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BUSINESS ETHICS, FUNDAMENTALS, HISTORY, EXAMPLES AND DILEMMA

Richard T. From George
University of Kansas, Lawrence, USA. Taken from: Values and Ethics for the 21st Century Aug. 2012.

The expression “business ethics” as it is currently used dates back only to the 1970s, although
it has its roots in Antiquity. Its history is forged in three interrelated aspects, each with two
branches. The first, the most extensive and most amorphous, is ethics in the facet of business,
or business ethics. Its two branches are the religious and the secular. The second aspect is that
of academic business ethics, with its philosophical and empirical ramifications. The third is
business ethics as an ethics integrated into business. Its two branches are that of the ethics
officer and that of corporate social responsibility. Each aspect influences the others and is
influenced by the rest. The story begins in the United States but the journey of business ethics
in each country varies and reflects the diverse social, economic and political situations of each
nation. Although business ethics in many nations has reached a level of maturity, a global
business ethic is still in its infancy.
The history of business ethics depends on what we understand by “business ethics”, the term being
used with different meanings and varying in part depending on the country. The term currently used
has its origins in the United States and its use spread in the seventies. The history of business ethics in
the United States can be seen as the intersection between three intertwined currents. Each of these can
be divided into at least two corresponding branches. The first current, which I will call the business
ethics current, refers to the long tradition of applying the rules of ethics to business, in the same way
that they have been applied to other aspects of social and personal life. This current can also be divided
into the secular and religious branches. The second current corresponds to the development of an
academic discipline that has been called business ethics. This is also divided into two main branches,
one being the branch of philosophical, normative and critical business ethics, and the other being the
scientific and social branch, mainly descriptive and empirical. The third current corresponds to the
adoption of ethics in business or, at least, what it implies. Again, it is subdivided into the integration of
ethics in business and business practice on the one hand, and the company's commitment to social
responsibility on the other. In the 1980s, business ethics was introduced in Europe and Japan, although
the term did not find a simple translation and its development in each country differed from that
followed in the United States due to sociopolitical and economic differences. It later spread in different
ways to other parts of the world, each time with a different local emphasis and history. Internationally,
it became associated with the United Nations Global Compact, initiated by then-UN Secretary-General
Kofi Annan ahead of the World Economic Forum held on January 31, 1999, which officially took off in
July 2000.
Of the three currents, the first, or business ethics current, is the most amorphous and most widely
followed. This is the sense that the general public, new reporters and commentators, politicians and
business people tend to give to the term. In this sense, business ethics is nothing new, although the term
as such was not used to describe it before the 1970s. The trend represents the widely held belief that
ethics applies to business in the same way it applies to all other aspects of life. The scandals of bribery,
insider trading, false advertising and similar situations, the stories about Enron and Arthur Andersen,
and Bernard Madoff's Ponzi scheme represent what is generally considered misconduct in business and
is associated by the general public with business ethics, or more specifically, with the failure of ethics in
business. The rules of morality that are broken are those that apply to all components of society. The
mere mention of business ethics usually provokes anecdotes about the crimes of some company or
businessman. Peter Drucker, well-known business management theorist, was one of those who
proclaimed the non-existence of something like business ethics, there was only ethics in business. He
saw what he considered business ethics (Drucker 1981) as various attempts to justify clearly immoral
business practices according to the usual standard 2. He was right to launch attacks against such
attempts, but he wrote before the academic discipline was developed and his comments did not include
the discipline as it was actually created. In their actual development, most admitted that the usual rules
of morality applied to business as well as to all other aspects of life.
Bribery, insider trading, and similar scandals are considered business misconduct and are
associated by the general public with business ethics and the failure of business ethics.
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The history of business ethics goes back as long as ethics and business. We can imagine the first barters
based on a sense of equal exchange. I have mentioned two branches, the secular and the religious, and
in both we find a parallel history regarding the development of ethics as applied to business.
The emergence of so-called business ethics since the 1970s followed the tumultuous period of the
1960s. It was the time when the civil rights movement and the environmental and consumerist
movements were created in the United States. The Vietnam War motivated protests against the
Government's participation and there was a reaction on the part of many activists against what was
becoming known as the military-industrial complex.
At the end of World War II, the United States was the only major power that had not suffered major
devastation. As a result, American businesses prospered and spread throughout the world. With one
large industry in particular, the enormous growth of the petroleum chemical industries, large-scale
pollution became a problem. Environmental groups emerged to attack the industry. Those who were
familiar with the global emergence (e.g., Barnet 1974) of American business as exploitative added their
voices to the critique of big business. Many of the criticisms were formulated in moral terms, and when
the academic discipline of business ethics emerged in the late 1970s, it did so by offering a vocabulary
and an encompassing framework that criticism took advantage of and that would soon be expanded to
the media and culture. general.
The second branch of the business ethics stream, the religious one, also has a long history and a similar
way of filtering and influencing the general thinking of business ethics. Many entrepreneurs live their
business lives guided by their religious moral beliefs, and many of those affected by business practices
evaluate them through the same prism. The most important religious influence on American economic
culture is Judeo-Christian. Others, such as Islam and Buddhism, Hinduism or Confucianism, are, of
course, the main religious influence on business ethics in the countries in which they are dominant. The
origins of business ethics in the Judeo-Christian tradition date back at least to the Ten Commandments
(Exodus, 20: 1-17; Deuteronomy 5: 7-21), particularly those not to steal and not to bear false witness or
lie. In the Middle Ages the Church long prohibited usury and the practice of making money with money,
however, it eventually changed to prohibit only excessive interest, rather than all interest on payments.
Christianity has always been ambivalent towards business and the rich. Christ's response to the rich
man when he said "it is easier for a camel to go through the eye of a needle than for a rich man to enter
the Kingdom of Heaven" (Matthew, 19: 23-24, Mark 10: 24-25 and Luke 18:24-25) captures that
ambivalence. The Church has a long history of concern for the poor and charity to all who need it. But
he never raised his voice against slavery, for example, and Saint Paul even warned slaves to obey their
masters (Colossians, 3: 22). It was not until the end of the 19th century that the Catholic Church created
a social justice program when Pope Leo XIII (1891) published an encyclical, Rerum Novarum, which
established the precepts for a fair wage. Other later popes have developed social thought, adopting a
defense of the worker. John Paul II, in the encyclicals Laborem exercens (1981) and Centesimus annus
(1991), morally evaluates and criticizes both socialism and capitalism and establishes the needs of
developing nations. It outlines what is known as a “preferential option for the poor.” Although the
Catholic bishops of the United States also presented a brief on economics (Economic Justice for All), the
impact on the business community and the general public has not been significant. In the Protestant
tradition, Calvinism developed what became known as the Protestant (or Puritan) work ethic, namely
the doctrine that hard work was a calling and a means to success, and that Economic success was a sign
of a person's predestined salvation. That tradition was combined with the North American belief in
hard work as the path to success.
The notion of business ethics as ethics in business continues today. It is part of popular culture and
finds expression in media coverage of ethical and legal abuses in business, corporate scandals and their
repercussions. Invariably, after a scandal there will be some columnist or politician who points to
business schools and their failure in the deontological training of students, or the failure of business
ethics as a discipline. The dominance of business ethics in popular culture is exemplified by the
popularity of films such as They Were All My Children, Wall Street, Network, and Silkwood, among
many others. Although what the concept of business ethics entails varies from country to country,
depending on socioeconomic and historical conditions, there is a basic meaning in all of them to place
ethics in business as in other aspects of life. This seems clear when we see the popular protests when
the endemic corruption of a government becomes public, when the rulers are willing to receive bribes
from large companies and enrich themselves at the expense of the citizens of a country.
This very general and somewhat amorphous meaning of business ethics was not clearly articulated or
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even identified as a phenomenon until business ethics was developed as an academic discipline. It is to
this story that we now turn.
Those numerous movements that emerged in the United States in the sixties and seventies motivated
attacks on the industry and responses from it. Business schools in the 1960s saw the emergence of
courses on the social aspects of management and the social responsibility of business. But they were
quite improvised and even those at the forefront of the academic movement in this direction admitted
that the courses lacked cohesion in their foundations and approaches. This led in turn to what is known
as business ethics in the second sense. The term, as it is currently used, emerged with the incorporation
of a group of philosophers into this field and was forged from the term “medical ethics” developed in
the 1960s. Business ethics soon emerged as an academic discipline.
Business ethics as an academic discipline is the systematic study of morality in business, business
practices, values and everything we find in reality.

Before the creation of business ethics as a discipline, there were individual courses here and there on
the moral aspects of business and lectures and articles on business ethics. The term “business ethics”
used in the early literature referred to the meaning of the term ethics in business. What differentiated
business ethics as an academic discipline from the 1970s onwards from business ethics was that the
discipline attempted to systematically study the entire range of ethical aspects of business as a
complete set. The philosophers involved initially generally began with a comprehensive ethical
framework offered by ethical theory, a kind of version of utilitarianism (which studied the
consequences of actions) or a Kantian approach to ethical issues (which takes rights and obligations as
basics) or an Aristotelian approach (which places virtue at the center and studies the personality of
moral agents, in this case, agents in the business world) or a combination of two or more of them. As
with ethics in the business stream, the business ethics movement could be divided into two branches,
the philosophical, normative and prescriptive, and the empirical, descriptive and followed by those who
received training in social sciences. In a sense, both branches have merged. The empirical current,
traditionally based on the already existing social aspects of management and on the courses and
structures on corporate social responsibility in business schools and business administration. The
philosophical current, coming from the departments of philosophy and the field of applied ethics,
whose predecessor was medical ethics.
In its development, business ethics came to include the analysis of six different levels of ethical concern.
The first is the level of the individual. This addresses not only what individuals should do to face ethical
dilemmas or moral problems in business, but also aspects of personality, the growth of the individual at
work, the virtues of business life and the integration of ethics. in working with one's ethics and ethical
obligations as a member of a family, a community and a larger and more extensive society. The
emphasis on personality development is particularly important for those who apply the Aristotelian
approach to business ethics. The second level is that of the company. It affects aspects of internal
business structures that tend to reinforce and promote ethical employee activity or structures that tend
to promote unethical activity (characterized by the premise: “I want this done by such and such a date
and I don't care.” how you get it.” This is the level of business policy, business culture, the
responsibilities of the different shareholders of a company, and corporate social responsibility to the
extent that said responsibility is an ethical responsibility. The third level is that of a specific industry.
Extractive industries raise particular ethical issues, for example, the chemical industries, and many
others. In many cases, ethical aspects cannot be resolved at the level of a specific company, but must be
done at the level of the industry. The next level is the national level, and here there are aspects related
to legislation, controls applied to business activity, protection of workers and consumers, limitations on
pollution, prevention of child exploitation, etc. The fifth level is international, and deals with the
multiple ethical aspects arising from multinational companies, in particular, the actions of
multinationals from developed countries that operate in less developed countries in which local laws do
not adequately protect the country or its citizens. The sixth level is the global level and deals with the
ethical responsibility of companies to help with the solutions given to global issues such as ozone
depletion, global warming and similar issues that can only be resolved globally, but of which they are
responsible both companies and nations.
As Norman Bowie explained, the first conference on business ethics was held in 1974 (Bowie 1986) and
he chaired a committee formed to develop a curricular model for business ethics courses. Several
essays were written (Tom Beauchamp and Norman Bowie, Thomas Donaldson and Patricia Werhaney,
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Vincent Barry) and ethics texts, the first authors being Richard de George and Manuel Velásquez.
The texts were intended to cover the range of ethical aspects of business, starting with metaethical
questions such as whether the moral language typically used to refer to human moral agents could
appropriately be used to refer to companies, whether companies were moral agents, whether one could
speak in a meaningful way about the conscience of a company, and whether the criteria of moral
responsibility (with knowledge and will) made sense when applied to companies. The questions
received answers in different ways, some reduced the actions of companies to the actions of the
individuals who constituted them, others made the necessary adaptations in the use of moral terms to
apply them correctly to business actions . Regulatory aspects covered the spectrum of business
activities, starting with the moral justification (or rejection) of economic systems – in particular,
capitalism and socialism – and passing through the different areas of business: manufacturing,
management, marketing, finance, business management, workers' rights, business and the
environment, and, finally, the international dimensions of business and the impact of computers and the
Internet on business conduct. The international dimension included the actions of multinational or
transnational companies, child labor and exploitation of less developed countries, both in relation to
employment and in relation to the environment, bribery and operations in corrupt environments. With
the disappearance of the Soviet Union in 1991, capitalism seemed to emerge as the dominant economic
system and the role of ethics in countries transitioning to incipient capitalism grew in importance.
The philosophical approach was normative and critically studied the moral justification of private
property, the proper role of Government and government regulation of business, as well as the morality
of business practice. While business ethics focused on scandals and abuses that attracted the attention
of the general public, business ethics scholars examined the structure of capitalism and business
structures, sometimes expressing the underlying moral justification of the structures and existing
practices, and others criticizing them from a moral perspective and arguing for change.
The descriptive component of business ethics was developed by those who received training in the
social sciences and worked in business schools. This branch arising from the social aspects of the
business world was first developed in the 1960s and was initially not included in the framework of
business ethics. The relationship between social aspects in business matters or social aspects in
management and business ethics is somewhat controversial: on the one hand there are those who seek
to incorporate social aspects into business ethics as part of the discipline and on the other , those from
philosophical business ethics who defend its incorporation as an empirical part of their discipline. The
debate has historical origins. The philosophers who emerged in the seventies and eighties intruded into
a territory that in some way students of the social aspects of business had fenced off as their own. The
tension continues today. Whether business ethics included corporate social responsibility or whether
corporate social responsibility included business ethics was an internal debate. However, something is
drawn from this debate, the philosophical branch of academic business ethics highlights the normative
aspects of business ethics and the social science branch highlights the descriptive aspects of business
ethics, through the study and the description of the practices actually found in the business world. The
latter studied the different effects of different practices, as well as the different attitudes towards
certain business practices in different societies. The social aspects of management include ethics among
its components, but business ethics contains much more than social aspects and not all social aspects
are ethical aspects, even when many social aspects can be considered from a moral perspective and we
can make an assessment moral of the economic and legal aspects of business.
The descriptive approach has proven to be more friendly to business since it is less critical and due to
its practical quality it better fits the empirical approach to business. The philosophical approach was
regarded with suspicion and, to a certain extent, continues to be so by many business agents and, at
first, those who defended the philosophical approach to business ethics were not well received in the
business world by those who defended it. social aspects, nor by business schools in general. All of them
questioned the credentials of those who used philosophy to evaluate complex aspects of the business
world, and the philosophical approach was often considered antithetical to business. At the same time,
many philosophy departments felt that those involved in the study of business ethics were not really
doing philosophy as they defined it. Despite these initial reactions, before the 1990s, business ethics
was consolidated as a generally accepted academic discipline. The emphasis was initially placed on
large companies and it is these that continue to be mainly affected. However, research into ethical
aspects in relation to small and medium-sized businesses is booming.
In 1980, the Society for Business Ethics (SBE) was founded, mainly by those linked to the philosophical
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movement. The social aspects of management division of the Academy of Management, the most
important organization for students of the descriptive aspect of business ethics, had existed since 1976.
The Society for Business Ethics initially met with the American Philosophical Association. In 1989 it
changed its annual meeting to precede the annual meeting of the Academy of Management, although it
continued to hold sessions jointly with the American Philosophical Association. The Society for
Business Ethics continues to be the premier academic home for business ethics. In 1991 he began
publishing the quarterly edition of Business Ethics Quarterly with Patricia Werhane as editor.
The philosophical branch of academic business ethics highlights the normative aspects of
business ethics and the social science branch highlights its descriptive aspects.

Conferences began to be held with increasing frequency on the topics and aspects of business ethics. In
1976, the Bentley Center for Business Ethics was founded and continues to grow today. Other business
ethics centers were created in different universities and journals dedicated to the recent discipline
began to emerge. In just ten years, at least a dozen new centers have appeared. In 1988, the
International Society for Business, Ethics and Society was created and helped promote the growth of
business ethics in countries around the world. Its first meeting was held in 1992 and the First World
Congress on Business, Economics and Ethics was held in Japan in 1996. Other world congresses
followed, held in São Paulo (2000), Melbourne (2004), Cape Town (2008) and Warsaw (2012). In
1993, the Japan Society for Business Ethics (JABES) was created, and the 1996 world congress led to
the creation of societies for business ethics in Latin America and the Latin American Association of
Ethics, Business and Economics (ALENE) in 1997.
Business ethics has developed and expanded as business has. In 1989, Thomas Donaldson published the
first book on international business ethics, which was followed by Richard De George's (1993). Both
reflected the reality of the transition from business to the international arena, so new aspects arose that
had to be addressed and for which there were no non-intuitive or simple solutions. The globalization of
business was the next step, and computing, the digital revolution and the progress of information
technology further changed business and gave rise to new ethical issues related to privacy and
intellectual property, among others.
In 1984, R. Edward Freeman published a book in which he advocated a reconceptualization of the
company, which had a great influence on both business ethics and the vocabulary used by businesses to
describe their activities. In the United States, companies have a legal obligation to manage the profits of
their shareholders. On occasion, some companies and commentators have given this premise a meaning
that has allowed them to establish at all times the priority of shareholders over the rest, whose
interests can be legally considered secondary. This is the shareholder's vision of the company. Freeman
explains that companies have obligations towards their stakeholders – their shareholders, employees,
suppliers, customers and anyone else with an interest in the company. The reinterpretation does not
change companies' ethical obligations, but it does make it easier for them to argue that sometimes other
stakeholders take priority over shareholder interests.
At the beginning of the century, business ethics as an academic discipline had begun to enter its stage of
maturity. However, since its creation occurred in the United States, the empirical branch grew slowly
compared to the philosophical branch. Scandals such as Exxon, WorldCom and others uncovered at the
turn of the century led to a flood of books and articles on corporate governance, and the 2007-2008
financial crisis led some to study the ethics of the financial industry. Beyond the borders of the United
States there were those who considered the financial crisis a crisis of the legitimacy of capitalism, and
some turned to an analysis of the ethical justification of financial capitalism. The United States
maintained dominance in the discipline of business ethics, but centers appeared in many countries in
Europe, Asia, South America, Australia, and Africa.
In the United States, the rapidly growing discipline had some impact on business. But the third stream
of business ethics—the incorporation of ethics, or at least what it entails, into large-scale business in
the United States—received the biggest boost from government legislation. The two branches that
prevailed were business ethics and business social responsibility. The two are often split within the
same company. Before the promulgation of laws by the executive, some companies, such as Johnson &
Johnson, adopted codes on their own and incorporated deontology into their structures. Similarly,
individual companies and industries reacted to public pressure in diverse ways. For example, in 1978,
General Motors and other American companies doing business in South Africa adopted what are known
as the Sullivan principles. Their agreement was not to obey the discriminatory and oppressive laws of
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apartheid in South Africa and to try other tactics, including pressure on the Government, to contribute
to its delegitimization or even its disappearance. In 1984, following the Union Carbide disaster at its
Bhopal, India, plant, which killed thousands of people and injured hundreds of thousands, the chemical
industry adopted a voluntary code that became known as the Responsible Care.
The first government push came in 1977 with the passage of the Foreign Corrupt Practices Act in the
United States. This law prohibited American companies from making payments to senior officials of the
governments of foreign countries to obtain contracts or special favors. It took twenty years for OECD
countries to adopt similar legislation. The second impulse was the Defense Industry Initiative (DII) on
ethics and business conduct (1986). It was an initiative promoted by defense contractors in response to
a series of irregularities in contracts signed with the United States Government. The signatories
(initially thirty and eventually fifty) agreed to submit to a code of conduct, establish ethical training
programs for employees, and develop control mechanisms to detect inappropriate behavior. This
became the model for the United States Federal Sentencing Guidelines for Corporations (1991), which
served as a carrot to the stick of federal legislation. It provided companies with a strong financial
incentive to appoint ethics officers, implement an ethics training program for all employees, and
develop, adopt, and enforce a code of conduct. If they did so and the company, or one of its employees,
were found guilty of having defrauded the Government in some way, the penalty imposed could be
reduced by up to 96% of the maximum penalty of $290 million. The incorporation of ethics into the
company became profitable, and stopped being an expensive complement of perhaps dubious
profitability. The fourth government impulse came with the Sarbanes-Oxley Act in the United States
(2002), enacted in the wake of the Enron scandal and other similar ones involving company
management.
As a result of the legislation, companies faced the new task of establishing a position of deontological
responsibility and introducing codes and control and enforcement mechanisms. For many companies –
although not all – this was new and unknown territory. The overall result was the incorporation of
ethics as part of the structure of many companies.
At the same time, in various ways and in different places, companies came under increasing pressure
from NGOs and the general public to become good “corporate citizens” or commit to the triple bottom
line (economic, environmental and social). ) and otherwise turn their attention toward corporate social
responsibility with respect to the communities in which they operated. This became the second branch
of business ethics in the business stream of business ethics.
Corporate social responsibility has become something that companies can no longer ignore without
risking damage to their public image. However, the emphasis on corporate social responsibility has in
some cases been considered equivalent to business ethics, even when only some of the social
obligations of companies are ethical obligations – others are legal or simply a response to the wishes of
the pressure. from a vocal minority or other groups – and even when companies have many ethical
obligations not included in corporate social responsibility. Many companies have two managers and
two departments: one for corporate social responsibility that is in charge of external obligations and
one internal – a corporate ethics department – that is in charge of internal ethical training and other
aspects. Companies can have exemplary corporate social responsibility programs and be ethically
deficient in other areas of their operations, as was demonstrated in the case of Enron.
Corporate social responsibility has become something that companies can no longer ignore
without risking damage to their public image.
Many multinational companies have adopted codes that cover their practices around the world or have
subscribed to sets of principles such as the Caux principles or the principles included in the United
Nations Global Compact. The Global Compact contains ten principles that address human rights, labor
standards, the environment and corruption. By joining, companies commit to complying with the
principles and establishing the best way to implement them. The initiative has grown to more than
8,000 participants, including more than 5,300 businesses from 130 countries around the world and
hosts six UN agencies. In 2011, the United Nations Human Rights Council ratified a set of guiding
principles on business and human rights that establish a global standard for human rights and business
17. The Global Compact promotes the creation of local networks at national and regional level to share
information, develop appropriate means for the implementation of such principles and encourage other
companies to adhere to them. The pact is compatible with other codes and is ultimately based on self-
regulation.
Furthermore, self-regulation is not necessarily antithetical to government regulation, and both are
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optimally effective when applied together, for example, to abolish oppressive child labor. Although the
United Nations Global Compact identifies itself with corporate citizenship, it encompasses aspects of
both corporate social responsibility and business ethics, as they emphasize respect for human rights.
The way in which the role of corporate social responsibility is developed in most European countries,
where the Government has greater participation than in the United States, varies as do the aspects
governed by business ethics. Unions have more say in European companies than in those in the United
States, and many of the labor rights negotiated in the United States are legislated in Europe. The
security networks implemented are also different. The same thing happens in other parts of the world
and the aspects in developing countries differ from those in developed countries. Although widely
accepted, corporate social responsibility is somewhat a vague concept and often adopted by companies
in response to external criticism without any overarching framework or set of values. In the case of
multinational or transnational companies, there is also ambiguity as to whether a company's social
responsibilities reflect the demands of the society in which it is headquartered or those of the societies
in which it operates. The ethical component of corporate social responsibility is established in any case
by ethical rules and not simply by the demands of groups with vested interests. The globalization of
business has brought with it the globalization of business ethics in its three currents. Although the
emphasis continues to be primarily on the business ethics of each nation or region, with some of the
literature devoted to national or cross-cultural comparisons, the true globalization of business ethics is
still in its infancy. Some attention is paid to global issues such as global warming, but the battle is being
fought at national and regional political venues.
The ethical component of corporate social responsibility is established by ethical rules and not
simply by the demands of groups with vested interests.

What has become clear in the last forty years is that the three strands of business ethics are related to
each other. Sometimes the evolution occurs in the academic business ethics literature to motivate an
increase in public awareness, as advertisers and activists seize on the idea to generate public pressure
that stimulates corporate activity. Otherwise, academic business ethics follows public sentiment or
reacts to business practices. What has also become clear, however, is that business ethics alone is
insufficient to bring discipline over business performance to a level that benefits everyone. Academic
criticism, public protests, self-regulation, and corporate or industrial codes can only go so far. At some
point, government legislation is required. The legislation, however, is national or local. There is no
effective international legislation to accommodate the globalization of business, and corruption at the
government level prevents the growth of business ethics at the local level in many countries. Even some
OECD countries have been lax in this regard, for example in implementing and enforcing national
legislation prohibiting bribery of foreign governments.
However, in 2011 business ethics is no longer considered a contradiction. The public in many countries
is now more aware of the ethical aspects of business than it was forty years ago; Although the academic
discipline of business ethics continues to develop, it has matured and has stopped fighting to establish
itself as such; and the business community has at least begun to consider deontology and enforce
ethical requirements as part of what it must manage and internalize.
Examples
Business ethics
Business ethics or business ethics is a branch of applied ethics or professional ethics that analyzes the
behavior of those who work in the business world, that is, of particular companies and organizations.
Business ethics can be applied from a normative point of view (to indicate what the correct path is) or
from a descriptive vision (to observe how morality operates in business). The way of understanding
business and economic exchange has not been the same from the beginnings of industrial capitalism
until today. Each era brings with it its own concerns and considerations, regarding the general well-
being of society. The need for business ethics, however, arises from the growth and prominence of
companies in the contemporary capitalist world, especially at the end of the 20th century, when the
need to think about the fundamental purpose of companies became obvious. beyond simply generating
profits.
Until then, the logic that seemed to govern the business world was summarized in the phrase of the
American economist and Nobel Prize winner Milton Friedman (1912-2006): “the social responsibility
of companies will be to produce as much profit as possible, observing the basic rules of society, both
those contained in laws and in ethical customs.” However, at the beginning of the 21st century, the vast
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majority of companies have assumed ethical codes and non-economic needs as part of their discourse
and their business mission and vision.
In this way, business ethics has become a necessary tool in the contemporary vision of business and
production, since it allows us to think about the free economic exercise, its moral duties and its place in
a world that struggles to achieve sustainability in the face of to climate change. Among its main themes
are:
1. Personnel recruitment practices.
2. The review, promotion and dismissal of workers.
3. Employment conditions and work environment.
4. The social and ecological responsibility of the company.
5. Acceptable and reprehensible practices for the market.
We should not confuse business ethics with Corporate Social Responsibility, although the latter is one of
the many ways in which corporations try to live up to certain moral standards of society.
Below are some examples of business ethics, expressed in certain specific situations:
1. An auto parts selling company discovers, during a quality control, that its products have a high
probability of breaking, since they are using a new, cheaper material to manufacture them. Putting
quality before profit, the company decides to discard what was produced and reuse the previous
material, instead of lying to its customers.
2. During the transfer of a shipment of raw materials for an industry, an accident occurs and several
contaminating minerals end up at the bottom of a lake. This is an ecological disaster. The company
not only formally assumes responsibility for what happened, but also invests a portion of its profits
in collecting unused minerals and disposing of them in the correct way, and in reviewing and
improving the industrial safety controls of its transportation.
3. A government official proposes to a food importer to hide its products for a month to generate an
artificial shortage and be able to raise product prices. The company, responsibly, refuses the plan
and denounces the official.
4. Factory employees run a tremendous risk in their jobs, since they handle highly flammable material.
The company, therefore, invests in fire detection and combat systems, in protective suits for its
workers, and in an insurance company so that its employees work in the best possible situation.
Examples of ethical dilemmas in the business field
An ethical dilemma is a situation in which the correct path to follow is not entirely clear, and we are
forced to evaluate our options and weigh which path does the least harm or brings the most well-being
to everyone involved. Some examples of these dilemmas in the business field are:
1. Several companies compete with each other for the same business niche. One of them leads in terms
of sales, despite being a younger and smaller company, given that its products are of better quality.
Then its competitors decide to lower their costs and force the young company into bankruptcy,
since they can afford certain losses for a time. Is this an ethical attitude on the part of competing
companies? Can this be considered unfair competition?
2. A gigantic transnational corporation exploits the natural resources of a developing country, amid a
climate of protests and complaints about the ecological impact of its operations. The company
wants to affect the environment less, but sales are at their highest point and it is not advisable to
reduce exploitation for now. What is the moral way of thinking about the matter? What ethical
solutions can be given in the short, medium and long term?
3. A factory receives an offer of robotic labor, capable of working faster, continuously and without
having to provide labor benefits. The company could replace 70% of its workers with robots.
Should I fire the workers? How can this transition towards automation be thought of in an ethical
way, which causes the least possible social impact in the short term? Should the State intervene?
4. At a pharmaceutical company, employee exposure to certain chemicals turns out to be well above
what is acceptable according to international standards, but those employees don't know it yet.
How should the company proceed in the face of this reality, so as not to destroy its image in the
process? Is it moral to fire affected workers before the news becomes public?