THE CONTEMPORARY IDEA OF BUSINESS ETHICS

Dr. Savita Mohan, Director, GNIOT MBA Institute, Greater Noida

Business ethics carries significant influence in the corporate world. Not only does it change how businesses operate on a day-to-day- basis, but it also influences legislation around corporate regulation. Find out what business ethics is, why it is important, and how you can spot ethical and unethical behaviors in the workplace. 

Business ethics is the study of how a business should act in the face of ethical dilemmas and controversial situations. This can include a number of different situations, including how a business is governed, how stocks are traded, a business’ role in social issues, and more.

Business ethics is a broad field because there are so many different topics that fall under its umbrella. It can be studied from a variety of different angles, whether it’s philosophically, scientifically, or legally. However, the law plays the biggest role in influencing business ethics by far.

Many businesses leverage business ethics not only to remain clean from a legal perspective, but also to boost their public image. It instills and ensures trust between consumers and the businesses that serve them.

The modern idea of business ethics as a field is relatively new, but how to ethically conduct business has been widely debated since bartering and trading first arose. Aristotle even proposed a few of his own ideas about business ethics.

However, business ethics as we know it today arose in the 1970s as a field of academic study. As part of academia, business ethics were both debated philosophically and measured empirically. As this field of study became more robust, the government began legislating leading ideas in the field into law, thus forcing businesses to abide by certain rules and regulations that were deemed ethical.

Business ethics are important for a variety of reasons. First and foremost, it keeps the business working within the boundaries of the law, ensuring that they aren’t committing crimes against their employees, customers, consumers at large, or other parties. However, the business also has a number of other advantages that will help them succeed if they are aware of business ethics.

Businesses can also build trust between the business and consumers. If consumers feel that a business can be trusted, they will be more likely to choose that business over its competitors. Some businesses choose to use certain aspects of business ethics as a marketing tool, particularly if they decide to highlight a popular social issue. Leveraging business ethics wisely can result in increased brand equity overall.

Being an ethical business is also highly appealing to investors and shareholders. They will be more likely to sink money into the company, as following standard ethical business practices and leveraging them properly can be a path to success for many businesses.

Following business ethics can also be beneficial for the business’ employees and operations. Attracting top talent is significantly easier for ethical businesses. Employees not only appreciate a socially aware employer, but will also perceive them as the kind of business that will act in the best interest of their employees. This produces more dedicated employees and can also reduce recruitment costs.

Achieving trustworthiness typically involves being transparent and honest in all actions and communications. Being trustworthy can have a positive impact both internally and externally. Consumers appreciate openness, as it provides them with insight into how a business operates and conceptualizes the work that they do. Employees also appreciate this quality in a business that they work for.