Ethical issues often arise in business environments, whether through business transactions or the establishment of new business relationships. An ethical problem in a business atmosphere can refer to any situation in which business partners as individuals or as a group (e.g., a department or company) have to assess the morality of certain actions and then make a decision among the decisions. Some ethical issues that are of particular importance in the market of developing companies include issues such as: honesty, integrity, professional behavior, environmental issues, harassment and fraud, to name a few. A 2009 national business ethics survey found that types of ethical employee misconduct include abusive behavior (at a rate of 22%), discrimination (at a rate of 14%), inappropriate hiring practices (at a rate of 10%), and misuse of company resources (at a rate of 10%). [184] The application of ethics depends on the personal values of entrepreneurs. Ultimately, what is right and wrong in a company comes down to individual ethics. Therefore, when management selects leaders, ethics plays a major role. These people represent the company. Management is ultimately responsible for any unethical practices of an executive or employee. Very often, it is considered that the economy is not bound by any ethic other than the law. Milton Friedman is the pioneer of sight. He was of the view that companies have an obligation to make profits under the legal system, nothing more.
[189] Friedman clarified that the duty of business leaders is to „earn as much money as possible while respecting the fundamental rules of society, both those enshrined in law and those enshrined in ethical customs.” [190] For Friedman, ethics is nothing but the observance of customs and laws. However, the reduction of ethics to respect for laws and customs has given rise to serious criticism. Many aspects of the work environment influence an individual`s ethical decision-making in the business world. When a person is about to start a business, many outside influences can push them to perform in a certain way. The core of the person`s performance in the workplace is rooted in their personal code of conduct. A person`s personal code of ethics includes many different qualities such as integrity, honesty, communication, respect, compassion, and common goals. In addition, ethical standards set by a person`s superiors are often translated into their own code of ethics. Corporate policy is the „umbrella” of ethics, which plays an important role in personal development and the decision-making processes that people make regarding ethical behavior. Business ethics can be presented below, except Many business and business strategies now include sustainability. In addition to traditional ecological concerns about „green” sustainability, business ethics practices have expanded to include social sustainability. Social sustainability focuses on issues related to human capital in the supply chain of companies, such as workers` rights, working conditions, child labour and human trafficking.
[209] The inclusion of these considerations increases as consumers and procurement officials require documentation that a company is complying with national and international initiatives, policies and standards. [210] In many industries, there are organizations dedicated to verifying the ethical delivery of products from start to finish,[211] such as the Kimberley Process, which aims to stop the flow of conflict diamonds to international markets, or the Fair Wear Foundation, which is committed to ensuring sustainability and equity in the apparel industry. Business ethics reflect the standards of each historical period. Over time, norms evolve, making accepted behavior offensive. Business ethics and the resulting behavior have also evolved. The economy has been implicated in slavery,[6][7][8] colonialism,[9][10] and the Cold War. [11] Contrary to Friedman`s logic, we observe that legal procedures are technocratic, bureaucratic, rigid and mandatory, while ethical action is a conscientious, voluntary decision that goes beyond normativity. [191] The Act applies retroactively. Crime precedes law.
Anti-crime law, to be passed, the crime must have taken place. Laws are blind to crimes they do not define. [192] Moreover, according to the law, „conduct is not punishable unless prohibited by law, which warns in advance that such conduct is criminal.” [193] In addition, the law presumes that the accused is innocent until proven guilty and that the state must establish the guilt of the accused beyond a doubt. Under liberal laws enforced in most democracies, the accused is presumed innocent until prosecutors prove the company`s guilt with the limited resources at its disposal. While the liberal premises of the law are necessary to protect individuals from government persecution, it is not a sufficient mechanism to hold companies morally accountable. [194] [195] [196] [197] Here are some examples of business ethics at work when companies try to balance marketing and social responsibility. For example, XYZ sells grains containing all-natural ingredients. The marketing department wants to use all-natural ingredients as a selling point, but needs to curb enthusiasm for the product in the face of laws that govern labeling practices. Basically, finance is a social science discipline. [38] The discipline borders on behavioural economics, sociology,[39] economics, accounting and management.
It deals with technical issues such as debt and equity mix, dividend policy, valuation of alternative investment projects, options, futures, swaps and other derivatives, portfolio diversification and much more. Finance is often mistakenly seen by people as a discipline without ethical burdens. [38] The 2008 financial crisis prompted critics to question the ethics of the heads of US and European financial institutions and financial regulators. [40] Financial ethics are neglected for another reason – financial issues are often treated as legal issues rather than ethical issues. [41] Business ethics may seem like an abstract concept, but it has a huge impact in the corporate world and beyond.