Topic:

Business Ethics

Abstract :
Business ethics, the study and evaluation of decision
making by businesses according to moral concepts and
judgments. Ethical questions range from practical,
narrowly defined issues, such as a company's obligation
to be honest with its customers, to broader social and
philosophical questions, such as a company's
responsibility to preserve the environment and protect
employee rights. Many ethical conflicts develop from
conflicts between the differing interests of company
owners and their workers, customers, and surrounding
community. Managers must balance the ideal against
the practicalthe need to produce a reasonable profit
for the company's shareholders with honesty in
business practices, safety in the workplace, and larger
environmental and social issues. Ethical issues in
business have become more complicated because of
the global and diversified nature of many large
corporations and because of the complexity of
government regulations that define the limits of
criminal behaviour. For example, multinational
corporations operate in countries where bribery, sexual
harassment, racial discrimination, and lack of concern
for the environment are neither illegal nor unethical or
unusual. The company must decide whether to adhere
to constant ethical principles or to adjust to the local
rules to maximize profits. As the costs of corporate and
white-collar crime can be high, both for society and
individual businesses, many business and trade

associations have established ethical codes for

companies, managers, and employees.

Table of Content :
1) Ethics and Business
03
a) Introduction
03
b) Ethical concepts and principles
03
c) Legal and social contract
04

2) Business guidance and control

mechanism
05
a) Introduction
05
b) Business code and monitoring mechanism
06
c) Shareholder with mission
06

3) Discussion
07

4) Conclusions
09

5) References

10
6) Appendices

11
1) Ethics and Business:
a) Introduction:
INTERNATIONAL BUSINESS operates in an
interdependent global economy where market
functions are influenced by national political and
cultural diversity. The scope and influence of
international enterprises grew enormously during
the latter part of the past century, spurring
debate over what normative standards should
guide business decisions. The study of ethics and
international business is an exploration of the
analytical techniques available to help answer
this question.

b) Ethical concepts and

principle:
Ethics focuses attention on the choice of values.
One useful definition of ethics is the systematic
use of reason to interpret experience to
determine values worthwhile in life and rules to
govern conduct. 1 This conception of ethics sets

the parameters used in this book. Past

experience is examined, principally in the form of
applied case studies, to assist the identification
of values and conduct standards to guide
international business activity. A related term is
morality, which defines what persons should do
in order to conform to a society's norms of
behaviour. 2 Ethical analysis can help determine
moral norms. , references to ethical and moral
actions are sometimes used interchangeably
.Moral values and standards deriving from a
process of ethical analysis should be
distinguished from religious-oriented morality
that is based ultimately on revelation rather than
experiential examination. This distinction does
not deny the importance of religion as a source of
personal values that can guide conduct in
society. However, absent broad-scale
conversions, religious prescriptions do not
provide as useful an approach to developing
internationally agreed principles compared to
rationality-based debates that examine past
experience. People who have not shared the
same revelation or profess the same faith will not
be convinced simply by the assertions

c) Legal and Social Contract:

Social contract is an ancient philosophical idea

that states that an individual's ethical and
political obligations relate to an agreement he
has with every other individual within a society.
The agreement can be written, as in the form of
laws, or it can be a tacit agreement, an unspoken
or unwritten agreement of social norms and
customs. In business, social contract theory
includes the obligations that businesses of all
sizes owe to the communities in which they
operate and to the world as a whole. This
involves corporate philanthropy, corporate social
responsibility and corporate governance. An
important concept of the social theory contract in
business is follow-through, or making sure that
the business is holding up its end of the bargain
and not just paying lip service to the community.
Corporate governance structures are policies that
a company enacts to keep itself on an ethical and
legal path. You can think of these structures as
internal laws for the business. Corporate
governance dictates the standards to which a
company holds itself and the punishments that
detractors from the standards incur. Corporate
governance is therefore important for keeping
corporate philanthropy, CSR and the overall
social contract theory at the forefront of a
business' strategy plan.

2) Business guidance and control

mechanism:
a) Introduction:
The Evolution of Modern mines created a
mismatch between traditional systems for
regulating business based on national law and
the globe-spanning reach of MNE operations. The
MNE form of organization simply outdistances
most national government controls, while
international institutions lack the political
authority and enforcement capability to pick up
where national mechanisms stop at territorial
borders. This disparity alarms actors in both the
public and the private sectors who perceive
growing MNE influence on national economic,
social and even political processes. The ensuing
search for effective business guidance and
control mechanisms covers an array of
alternatives, ranging from voluntary through
coercive to mandatory. The challenge is to select
and activate the best mechanisms to influence
MNE actions in ways that maximize benefits and
minimize potential harm to the many societies
MNEs serve. Concern that national regulations
fall short of controlling MNE activity initially
gained prominence in the 1970s. 1 Recent
globalization trends exacerbated these worries,

particularly after the Soviet Union's collapse

discredited communist and many socialist
economic policies, leaving the field open to
dominance by US-style capitalism. A seeming
consensus emerged centred on liberalization and
privatization policies that open developing
countries and transitional economies to
international market forces. Privatization and
deregulation reduce or remove many national
government controls over business, while lower
barriers to international trade and investment
expose domestic economies to MNE penetration.
In essence, private MNEs gained more legal
rights and greater freedom of action within
national economies, sparking calls for MNEs to
accept explicit corresponding responsibilities
toward meeting societal interests.

b) Business code and monitoring

mechanism:
Codes of conduct do not have any authorized
definition. At a very basic level, they all aim to
define standards and principles that ought to
guide the behaviour of the addressee in a
particular way. As such, they are regulatory
instruments. While codes may be directed at
states, a salient feature is their aim to regulate
the transnational activities of non-state actors.6

Indeed, the modern issue of codes of conduct is

the question of how to effectively enhance the
accountability of transnational corporations in
the international marketplace.
So long as business actors approach the principle
of corporate social responsibility from an
instrumental, economically defined perspective,
compliance with adopted codes of conduct is on
lose footing. Thus, especially in relation to a
companys social and environmental
performance, the establishment of effective
systems for monitoring labour conditions in
factories around the world is at the very heart of
questions directed at the value and legitimacy of
codes of conduct as instruments of corporate
accountability.

3) Discussion :
Business ethics is a subset of ethics. Business
ethics is a specialized study of moral right and
wrong in the business arena. It focuses on moral
standards and rules as they specifically apply to
business strategies and choices, policies and
rules, business institutions and organizational
behaviour. Business ethics is the science of
values and principles in business exchanges.
Business ethics is just as important as acquiring
the moral autonomy principal where your

character or moral values determine what type of

person you are or in this case the type of
business you're running.

So if you dare to do unethical acts in the business

industry to satisfy the companies obligations or
yours, then you and the company shall suffer in
the long run, because according to the golden
mean "Do unto other's what you want to be done
unto you" will always come around one way or
another and another main factor in the business
world for unethical behaviours, if one is not
faithful in little things then he or she can't not be
faithful in bigger things, so the person or
business will never progress as planned. Ethics in
business is important without it we cannot
achieve any satisfaction or profit or integrity and
support from the people or from the business.
Business involves people and everybody Need
their fair amount of returns. It's gives
transparency and long term profit and as a
person we should have a social responsibility
were our surroundings be benefited from our
business. This would be a small contribution
towards the country. Ethics is the discipline
dealing with what is good and bad and with
moral duty and obligation. Ethics in business
nowadays is being unnoticed because the mind

sets of the people are focused on gaining profit.

Although the business' main objective is to gain
more profit and survive in the long run, they
should also take into consideration the ethical
values because somehow ethics can contribute in
the success of a business as cited in the article
on Integrity and Ethical values. Having integrity
and excellence can gain trust and loyalty from
customers or people around the business. Ethics
is good only in real life not for business. Motive of
business to earn money and to run successfully.
But it does not mean that we makes business
unethical because there are two parameter to
judge it. First is be human kind in life and second
is be a look forward in business. It is depend on
different field even if that is something else.
Ethics is moral standards of individual to being
good at corporate sector and socially with
society. To build such better image of company
by internally and externally ethical culture of
corporate in mind of stakeholder play very vital
role.
Making Ethical Judgement

4) Conclusion :
Ethics are the building block of our society and
thus should be the building block of our
corporations. Henry Kravis states, If you build
that foundation, both the moral and the ethical
foundation, as well as the business foundation
then the building won't crumble. It is essential
not to let greed cloud judgment. The colossal
missteps taken by Enron and Arthur Andersen
shall serve as a lesson for those that consider
straying from the path of morality.
Now that you understand the idea of business
ethics, it is important to practice good ethical
behaviour. Leading by example; teaching by

example; being a role model; these are all things

that will come if you practice ethical behaviour
and chose to make the right decisions.

5) References :
Routledge, (2005) John M. Kline Ethics for
International Business, Decision Making in a
Global Political Economy: London.
Berleur, J. and Bruunstein, K. (Eds.) (1996) Ethics
of Computing: Codes, Spaces for Discussion and
Law, Chapman & Hall: London.
Bowman, J.S. and Menzel, D.C. (1998) Teaching
Ethics and Values in Public Administration
Programs: Innovations, Strategies and Issues,
SUNY Press: Albany.
Kallman, E.A. and Grillo, J.P. (1996) Ethical
Decision Making and Information Technology: An
Introduction with Cases, McGraw Hill.

6) Appendices:
www.luc.edu/depts/business/sbe/index.htm
www.depaul.edu/ethics/
www.ethics.ubc.ca/resources/
www.luc.edu/depts/business/sbe/index.htm