What is business ethics? In the simplest sense, business ethics is being able to identify the difference between right and wrong and then consciously choosing to do the right thing. Another way to define business ethics is written guidelines or standards used to hold a company accountable to moral actions and just decisions. Business ethics is an extremely valuable part of every company and can impact a company’s reputation and the community in which it serves. How companies choose to practice and enforce business ethics can differ from one company to the next, however, there is no denying that an ethical work environment is an essential key to success. This section will evaluate the role business ethics plays in the workplace and further explain why ethics are such an important component in business.

Like organizational behavior, business ethics impact a company at three different levels. These levels are personal, professional, and organizational. Also similar to organizational behavior, the three levels are all linked together and each one influences the other two.

Personal Ethics

Personal ethics are determined by each individual. Personal ethics may be determined by religious practices or how someone was raised. While professional and organizational guidelines may influence personal ethics, they are not one and the same. Personal ethics is the most diverse level of business ethics because each individual person has a different set of values and beliefs. Since personal ethics differ from person to person, professional and organizational ethics help to establish parameters and guidelines for individuals to follow in the workplace.

Professional Ethics

Training your employees can greatly increase their (and your!) understanding of ethical behavior in business.

Professional ethics is the idea that individuals in their job field have extensive knowledge and experience which prepares them to work within certain industries. This training equips them to know business ethics standards for their line of work. For example, a doctor knows better than to violate HIPAA by sharing a patient’s medical information. And a teacher is taught to never be alone with a student. Neither of these examples may be something considered on a personal ethics level, however, they are expected on a professional level since their schooling and training has covered the information.

Organizational Ethics

Lastly, an organization’s ethics are established and then implemented company wide. Organizational values are external indicators used to ensure a company is behaving ethically. However, the foundation of organizational values is grounded within the internal culture of the company. Organizational values can positively or negatively impact productivity, morale, the community, and the list goes on and on.

So what are some examples of ethical issues? There are a wide range of company policies, behaviors, and practices that can fall into an ethical category. Let’s explore a few of them.

• Fraud. Fraud is a big ethical no-no for companies. Fraud is participating in any type of bribery, insider trading, misrepresentation of a product, etc.
• Sustainability. Sustainability is another ethical idea many companies are participating in today. Helping to minimize a company’s carbon footprint is an important ethical decision for organizations.
• Diversity. Diversity is another example of business ethics. Think back to the diversity lawsuits we discussed in the last module. Each of those examples were in violation of business ethics.
• Exploitation. Exploitation can include the environment, the population, the government, etc. Taking advantage of questionable situations can lead to ethical dilemmas. Finding a tax loophole for example may be legal, but it doesn’t mean it is ethical.

If not handled ethically, each of these categories can have a harmful effect on the community and the organization. It is also important to consider how each individual within the organization can have an impact on a company’s reputation. Establishing a code of ethics and training employees to fully understand the importance of making ethical decisions is essential to a successful company. We will explore how to implement these things in the upcoming sections. For now, let’s move onto the next section to explore recent ethical investigations.

References

Alton, Larry. “How Much Do A Company’s Ethics Matter In The Modern Professional Climate?” Forbes. September 12, 2017. Accessed April 10, 2019. https://www.forbes.com/sites/larryalton/2017/09/12/how-much-do-a-companys-ethics-matter-in-the-modern-professional-climate/.