Ethics is a branch of social science.

It deals with moral principles and social

values. It helps us to classify, what is good and what is bad? It tells us to do good
things and avoid doing bad things.

So, ethics separate, good and bad, right and wrong, fair and unfair,
moral and immoral and proper and improper human action. In short,
ethics means a code of conduct. It is like the 10 commandments of holy
Bible. It tells a person how to behave with another person.
So, the businessmen must give a regular supply of good quality goods
and services at reasonable prices to their consumers. They must avoid
indulging in unfair trade practices like adulteration, promoting
misleading advertisements, cheating in weights and measures, black
marketing, etc. They must give fair wages and provide good working
conditions to their workers. They must not exploit the workers. They
must encourage competition in the market. They must protect the
interest of small businessmen. They must avoid unfair competition.
They must avoid monopolies. They must pay all their taxes regularly to
the government.
In short, business ethics means to conduct business with a human touch
in order to give welfare to the society.
According to Andrew Crane,
"Business ethics is the study of business situations, activities, and
decisions where issues of right and wrong are addressed."
According to Raymond C. Baumhart,
"The ethics of business is the ethics of responsibility. The business man
must promise that he will not harm knowingly."

Features of Business Ethics

The characteristics or features of business ethics are:-

Code of conduct : Business ethics is a code of conduct. It tells what to do

and what not to do for the welfare of the society. All businessmen must follow
this code of conduct.
Based on moral and social values : Business ethics is based on moral and
social values. It contains moral and social principles (rules) for doing
business. This includes self-control, consumer protection and welfare, service
to society, fair treatment to social groups, not to exploit others, etc.
Gives protection to social groups : Business ethics give protection to
diff erent social groups such as consumers, employees, small businessmen,
government, shareholders, creditors, etc.
Provides basic framework : Business ethics provide a basic framework for
doing business. It gives the social cultural, economic, legal and other limits of
business. Business must be conducted within these limits.
Voluntary : Business ethics must be voluntary. The businessmen must accept
business ethics on their own. Business ethics must be like self-discipline. It
must not be enforced by law.
Requires education and guidance : Businessmen must be given proper
education and guidance before introducing business ethics. The businessmen
must be motivated to use business ethics. They must be informed about the
advantages of using business ethics. Trade Associations and Chambers of
Commerce must also play an active role in this matter.
Relative Term : Business ethics is a relative term. That is, it changes from
one business to another. It also changes from one country to another. What is
considered as good in one country may be taboo in another country.
New concept : Business ethics is a newer concept. It is strictly followed only
in developed countries. It is not followed properly in poor and developing
countries

What Is Ethical Behavior?

Different people have different beliefs about what constitutes ethical behavior. The law
defines what is and is not legal, but the distinctions between moral right and wrong are not
always so clear. In many situations lines between right and wrong are blurred. Such
situations can lead to ethical dilemmas.
When faced with ethical dilemmas, it's important to consider outcomes of the decisionmaking process. One way of dealing with ethical dilemmas is to use the four way test to
evaluate decisions. This test involves asking four questions:
1.

Is my decision a truthful one?

2.

Is my decision fair to everyone affected?

3.

Will it build goodwill for the organization?

4.

Is the decision beneficial to all parties who have a vested interest in the
outcome?

When these four questions can truthfully be answered with a "yes," it is likely that the
decision is an ethical one.
Another way of making sure decisions are truly ethical is by using the publicity test. Ask
yourself how you would feel if your actions were published in your hometown newspaper. If
you would be comfortable having your parents, grade school teachers, and other people find
out what you did, chances are that your decision is an ethical one. However, if you would not
want these individuals to learn about your actions, you probably need to rethink your
decision.

Importance of Ethical Business Decisions

Companies and business people who wish to thrive long-term must adopt sound
ethical decision-making practices. Companies and people who behave in a
socially responsible manner are much more likely to enjoy ultimate success than
those whose actions are motivated solely by profits. Knowing the difference
between right and wrong and choosing what is right is the foundation for ethical
decision making. In many cases, doing the right thing often leads to the greatest
financial, social, and personal rewards in the long run.

There have been many instances in the past when businesses experienced
catastrophic consequences for failure to adhere to ethical business practices.
News Corp, a New York-based international media company owned by Rupert
Murdoch, provides a vivid example of the disastrous consequences of unethical
business behaviors. In June 2011, the world was treated to a shock when
accusations that the company's team of journalists collected news stories through
illegal hacking into telephone communications of unsuspecting victims. The
phone hacking conspiracy affected Britain's general population as well as the
royal family and prominent celebrities. This scandal was allegedly committed by
employees of News International, a subsidiary of News Corp in Britain.

Purpose of ethics in business

usiness ethics are the guidelines a company uses when interacting with entities inside
and outside the company. It is a conscious effort to treat people and companies with
respect and establish a positive working environment. The effects of ethical practices in
business can benefit a company financially and they can also help a company gain the
elements it needs to grow.

Single Entity
A business is seen as a single entity by its vendors, the community, its employees and
other corporations. The actions of the company, and not the actions of any single
individual, dictate how the company is perceived by others. A code of ethics ensures that
the company presents a unified image and maintains a standardized positive image
among all of the internal and external elements it will come into contact with.

Legal Issues
Sexual harassment, discrimination and hazardous working conditions are regulated by
state and federal governments. A company that violates employment laws and standards
can find itself facing fines, lawsuits and injunctions that can cause work to stop. A
company's ethical practices include developing strict guidelines for adhering to
employment laws and avoiding the problems that violating these laws can create.

Business Relationships
A company's ethical business practices give the organization a positive professional
reputation among vendors, clients and potential business partners. Good business ethics
can help create strong business relationships that result in lower product costs, repeat
business from customers and sources of financing for company growth. Maintaining good
ethics sustains these strong business relationships for the benefit of the company and its
business contacts.

Turnover
Employee turnover can be damaging to a small business. A company comes to rely on
the staff it has in place, and having to train new employees due to staff turnover can
become expensive and disrupt growth. The ethical treatment of employees is a key
element in retaining employees and reducing the effects of turnover.

Ethics and decision making

Individuals are often required to make decisions in the business environment every day.
Working for a company often requires following an ethical model or framework when
making these decisions. Business ethics outlines the acceptable behavior companies
expect to see from their employees. Strong decision making and business ethics can also
help companies select the best business opportunities.

Facts
Decision making in business ethics usually requires companies to identify specific ethical
standards, which often means different things to different people. As organizations
continue to grow and expand, new individuals are hired who may not have the same
ethical standards as individuals already working in the company. A difference in ethics
often changes how individuals approach the decision-making process. Companies often
use the organizations mission statement to build a framework for helping individuals
make ethical business decisions.

Types
There are five types of ethical standards: utilitarian, rights, fairness or justice, common
good, and virtue. Utilitarian ethics is a standard that attempts to do the most good and
limit the amount of harm for each individual. A rights approach protects and respects the
moral rights of individuals impacted by decisions. The fair or just style seeks to create
equality among all individuals while the common good method focuses on bettering
society as a whole. The virtue tactic centers on the ideal virtues necessary for promoting
individuals for the company.

Functions
Business ethics is a tool companies use to ensure managers, directors, or executive
officers act responsibly in various business situations. Ethical decision making attempts
to promote the company as a whole, rather than letting one individual profit from
business decisions. Individuals who consistently make decisions based on their personal
benefit may create legal liabilities for a company that can lead to bankruptcy.

Considerations
Creating an ethical business environment does not happen overnight. Companies may
need to spend time and money training and promoting business ethics among managers
and employees. Companies may also find implementing an ethical decision-making
process may lead to negative feedback from managers or employees. Combating this
negative feedback may be a difficult part of implementing business ethics.

Expert Insight
Companies may use professional consultants, seminars, or other training methods to
educate employees on decision making in business ethics. These outside sources may
also be able to provide companies with an objective review of their current operations
and offer advice on how to implement a strong ethical code in their business operations.
While these professional resources may be expensive, it often helps companies develop
an ethical business environment.