Ethics – Definition and Concept Ethics is the study of

what is right or wrong in human conduct. This is a branch of Philosophy which

studies moral principles. Hence, Ethics is also known as Moral Philosophy.

Ethics vs Morals

Many people use the words Ethics and Morality interchangeably. However, there is
a difference between Ethics and Morals.

To put it in simple terms, Ethics = Morals + Reasoning.

To have an ethical viewpoint, you should be able to give some reason for it. Yes,

Ethics is Moral Philosophy, and Philosophy is all about reasoning 🙂

For example, you might feel that it is morally wrong to steal, but if you have an
ethical viewpoint on it, it should be based on some sets of arguments and analysis
about why it would be wrong to steal.

To be moral is all about adhering to what is described (by society or religion). But
to be ethical, you should figure out what is right – by applying some principles and
considering all the complexities involved. Clearly, the ethical life is the harder
path.

Ethics and Morals – An Analogy with a Car Driver and an

Automobile Engineer

Let’s take the case of a car driver and an automobile engineer. The car driver
knows how to drive a car, but he may not know the engine mechanism or design
principles. However an automobile engineer is concerned with how the car works,
and the principles involved.
Connecting the above example with ethics and morals, you can see that following
morals is just like driving the car without understanding the working principles of
the engine. But if you follow ethical principles – you would be using reasoning and
analysis (just like the automobile engineer in the above example) to understand the
situation/case better. If the engine starts to create trouble, the engineer may be able
to use the problem-solving approach as well.

Ethics vs. Morals

Ethics and morals relate to “right” and “wrong” conduct. While they are
sometimes used interchangeably, they are different: ethics refer to rules
provided by an external source, e.g., codes of conduct in workplaces or
principles in religions. Morals refer to an individual’s own principles
regarding right and wrong.

Comparison chart

Ethics versus Morals comparison chart

Ethics
What are The rules of conduct recognized in respect to
they? a particular class of human actions or a
particular group or culture.
Morals
Principles or habits with respect to
right or wrong conduct. While
morals also prescribe dos and
don'ts, morality is ultimately a
personal compass of right and
wrong.

Where do Social system - External Individual - Internal

they come
from?

Why we do Because society says it is the right thing to Because we believe in something
it? do. being right or wrong.

Flexibility Ethics are dependent on others for definition. Usually consistent, although can
They tend to be consistent within a certain change if an individual’s beliefs
context, but can vary between contexts. change.

The "Gray" A person strictly following Ethical Principles A Moral Person although perhaps
may not have any Morals at all. Likewise, bound by a higher covenant, may
one could violate Ethical Principles within a choose to follow a code of ethics as
given system of rules in order to maintain it would apply to a system. "Make
 Ethics versus Morals comparison chart

Ethics Morals
Moral integrity. it fit"

Origin Greek word "ethos" meaning"character" Latin word "mos" meaning

"custom"

Acceptabilit Ethics are governed by professional and legal Morality transcends cultural norms
y guidelines within a particular time and place

Source of Principles
Ethics are external standards that are provided by institutions, groups,
or culture to which an individual belongs. For example, lawyers, policemen,
and doctors all have to follow an ethical code laid down by their profession,
regardless of their own feelings or preferences. Ethics can also be
considered a social system or a framework for acceptable behavior.
Morals are also influenced by culture or society, but they are
personal principles created and upheld by individuals themselves.

Consistency and Flexibility

Ethics are very consistent within a certain context, but can vary greatly
between contexts. For example, the ethics of the medical profession in the
21st century are generally consistent and do not change from hospital to
hospital, but they are different from the ethics of the 21st century legal
profession.
An individual’s moral code is usually unchanging and consistent across all
contexts, but it is also possible for certain events to radically change an
individual's personal beliefs and values.

Conflicts Between Ethics and Morals

One professional example of ethics conflicting with morals is the work of a

defense attorney. A lawyer’s morals may tell her that murder is reprehensible
and that murderers should be punished, but her ethics as a professional
lawyer, require her to defend her client to the best of her abilities, even if she
knows that the client is guilty.
Another example can be found in the medical field. In most parts of the world,
a doctor may not euthanize a patient, even at the patient's request, as per
ethical standards for health professionals. However, the same doctor
 may personally believe in a patient's right to die, as per the doctor's own
morality.

Origins
Much of the confusion between these two words can be traced back to their
origins. For example, the word "ethic" comes from Old French (etique), Late
Latin (ethica), and Greek (ethos) and referred to customs or moral
philosophies. "Morals" comes from Late Latin's moralis, which referred to
appropriate behavior and manners in society. So, the two have very similar, if
not synonymous, meanings originally.
Morality and ethics of the individual have been philosophically studied for well
over a thousand years. The idea of ethics being principles that are set and
applied to a group (not necessarily focused on the individual) is relatively
new, though, primarily dating back to the 1600s. The distinction between
ethics and morals is particularly important for philosophical ethicists.

Essence, determinants and consequences of Ethics in

human actions
Ethics is all about reasoning about how one should act in a given circumstance –
ie. how to do the right action.

Essence of Ethics
Ethics is the study of morality. The essence of Ethics (core of ethics) is to
understand those philosophies which guide us in determining what is right or
wrong.

Determinants of Ethics
Determinants are the sources from which the ethical standard arises. There are
multiple determinants of ethics like

 Religion
 Law
 Society
 Individual
 Knowledge
 Time

Consequences of Ethics
A consequence is the outcome of any act. Doing good with proper reasoning
(being ethical) has many positive consequences like

 Safeguarding the society.

 Feeling good.
 Creating credibility.
 Satisfying basic human needs etc.

However, being unethical has many negative consequences like

 Loss of trust.
 Nepotism.
 Corruption.
 Crimes etc.

Dimensions of Ethics

Ethics is not just a theoretical science, it has a lot of applications in day to day life.
Being multi-dimensional in nature, ethics is divided into four main branches. They
are:

1. Meta-Ethics (Ethics about Ethics)

2. Prescriptive Ethics (Normative Ethics)
 3. Descriptive Ethics (Comparative Ethics)
4. Applied Ethics.

Ethics in Private and Public relationships

Individuals should be ethical in both private and public relationships. In doing so,
they should also try to achieve a right balance between private an public ethics.

Ethics in Private Relationships

Private relationships largely involve relations with family and friends and hence
are informal in nature. Private relationships are often driven by emotions and not
by reasoning. This can result in unethical practices.
For example, helping your friend to cheat in an exam (unethical). Also, remember
the Ramayana story where Kaikeyi tried to put her son Bharata on the throne,
ahead of Rama – the elder son of Dasharatha (unethical).

Ethics in Public Relationships

Public relationships involve relations which are formal in nature. This can include
co-workers, government officials, or strangers. There can be legal or social
obligations as well.

Ethics in public relations can come into play at:

 Social Ethics – tolerance towards other sections, peace and harmony

etc.
 Political Ethics – constitutional ethics, national interest etc.
 Organisational Ethics – impartiality, honesty, hard work,
efficiency, corporate governance etc.
 International Ethics – ethics in diplomacy, respecting international
treaties etc.

There are some principles and rules you must follow in order to manage a
successful business. These standards are referred to as business ethics. Today’s
businesses place a high value on ethics because it might damage their
reputation and performance.

But what are business ethics, why are they important, and what are the types
of business ethics? As we delve further into understanding corporate ethics,
this guide will provide the answers to these queries.

What Are Business Ethics?

Cambridge dictionary defines business ethics as “the rules, principles, and

standards of deciding what is morally right or wrong when working.” So,
business ethics refers to the implementation of appropriate business practices
and policies in the workplace.

It deals with controversial topics such as corporate governance, insider

trading, bribery, discrimination, social responsibility, and fiduciary
responsibilities. This way, through business ethics, there is a basic level of trust
between consumers and the company.

Nonetheless, business ethics is not there only to differentiate between wrong

and right; it also deals with reconciling what legal actions should be taken and
maintaining a competitive advantage over other businesses.

Why Are Business Ethics Important?

While doing business is essential to the company, carrying out work correctly
is critical. It affects the business’s reputation since investors are less likely to
buy stock or invest in a company that operates unethically. Therefore, the
ethical operation is directly linked to short-term and long-term profitability.

With strong business ethics, a company is sure to work legally, protecting both
its workers and clients. These principles preserve manufacturing standards,
keep businesses honest and fair, and stop misleading or unfounded product
claims. A strong ethical business culture also supports better performance and
reduces employee burnout, among other things.

Principles of Business Ethics

Long-term success can be attained more sustainably and steadily by

succeeding legally and ethically, so here are 11 important principles of
business ethics.

Accountability

Ethical workers understand and take personal accountability for the morality of
their actions toward themselves, their coworkers, their businesses, and their
communities. Accountability necessitates a complete dedication to the ethics
of all decisions, acts, and relations.

Respect for others

Respect is shown by a complete commitment to the human rights, dignity,
freedom, interests, and privacy of every staff member. It entails accepting that
everyone deserves to express their thoughts and opinions without fear of
retaliation or other discrimination. Executives who uphold ethics treat
everyone with respect and dignity, regardless of gender, ethnicity, or national
origin.

Leadership

Leadership is a commitment to excellence through ethical decision-making.

Companies and business executives strive to set a good example through their
actions and by supporting the development of a culture that values moral
reasoning and ethical decision-making.

Honesty

Everyone on staff must be dedicated to speaking the truth in all interactions

and all acts. This never includes intentionally making false assertions,
exaggerations, misrepresentations, or selective omissions. Regardless of the
news, positive or negative, an ethical employee will treat them with equal
sincerity.

Compliance with rules

Companies can create more specialized policies by starting at the macro level
and using these industry rules as a framework. Companies must establish
methods to carry out and enforce these principles in addition to writing a code
of ethics. Additionally, consider adding scenarios that team members can
discuss and work through into regular training on the company’s procedures.

Loyalty

Being loyal to coworkers, clients, business partners, and suppliers, as well as

never disclosing information that has been acquired in confidence, are ways to
demonstrate loyalty. Loyal employees avoid conflicts of interest, contribute to
preserving and enhancing the company’s good name, and lift the spirits of
their coworkers.
Environmental concern

Business owners, staff members, and customers should continue to pay

attention to the global climate situation. Making decisions that limit or reduce
your negative influence on the environment is part of ethical business
practices. Examples include:

 lowering carbon emissions

 reducing the amount of garbage produced
 promoting energy-saving measures

Transparency

Making corporate information and policies accessible to the relevant parties is

necessary if an organization is committed to transparency. It involves, for
instance, disclosing the standards for pricing increases, salaries, hiring, issuing
promotions, dealing with violations at work, and terminating personnel.

Integrity

Strong integrity can affect your honesty and commitment to laws and
regulations, which is true whether you work with others or alone.
Organizations and individuals exhibit integrity by acting and speaking
consistently, which fosters confidence and trust. Additionally, integrity entails
maintaining promises, upholding obligations, meeting deadlines, and
refraining from dishonest behavior in personal and professional endeavors.

Fairness

Treating others fairly and as you would like to be treated must be the
cornerstone of all trades and relations. Fairness entails treating everyone with
respect and on an equal footing, never abusing your position of authority, and
never taking advantage of someone else’s flaws or errors to further your own
or your company’s interests. Fairness in the workplace fosters a community
where workers feel at ease, which raises engagement.
Respect for laws

Organizations are required to abide fully by all local, state, and federal
regulations and laws. Businesses and employees who follow the law also
follow any other mandatory organizational rules, practices, and processes.

Types of Business Ethics

Corporate social responsibility

Corporate social responsibility, or CSR, requires that firms act responsibly. All
stakeholders, including workers, clients, suppliers, and the communities where
enterprises operate, have their interests protected. Humane employment
behavior, environmental protection, and charitable activities are a few
examples of CSR.

Technology ethics

Technology ethics are rules that can be applied to technology and include
things like risk management and individual rights. With companies adopting
e-commerce procedures, customer privacy, personal information protection,
and ethical use of intellectual property are all part of technology ethics.

Personal responsibility

Any company employee will be required to demonstrate personal

responsibility, whether at the executive or entry level. This could entail carrying
out the tasks your business manager has given you or just performing the
duties listed in your job description. When you make a mistake, you accept
responsibility for it and take the necessary steps to correct it.

Fairness
Favoritism is a serious ethical violation. Every person has some biases of their
own. However, preferences and personal convictions shouldn’t be allowed to
influence decisions in the workplace. The company must guarantee that
everyone has an equal opportunity for advancement.

The Bottom Line

Companies construct business ethics to encourage moral behavior among

their workforce and win over important stakeholders like customers and
investors. The best course of action if you want to run a successful business is
to implement these business ethics as soon as possible.

8 Ethical Issues Businesses Face Today

One of the greatest challenges for any business owner is navigating ethical issues in business.
Whereas some ethical issues in business are covered by laws, the requirements around others
are more murky. In these cases, it’s up to the business owner and managers to hold
employees accountable for unethical actions — and, of course, to…

Laura Holton
USA
One of the greatest challenges for any business owner is navigating ethical issues in business.
Whereas some ethical issues in business are covered by laws, the requirements around others
are more murky. In these cases, it’s up to the business owner and managers to hold
employees accountable for unethical actions — and, of course, to behave ethically
themselves.

Ethical issues in business today are just as widespread as ever, perhaps even more so. For
instance, 40 percent of employees believe that their company has a weak or weak-leaning
ethical culture. Plus, 30 percent say that they have seen misconduct last 12 months.

Ethical Issues in Business: The Definition

Before going any further, it’s important to understand what we mean by ethical issues in
business today.

Ethics is a broad term. At its core, acting ethically in business means building a company
around integrity and trust as well as complying with regulations. However, there are many
other issues that fall under the ethical issues in business definition, including empathy,
diversity and acceptance, and carrying out business in accordance to the company’s values.

Types of Ethical Issues in Business

If you are to run an ethical business, you first need to know what types of issues you can
expect to face and may need to overcome.

1. Discrimination
One of the biggest ethical issues affecting the business world in 2020 is discrimination. In the
last few months, many corporations have come under fire for lacking a diverse workforce,
which is often down to discrimination. However, discrimination can occur at businesses of all
sizes. It applies to any action that causes an employee to receive unequal treatment.

Discrimination is not just unethical; in many cases, it is also illegal. There are statutes to
protect employees from discrimination based on age, gender, race, religion, disability, and
more. Nonetheless, the gender and race pay gaps show that discrimination is still rampant.
Other common instances of discrimination include firing employees when they reach a
certain age or giving fewer promotions to people of ethnic minorities.

2. Harassment
The second major ethical issue businesses face is harassment, which is often related to racism
or sexism. This can come in the form of verbal abuse, sexual abuse, teasing, racial slurs, or
bullying. Harassment can come from anyone in the company, as well as from customers. In
particular, it is an ethical issue for the business if a supervisor is aware of harassment from a
client and takes no action to prevent it.

In addition to causing a toxic workplace, harassment can cause employees to leave the
company prematurely — a second reason why some businesses lack diversity. Harassment
can have a long-term impact on employees: psychologically, in terms of earnings, and even
impacting a person’s entire career path.
3. Unethical Accounting
Publicly-traded companies may engage in unethical accounting to appear more profitable
than they actually are. In other cases, an accountant or bookkeeper may change records to
skim off the top.

4. Health and Safety

Another type of ethical issue that is often protected by law is health and safety. Companies
may decide to cut corners to reduce costs or perform tasks faster. As well as injuries, failing
to take workers’ safety into account can lead to psychosocial risks (like job insecurity or lack
of autonomy), which can cause work-related stress.

5. Abuse of Leadership Authority

Abuse of power often manifests as harassment or discrimination. However, those in a
leadership role can also use their authority to pressure employees to skip over some aspects
of proper procedure to save time (potentially putting the employee at risk), punish workers
who are unable to meet unreasonable goals, or ask for inappropriate favors.

In addition, abuse of authority can extend beyond the workforce. Managers can use their
position to change reports, give themselves credit for the work of a subordinate, misuse
expenses, and accept gifts from suppliers or clients.

6. Nepotism and Favoritism

Nepotism is when a company hires someone for being a family member. Favoritism occurs
when a manager treats an employee better than other workers for personal reasons.

Not only are nepotism and favoritism unfair, they are also disheartening to employees.
Workers often find they have to work much harder to receive a promotion or other rewards.

7. Privacy
Employees have recently found that the distinction between work life and personal life has
become less clear. This is mainly due to the advances in technology.

For one thing, employers may punish for posts on social media, particularly if they complain
about work conditions or the company as a whole. Employers may even fire workers who
post controversial statements that go against company values.

Another ethical issue surrounds the use of devices belonging to the company. Employers can
now monitor all worker activity on laptops and cellphones. Whereas this is supposed to check
that employees are sticking to work-related activities during the business day, some
employers take it further, tracking keystrokes and reading emails. The question is where to
draw the line between monitoring and spying.

8. Corporate Espionage
The opposite to the above can also happen: workers can misuse company data. An employee
may steal intellectual property or provide a competitor with information about a client.
Usually, this is for monetary purposes, but it can also help an employee secure a position at
another firm.
How to Avoid Ethical Issues in Business
A common method businesses use to manage ethical issues is to simply deny the problem
exists. Companies often combine this with a gag order to stop employees talking. If you want
to maintain a good reputation, this is the worst thing you can do. After all, sooner or later,
the unethical behavior will come to light.

A better strategy is to take an active role, seeking out and correcting unethical behaviors as
early as possible. There are a few key tactics that every business owner needs to implement.

Create Company Policies

Make sure employees read company policies when they start working at your business.
Include both a privacy policy and a social media policy. The first should tell workers what
computer activity and other information you will be able to access; the second should lay out
how you expect employees to behave publicly on social media.

Monitor Only Pertinent Information on Laptops and Other Devices

It may be necessary to track employee activity to some extent (particularly if you are
concerned that workers are spending too much work time on personal activities — which, in
itself, can be an unethical behavior). However, you don’t want to go overboard and create a
culture of distrust.

Provide Ongoing Training

This should cover aspects like harassment prevention. It’s worthwhile seeking outside
support for this from a reputable agency or professional, as low-quality training can
even make the problem worse.

Require Employees to Sign a Nondisclosure Agreement

Employees should sign a nondisclosure agreement before they start working with any
sensitive information. To create an effective deterrent, specify that violating agreements will
result in severe penalties.

Create a Meritocracy
Strive to create a meritocracy where you reward employees according to performance.

Take an Active Role in Daily Activities

Become as involved as you are able in the day-to-day activities at your company. This could
help you detect harassment in its early stages and prevent theft, whether monetary or of
company materials.

Double Check Your Books on a Regular Basis

By checking your books regularly, you’ll notice if anyone is stealing from you. In the case
you do detect theft, you’ll need to decide whether firing the employee is enough or if it’s also
necessary to report the crime to the law enforcement.

Ethical Issues in Business: Examples

To understand how ethical issues in business can manifest themselves, it’s a good idea to
look at some real life examples.

Enron
An especially infamous example of unethical behavior comes from Enron. For years, the
energy company was submitting inaccurate financial statements. Collusion with the
accounting firm Arthur Andersen LLP meant that Enron’s auditor kept signing off on the
falsified statements.

When the truth finally came out, both companies went out of business. This led to the
dissolution of thousands of jobs and significant losses for Enron shareholders.

Fox News
Sexual harassment and abuse allegations against figures high up in Fox News started in 2016
— just over a year before the #MeToo movement took off. Multiple women at the television
network said that sexual harassment from superiors led to them being fired, demoted, or
denied jobs entirely.

It was later revealed that Fox News had settled several lawsuits (some of them years earlier),
but the network was more concerned with covering up the allegations than resolving the
underlying issue.

Tyson Foods
Many companies have come under fire in recent months for not taking steps to protect
employees from COVID-19. Some of the worst offenders are the meat processing plants, as
workers are unable to social distance and are rarely entitled to sick days. As a result, plants
across the country have seen outbreaks.

Tyson Foods initially shut a few of its facilities, but the company later reopened everywhere.
Now, it has the highest rate of positive cases of all meat processing plants in the U.S. (at least
according to some estimates). In fact, more than 100 labor rights, food justice, animal
welfare, and environmental justice groups recently sent a letter asking shareholders to
demand a response.

Richemont
Racial discrimination is often subtle, which makes it extra difficult to combat. However, there
have been some instances where discrimination was blatant enough to win a lawsuit. One
example is that of Richemont, the luxury goods company.

After black employee Cheryl Spragg called in sick due to a back injury, the company decided
to spy on her to confirm the veracity of her claim. Spragg, who found the surveillance
intimidating, sued Richemont for both breach of privacy and for being passed over for
promotions three times due to her race. The judge ruled in her favor for both, saying that a
reasonable course of action would have been to ask a health professional for evidence of
Spragg’s injury. Furthermore, the judge found that the company had a preference for white
continental Europeans.
It’s important to be clear about what ethical issues in business you can expect to face for two
main reasons. First, you can ensure that you own behavior and actions are always ethical.
Second, it allows you to develop a positive workplace culture where employees treat each
other with respect and strive to grow the business — rather than seeking purely personal
gains.

Learning about ethical issues in business and how to avoid them is just the start. Take your
strategy to the next level by checking out these top ethical business practices you should be
following.