Business Ethics: Business Ethics Is A Form of Applied Ethics or Professional

BUSINESS ETHICS
Business ethics is a form of applied ethics or professional

ethics, that examines ethical principles and moral or ethical
problems that can arise in a business environment. It applies to
all aspects of business conduct and is relevant to the conduct of
individuals and entire organizations. These ethics originate from
individuals, organizational statements or from the legal system.
These norms, values, ethical, and unethical practices are the
principles that guide a business. They help those businesses
maintain a better connection with their stakeholders.
Business ethics refers to contemporary organizational standards,
principles, sets of values and norms that govern the actions and
behavior of an individual in the business organization. Business
ethics have two dimensions, normative business
ethics or descriptive business ethics. As a corporate practice and
a career specialization, the field is primarily normative.
Academics attempting to understand business behavior employ
descriptive methods. The range and quantity of business ethical
issues reflects the interaction of profit-maximizing behavior
with non-economic concerns.
FUNCTIONAL BUSINESS AREAS
1. Finance
Fundamentally, finance is a social science discipline. The
discipline borders behavioral economics, sociology, economics,
accounting and management. It concerns technical issues such
as the mix of debt and equity, dividend policy, the evaluation of
alternative investment projects, options, futures, swaps, and
other derivatives, portfolio diversification and many others.
Finance is often mistaken by the people to be a discipline free
from ethical burdens. The 2008 financial crisis caused critics to
challenge the ethics of the executives in charge of U.S. and
European financial institutions and financial regulatory
bodies. Finance ethics is overlooked for another reason—issues
in finance are often addressed as matters of law rather than
ethics.
2. Human Resource Management

Human resource management occupies the sphere of activity
of recruitment selection, orientation, training and
development, industrial relations and safety issues. Business
Ethicists differ in their orientation towards labor ethics. Some
assess human resource policies according to whether they
support an egalitarian workplace and the dignity of labor.
Issues including employment itself, privacy, compensation in
accord with comparable worth, collective bargaining can be seen
either as inalienable rights or as negotiable. Discrimination by
age (preferring the young or
the old), gender, race, religion, disability, and attractiveness. A
common approach to remedying discrimination is affirmative
action.
Once hired, employees have the right to the occasional cost of
living increases, as well as raises based on merit. Promotions,
however, are not a right, and there are often fewer openings than
qualified applicants. It may seem unfair if an employee who has
been with a company longer is passed over for a promotion, but
it is not unethical. It is only unethical if the employer did not
give the employee proper consideration or used improper criteria
for the promotion. Each employer should know the distinction
between what is unethical and what is illegal. If an action is
illegal it is breaking the law but if an action seems morally
incorrect that is unethical.
3. Sales and Marketing

Marketing ethics came of age only as late as the
1990s. Marketing ethics was approached from ethical
perspectives of virtue or virtue
ethics, deontology, consequentialism, pragmatism and
relativism.
Ethics in marketing deals with the principles, values and/or ideas
by which marketers (and marketing institutions) ought to
act. Marketing ethics is also contested terrain, beyond the
previously described issue of potential conflicts between
profitability and other concerns. Ethical marketing issues
include marketing redundant or dangerous
products/services transparency about environmental risks,
transparency about product ingredients such as genetically
modified organisms possible health risks, financial risks,
security risks, etc., respect for consumer privacy and
autonomy, advertising truthfulness and fairness in pricing &
distribution.
4. Production
This area of business ethics usually deals with the duties of a
company to ensure that products and production processes do
not needlessly cause harm. Since few goods and services can be
produced and consumed with zero risks, determining the ethical
course can be problematic. In some case, consumers demand
products that harm them, such as tobacco products. Production
may have environmental impacts, including pollution, habitat
destruction and urban sprawl. The downstream effects of
technologies nuclear power, genetically modified
food and mobile phones may not be well understood. While
the precautionary principle may prohibit introducing new
technology whose consequences are not fully understood, that
principle would have prohibited the newest technology
introduced since the industrial revolution. Product testing
protocols have been attacked for violating the rights of
both humans and animals. With technology growing there are
sources and websites that provide list and information on
companies and business and that are "green" or do not test on
animals. These companies often advertise this and are growing
in popularity among the younger generations.
5. Property
The etymological root of property is the Latin 'proprius' which
refers to 'nature', 'quality', 'one's own', 'special characteristic',
'proper', 'intrinsic', 'inherent', 'regular', 'normal', 'genuine',
'thorough, complete, perfect' etc. The word property is value
loaded and associated with the personal qualities of propriety
and respectability, also implies questions relating to ownership.
A 'proper' person owns and is true to herself or himself, and is
thus genuine, perfect and pure.
ISSUES
Ethical issues often arise in business settings, whether through
business transactions or forming new business relationships.
An ethical issue in a business atmosphere may refer to any
situation that requires business associates as individuals, or as a
group (for example, a department or firm) to evaluate
the morality of specific actions, and subsequently make a
decision amongst the choices. Some ethical issues of particular
concern in today's evolving business market include such topics
as: honesty, integrity, professional behaviors, environmental
issues, harassment, and fraud to name a few. It is integral to the
success of an organization that ethics issues such as these be
properly addressed and resolved.
The ethical issues associated with honesty are widespread and
vary greatly in business, from the misuse of company time or
resources to lying with malicious intent, engaging in bribery, or
creating conflicts of interest within an organization. Some
cultures and belief systems even consider honesty to be an
essential pillar of life, such as Confucianism and Buddhism
(referred to as sacca, part of the Four Noble Truths). Many
employees lie in order to reach goals, avoid assignments or
negative issues; however, sacrificing honesty in order to gain
status or reap rewards poses potential problems for the overall
ethical culture organization, and jeopardizes organizational
goals in the long run. Using company time or resources for
personal use is also, commonly viewed as unethical because it
boils down to stealing from the company. Bribery, on the other
hand, is not only considered unethical is business practices, but
it is also illegal. In accordance with this, the Foreign Corrupt
Practices Act was established in 1977 to deter international
businesses from giving or receiving unwarranted payments and
gifts that were intended to influence the decisions of executives
and political officials.
INFLUENTIAL FACTORS
Many aspects of the work environment influence an individual's
decision-making regarding ethics in the business world. When
an individual is on the path of growing a company, many outside
influences can pressure them to perform a certain way. The core
of the person's performance in the workplace is rooted by their
personal code of behavior. A person's personal code of ethics
encompasses many different qualities such as integrity, honesty,
communication, respect, compassion, and common goals. In
addition, the ethical standards set forth by a person's superior(s)
often translate into their own code of ethics. The company's
policy is the 'umbrella' of ethics that play a major role in the
personal development and decision-making processes that
people make in respects to ethical behavior.
The ethics of a company and its' individuals are heavily
influenced by the state of their country. If a country is heavily
plagued with poverty, large corporations continuously grow, but
smaller companies begin to wither and are then forced to adapt
and scavenge for any method of survival. As a result, the
leadership of the company is often tempted to participate in
unethical methods to obtain new business opportunities.
Additionally, Social Media is arguably the most influential
factor in ethics. The immediate access to so much information
and the opinions of millions highly influence people's behaviors.
The desire to conform with what is portrayed as the norm often
manipulates our idea of what is morally and ethically sound.
Popular trends on social media and the instant gratification that
is received from participating in such quickly distort people's
ideas and decisions.
STATISTICS FROM THE NATIONAL

BUSINESS ETHICS SURVEY
The National Business Ethics Survey comes out every two

years. In the 2013 edition, respondents saw an all-time low in
unethical behavior. Around 41 percent of employees saw
misconduct on the job, compared to 45 percent in 2011. The
survey concluded that possibly an uncertain economic climate
led to less risk-taking in for-profit businesses leading more
managers and executives to act more ethically. The survey found
that 60 percent of misconduct on the job occurred among
managers, and 24 percent of employees blamed senior-level
managers for unethical behavior.
EXAMPLE OF UNETHICAL BUSINESS
PRACTICE
Satyam Computers, a global IT company, was defamed in a
notorious list of companies involved in fraudulent financial
activities. The list includes names such as Enron, WorldCom,
Allied Irish, Bearings and Kidder Peabody.
Sat yam’s CEO accepted his role in a broad accounting
impropriety that had overstated company’s net revenue and
profit. The company had reported a cash reserve of approx
$1.04 billion that existed only in books but not in reality.
In his letter to his board, exposing the fraud, Sat yam’s CEO
showed the propensity of the fraud. He stated that, “What
started as a marginal gap between actual operating profits and
ones reflected in the books of accounts continued to grow over
the years. It has attained unmanageable proportions. …” Later,
he described the process as “like riding a tiger, not knowing
how to get off without being eaten.”
RAGHAV GUPTA
18104075

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BUSINESS ETHICS

Business ethics is a form of applied ethics or professional

2. Human Resource Management

3. Sales and Marketing

STATISTICS FROM THE NATIONAL

The National Business Ethics Survey comes out every two

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