the 4th century B. C., ethical issues interrelated to business and deal had begun to get academic action in the philosophies of Plato and Aristotle. Plato’s concern with fairness and ethics in such works as the “Republic” often had important implications for deal and business. Aristotle honestly addressed the morality of economic relations and responsibilities in his discussions of household management in his “Politics. “All through the middle Ages, the Christian doctrines of the Catholic Church administered much of moral and legal considerations of trade, although little organized growth of such ideas took place.

In the 13th century A. D., Thomas Aquinas measured some issues of borrowing and usury, and reiterates much of Aristotle’s conversation of these issues in light of church doctrine. Still, even Aquinas was rather not in agreement in his theoretical positions about such matters. The history of ethics in business also has its determining years in the improvement. Improvement figures like Martin Luther and John Calvin, in the 15th and 16th centuries A. D., applied religious and moral considerations to deal and economics leading to the growth of the Protestant work ethic. But in the next two centuries, explanation thinkers such as John Locke and Adam Smith began to divide religious doctrine from moral and ethical considerations commerce and business.

Locke begins the concept of property as a natural right, and Smith developed the foundation for modern economic theory by championing the moral value of self-interest in guiding and encourages the progress of markets. In the 19th century, theories like Smith’s came under attack from Karl Marx and his followers, who saw the maximization of profit said by self-interest as of necessity unfair of labour.

In the middle of the changes in social attitudes that emerged in the 1960s, questions about the social and moral responsibilities of businesses and corporations began to emerge in academic and professional circles. Sociologist Raymond Baumhart was between the first academics to explicitly teach and study the ethics of business and commerce in the 1960s and by 1974 there was enough of a developing regulation in the field to give rise to a landmark conference at the University of Kansas.

As then, courses and planned studies in the field have came out in universities all through the world, even seeding sub-disciplines such as marketing, accounting, and finance ethics. in the meantime, noted theorists and academicians for example Norman Bowie, John Rawls, and Thomas Donaldson have made significant assistance to the legitimization of the field as an academic regulation in its own right.

Today, the history of ethics in business has led to an recognized area of theory and practice in both the specialized and academic worlds. Many of the same issues measured since the first writings on the subject, some four thousand years ago, remain just as applicable today as ever. ethics in business being part of the larger social ethics, always been affected by the ethics of the epoch. At different epochs of the world, people, especially the elites of the world, were blind to ethics and morality which were obviously unethical to the succeeding epoch.

History of business, thus, is ruined by and through the history of Slavery history of colonialism and later by the history of cold war. The present communication of ethics in business is the ethical communication of the post-colonialism and post-world wars. The need for ethics in business in the present period had begun gaining attention since 1970s. In history, firms started stress their ethical build since the late 1980s and early 1990s, as the world saw serious economic and natural disasters as a result of unethical business practices.

Why Business Ethics?

It as a normative responsibility looks for to give ethical insight and leadership to individuals in business, businesses as organizations, and to society. As a practical try, it seeks to have an impact on the ways in which people in business act, the policies they accept, and the role that business plays within society.

Ethics, the search for ‘a good way of being’ for a intelligent course of action, as it could be practiced by business firms is called business ethics. Ethics in business deals with the ethical pathway business firms should adopt. Troubling the least suffering to humans and the nature in its total, achieving the most net benefit to the society and economy inspiring the ability of the system where it is performance, being fair in all its dealings with its adjacent and remote stakeholders, being prepared to correct its mal-habits and promotion an continuing righteous corporate character in totality, can be called business ethics. It is often suggested from extended utilitarian/ consequentiality position that businesses can often attain short-lived gains by acting in an unethical fashion; however, such behaviours tend to undermine the economy over time. A business becomes ethical by presumptuous the accountability of ‘”translating”’ the theoretical ethical restriction into series of duties. Though, while translating, we do not just abide by the ‘”a priori”’ ethical injunctions or codes rather Business ethics – Wikipedia, the free encyclopaedia. React to the situation in its background wonder sensibly choosing the best alternative course of reply from the multiple possibilities. In other words, ethics is a subject of ‘responsibility in the experience of unqualified decisions made outside of knowledge or given norms’.

Discussion on ethics in business is necessary because, business can go unethical, and there are plenty of evidences as in today on unethical corporate practices. Even Adam Smith, in whose name neo-liberal laissez-faire is advocated opined that ‘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’ Business does not operate in vacuum. Firms and corporations operate in the social and natural environment. By virtue of existing in the social and natural environment, business is duty bound to be accountable to the natural and social environment in which it survives. Irrespective of the demands and pressures upon it, business, by virtue of its existence is bound to be ethical, for at least two reasons:

First, because of  the business does affects its stakeholders and second, because every point in time of action has routes of ethical in addition to unethical paths in which the existence of the business is justified by ethical alternatives it sensibly chooses One of the ethics in business – Wikipedia, the free encyclopaedia . Conditions that brought ethics in business to the front position is the demise of small scale, high trust and face-to-face enterprises and emergence of huge international corporate structures capable of considerably affecting everyday lives of the masses.

Improving Business ethic

In accordance with Michael R, (1991) survey performed on getting better ethics in business. There are primarily three fold approaches for getting better ethics in business that cause the idea that long-term development of America’s business ethics lies in a three-fold approach these can be discover here:

Primary, in both public and private companies it is essential for employees to know that expectations for ethical behaviour in an organization start at the top and that senior management expects all employees to act as a result.

Second, the best scheme of representative this top-down approach and the officious strong system is adoption and open, unqualified support of a business code of conduct and the hierarchal systems.

Third, permanent learning is one of the intrinsic characteristic of an ethical company or organization so exact training sessions are essential to get ready managers to think ethical implications of all business decisions.

But the other step can be added here is creating the culture of ethic in the company or Organization. Employees should consider themselves the behaviour of ethic.

International business ethics and ethics of economic systems:

The issues here are grouped together because they involve a much wider, international view on business ethical matters.

While business ethics emerged as a field in the 1970s, international business ethics did not emerge until the late 1990s, looking back on the international developments of that decade. Many new practical issues arose out of the international context of business. Theoretical issues such as cultural relativity of ethical values receive more emphasis in this field. Other, older issues can be grouped here as well. Issues and subfields include:

The way in which multinationals take advantage of international differences, such as outsourcing production (e.g. clothes) and services (e.g. call centres) to low-wage countries.

Some countries often use dumping as a competitive threat, selling products at prices lower than their normal value. This can lead to problems in home markets. It becomes difficult for these markets to Business ethics – Wikipedia, the free encyclopaedia fight with the pricing set by foreign markets. In 2009, the global Trade Commission has been researching anti-dumping laws. Removal is often seen as an ethical issue, as larger companies are taking advantage of other less economically advanced companies.


A variety of codes was developed in order to set up order among international corporations; although, some organizations decline to put up with by these codes, mostly because national governments have not sanctioned them completely. Without uniform and full enforcement, international organizations could have out of control choice in global ethical issues. Fundamental this lack of agreement is the issue of national in addition to business culture (See Hofstede, 1980: 46-47). Every nation is different and every multinational organization is in one way or another distinct in the way they do business, especially in other countries.

In addition to these codes, the moral corporation should address human rights and whistle blowing and the international ethics code under which it operates. These issues are not very new.

In a survey of 300 multinational corporations, 80 percent agreed with seven items being ethical issues for business: (1) employee conflict of interest, (2) inappropriate gifts to corporate personnel, (3) sexual harassment, (4) unauthorized payments, (5) affirmative action (6) employee privacy; and (7) environmental issues (Brooks, 1989; Berenheim, 1987, 1989: 117-129).Journal of Academic and Business Ethics International Business Ethics.


Ethical climate, it must be emphasized, is not the same as culture is commonly perceived, but rather a broader concept of culture (Schein, 1990, pp. 109-119). Culture is believed to be more associated with deeper beliefs, values and assumptions (Denison, 1996, pp. 619-654).

Therefore, just as one can value an individual’s culture by his or her actions and personal activities, ethical climate can be observed on a larger scale; in this case, the organization. Ethical climate is, in essence, the employee’s perception of the norms of an organization (Bartels et al. 1998: 799-804).

Business Ethics Challenges in a Global Economy:

Be many substantial local as well as regional factors that make a variation in attitudes and behaviour. In addition it is important to note that what may happen at a distance be able to have a great effect on local activity. Business persons, diplomats, media representatives and those from many other groups must recognize, as some have, which the welfare and even continued existence of their enterprises requires a good knowledge of what they may face in foreign climes not to speak of variations even in their native country. “Go global or perish” (Kehoe, 1998) is a fundamental battle cry. Even those who are not active in operations far from home cannot ignore the impact of the possible indirect influences on economic or political performance at home. Moreover, attempts to translate local experience and knowledge to activity elsewhere in the world can lead to less than wished results. “Business in the global arena may be characterized as a brilliantly structured mosaic of complexity and diversity, composed of various and different places, peoples, cultures, customs, laws, mores, processes, and ethical systems, a mosaic that challenges, at times, bothers a global manager” (Ibid.). Lest it be believed that these factors relate only to business activity one may note that recent and past decisions on a geopolitical basis often have been made without detection of the underlying factors faced in those actions. Even on an individual level the challenges can play a role apart from what a manager in charge may be faced with. What may be encountered in tourism in a foreign setting, for instance, can often make a great difference in the emotional experience not to speak of possible difficulties or even dangers for those not capable to recognize their bases.

The Place of Ethics in Business Functioning:

 All of the elements of the challenges to be faced in a changing environment the field of ethics in recent years have become a major point of contemplation in all circles of society, on a domestic level in addition to internationally. It has become more and more clear that policies that do not take into account individual and social differences will not stand the test of time. Knowledge of the basics of a discipline alone will not keep the decision maker in any field of professional activity on a sufficient level of performance. In business those who are well-informed in accounting, finance, or other disciplines but who do not recognize the broader social implications of their decisions are not likely to be effective. In politics a seize of the elements of local and international law without recognition of the underlying forces does not make for effective action. The recognition of the breadth of awareness of the many factors involved in even primary situations has led to a somewhat variation of structuring of the concepts of the field. The activity under this concept is not to be considered as limited to business corporations as it also can apply to other corporate bodies as worker’s unions, on-profit organizations as well as to public entities though they may not be generally recognized as belonging to the same family. A further difference in the description of this area has come with development of the concept of Sustainable Development (SD).Many business executives “show their commitment to acting in a socially responsible manner. For a growing number of companies the chosen vehicle to make their case is the corporate sustainability report, a document that outlines corporate initiatives in such areas as the environment and resource management, in addition to philanthropy, workplace conditions, and concern for the communities in which the companies do business” (Osborne, 2002). As a result of that approach the reporting is often described as identifying the “triple bottom line” which covers action in environmental, economic, and social responsibility areas. The term business ethics, however, remains a common designation of the area as one subset of the general area of ethics.

Downwards through the years the concern with ethical behaviour often was not a topic of major interest, mainly in a business setting. At the national or local level governments are (or may not be) active in attempting to insure their constituents a stable and ethical society. One move has been to add legislation regarding those aspects of social behaviour which formerly may have been governed and accepted by society or its elements but without the rule of law. While the legal provisions established may have been accepted to one extent or another by ethical feeling of all or parts of the community there has been some freedom in the past that called for legislation.

Ethics in Action:

 Ethical behaviour is determined by the values of the society and legal principles act to support activity along these lines. At the governmental level the major role of the managerial, governmental and legal entities is to insure the health and safety of its people and provide that all will be protected from the harmful effects of bad or dangerous practices by any elements of the community. Legal enactments are often supplemented by codes of conduct. These are most often met in quasi-public institutions or groups, such as lawyers, accountants, doctors, pharmacists and other professional organizations, such as the chambers of commerce. Educational institutions generally also have codes of conduct for all members of that community and action in schools of business in particular has shown a great deal of activity along those lines.

Ethics Support in Education:

Educational programs in other areassuch as tourism should also include attention to ethics and legal aspects in travel abroad. In other professional areas the codes of conduct promulgated bymany groups are reinforced by the requirements for continuing education that includes astrong exposure to ethical problems faced in practice.

What is the role of educational and professional organizations in the developmentand preservation of ethical practice? A response to this comes from the field as “Canbusiness schools teach students to be virtuous? In the wake of all the corporate scandalsthey have no choice” (Alsop, 2003). The answer to this comes from particularly notableattempts to delineate standards of performance. The Association for the Advancement ofCollegiate Schools of Business International (AACSB) has developed extensiveStandards that call for proper implementation of the educational process. While these areestablished as requirements for accreditation they serve as guidelines for qualityeducation in the field. Standard 15 states “Normally, the curriculum management processwill result in undergraduate and master’s level general management degree programs thatwill include learning experiences in such management specific knowledge and skills areasas: Ethical and legal responsibilities in organizations and society” (AACSB International,2003).

Ethical Branding and Corporate Reputation:

Corporate reputation is concerned with how people feel about a company based on whatever information (or misinformation) they have on, company activities, workplace, past performance and future prospects (Fombrun,2000). According to Keller (1998), a socially responsible corporate image association involves the creation of consumer perceptions of a company as contributing to community programs, supporting artistic and social activities and generally attempting to improve the welfare of society as a whole.


Business is a human activity and, like most human activities, it has been and is likely to continue to be evaluated from a moral point of view (Robin and Reidenbach, 1987). Branding, as part of business, is no exception. Ethics in business in organizations requires values-based leadership from top management, focused actions that include planning and implementation of standards of appropriate conduct, as well as openness and continuous effort to improve the organization’s ethical performance.

Although personal values are important in ethical decision making, they are just one of the components that guide the decisions, actions, and policies of organizations.

Assessment of the recent growth in the international trade and the far-reaching

growth of global entities lead the authors of this paper to the predictable conclusion that ethical issues and concerns facing business entities are no longer related to the limited frameworks of Journal of Academic and ethics in business International ethics in business, national or even regional arenas. These issues have assumed global dimensions and as such require global solutions.

Business activity and that of other organizations requires an awareness of the challenges faced on a global scale. In this connection ethics plays a important role.

Though labelled, corporate social responsibility or sustainable growth, the term business ethics remains the key designation for this area. While the study of ethics has a long history the main challenge under which ethics plays a role today is a need for consciousness of the basic force of the culture in which the activity takes place. Not only is the action of organizations critical in facing the many of the problems, but individuals also playing an important role. Government and educational institutions, have their place in leading the way for members of organizations active in a local and international environment.

The use of significant thinking is an important part of ethical decision making particularly in unclear areas. Whereas the growth of personal character is important, it must be linked to competence in understanding risks and approaches to managing ethics and agreement in a difficult organizational background.


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Source by mehrdad salehi