Business and ethics relationship

Ethical Relationships in Business |

business and ethics relationship

Here I am going to share some thoughts of mine on how ethics and laws are related, as well as the differences between these two. What is. Ethical business relationships are less often a matter of legal compliance as they are of conscious self-governance by individuals and businesses. Business is creating and excgaging value. It is by nature a social wndeabour, as even when an entrepreneur solely by himself develops and manufactures a.

Related issues include corporate governance ; corporate social entrepreneurship ; political contributions ; legal issues such as the ethical debate over introducing a crime of corporate manslaughter ; and the marketing of corporations' ethics policies.

The way a corporate psychopath can rise in a company is by their manipulation, scheming, and bullying.

What Is the Relationship Between Business and Ethics?

They do this in a way that can hide their true character and intentions within a company. Functional business areas[ edit ] Finance[ edit ] Fundamentally, finance is a social science discipline.

business and ethics relationship

It concerns technical issues such as the mix of debt and equitydividend policythe evaluation of alternative investment projects, optionsfuturesswapsand other derivativesportfolio diversification and many others. Finance is often mistaken by the people to be a discipline free from ethical burdens.

business and ethics relationship

Adam Smith However, a section of economists influenced by the ideology of neoliberalisminterpreted the objective of economics to be maximization of economic growth through accelerated consumption and production of goods and services. Neoliberal ideology promoted finance from its position as a component of economics to its core. Neoliberals recommended that governments open their financial systems to the global market with minimal regulation over capital flows.

Some pragmatic ethicistsfound these claims to be unfalsifiable and a priori, although neither of these makes the recommendations false or unethical per se. In essence, to be rational in finance is to be individualistic, materialistic, and competitive. Business is a game played by individuals, as with all games the object is to win, and winning is measured in terms solely of material wealth. Within the discipline this rationality concept is never questioned, and has indeed become the theory-of-the-firm's sine qua non".

Such simplifying assumptions were once necessary for the construction of mathematically robust models. However, signalling theory and agency theory extended the paradigm to greater realism. Outside of corporations, bucket shops and forex scams are criminal manipulations of financial markets.

Cases include accounting scandalsEnronWorldCom and Satyam. A common approach to remedying discrimination is affirmative action. Once hired, employees have the right to occasional cost of living increases, as well as raises based on merit. Promotions, however, are not a right, and there are often fewer openings than qualified applicants. It may seem unfair if an employee who has been with a company longer is passed over for a promotion, but it is not unethical. It is only unethical if the employer did not give the employee proper consideration or used improper criteria for the promotion.

If an action is illegal it is breaking the law but if an action seems morally incorrect that is unethical. Potential employees have ethical obligations to employers, involving intellectual property protection and whistle-blowing.

Business ethics

Employers must consider workplace safetywhich may involve modifying the workplace, or providing appropriate training or hazard disclosure. This differentiates on the location and type of work that is taking place and can needs to comply with the standards to protect employees and non-employees under workplace safety.

Larger economic issues such as immigrationtrade policyglobalization and trade unionism affect workplaces and have an ethical dimension, but are often beyond the purview of individual companies.

Marketing ethics Marketing ethics came of age only as late as the s. The business' actions and decisions should be primarily ethical before it happens to become an ethical or even legal issue. Fairness The three aspects that motivate people to be fair is; equality, optimization, and reciprocity.

  • What Is the Relationship Between Business and Ethics?

Fairness is the quality of being just, equitable, and impartial. This misuse is from late arrivals, leaving early, long lunch breaks, inappropriate sick days etc.

This has been observed as a major form of misconduct in businesses today. One of the greatest ways employees participate in misuse of company's time and resources is by using the company computer for personal use. Consumer Fraud There are many different types of fraud, namely; friendly fraud, return fraud, wardrobing, price arbitrage, returning stolen goods. Fraud is a major unethical practice within businesses which should be paid special attention.

Ethical Relationships in Business

They describe the basic behavior of human beings. In another word, laws represent the minimum standards of human behaviors, that is, ethical behavior. They both provide people guidelines of what may do or what may not do in certain situations. In a word, they exist in a purpose of making people benefit from being members of a well-regulated society.

Differences between ethics and laws: However, there are many distinctions between ethics and laws. To some extent, ethics is not well defined but laws are defined and precise. From whichever angle it is looked at, a business cannot exist without taking social needs into account.

And when taking social needs into account, a business requires the involvement of ethics in order to make sense of what it means to start or operate a business. Of course, it does not mean that a business embracing ethics as part of its character will or should give up the importance of making profits.

This is a good example of ethics and business going hand-in-hand. Ethics should not be considered a negative extrinsic thing or a setback to profit. It should go along with the initial profit motive and can even contribute to that same motive.

Business Ethics: Corporate Social Responsibility

This idea is different from Adam Smith's early articulations of the theory of wealth. Smith felt that the main economic intent was to consider one's private interest and that society as a whole would benefit Smith, In other words, in search for profit during normal business activities, there would likely be an ethical outcome.

Smith did not think that people should act unethically but he did not see ethics as the motivating force of business activity Smith, A modern version of Adam Smith is Milton Friedman.