Posted on

Concepts of Ethics in Business

The importance of ethical decision making at the workplace have long been understood by practising managers. All the assumptions and discourses about the challenges in the new century have come and gone and now trying to effectively manage the 21st century organisations has become a very harsh reality to confront. That human beings make up a dynamic part of any business is no secret. No organisation could possibly exist without some combination of human beings to set and implement policies and do the work of the organisation with appropriate ethical qualities. Mott (1972) had earlier acknowledged that we are facing new realities, and for that we need a new body of knowledge. Hence the study of ethics as a body of knowledge becomes highly imperative.

The word ethics comes from the Greek word ethos which means ‘custom’, ‘behaviour’, “character” or “habit”. With a rich historical background that dates back to the days of Socrates, ethics had been given little attention but with the ill-reputed Enron case, (where the organisation started out successfully but as a result of inadequate exercise of ethical business procedure and management’s poor decision due to insufficient critical thinking abilities, it failed and went insolvent) and followed by high profile cases in the dailies, ethics has now been given apt attention.

A fundamental principle in ethics is that individuals must make the appropriate decisions without prejudice to self or to the organisation to achieve predetermined objectives. The field of business ethics covers anything from the individual decision made to the overall business work processes. It is a wide field and it covers many areas. In specific terms, business ethics can be defined in the following ways:

1. Ethics as, sometimes known as moral philosophy, is a branch of philosophy that involves systematising, defending and recommending concepts of right and wrong conduct (Internet Encyclopaedia of Philosophy, 2015).

2. Ethics is described as a set of concepts and principles that guide us in determining what behaviour is applicable (Paul and Elder, 2006).

3. Ethics is the study of moral issues and choices (Kinicki and Kreitner, 2009).

4. Stevens (2008) in distinguishing between ethics and morals describes ethics as that which promotes people to do what is right and morals he emphasized refer to what is right and good conduct and character.

From all of the above definitions, business ethics could be regarded as a field of study that investigates the impact of moral issues and choices, be it positively or negatively valued, within the organisation for the sole purpose of applying such knowledge towards improving the sustainability of the organisation. Following from the foregoing statement, ethics is a field of study, means that it is a unique area of expertise with a common body of knowledge that studies major determinants of actions of individuals usually in terms of right and wrong, good and bad.

In addition: ethics as a branch of moral philosophy applies the knowledge gained about appropriateness of behaviour and its effect in order to make ventures work more effectively. To sum up our definition, ethics is concerned with the study of the rightness or wrongness of the action of individuals within the organisation and how this affects the performance of the organisation. To determine the appropriate conduct and policy of any enterprise, a central question of business ethics is “What method and how can any successful venture determine the appropriateness of what is the right or wrong action for any given situation?”

As a broad field of study, many theories and approaches to business ethics exist and these can be assessed by studying views of notable philosophers, by ascertaining critical anxieties of businesses and recommending positive remedies and by critically examining ethical dilemmas and appropriate case studies. Business professionals and ethicists explore the field of business ethics in three common ways:

1. by studying the opinions generated by famous philosophers.

2. by identifying major ethical concerns of businesses and proposing solutions to them through legislation or ethical theory, and

3. by examining case studies that shed light on ethical dilemmas.

Some of the values that have been identified in literature as ethical principles include honesty, trustworthiness, integrity, fairness, keeping promises, fidelity, caring for others, accountability, pursuit of excellence, leadership, responsibility and respect for others (Fennell and Malloy. 2008; Stevens, 2008; Peceri, 2008).

As a broad field of study, ethics can be categorised into;
– Meta ethics,
– Normative ethics, and
– Applied ethics.

– Meta ethics deals with the study of the meaning being ascribed to what is right and wrong.

– Normative ethics describes standards for the rightness or wrongness of an action. It examines the appropriate method for the establishment of an ethical action.

– Applied ethics gives insight into the ethical obligation of the individual and how it is being utilised in practical situations.

What then can entrepreneurs do to create a more ethical culture? Robbins et al (2007) suggest a combination of the following factors:

i. Be a visible role model
ii. Communicate ethical expectations
iii. Provide ethical training
iv. Visibly reward ethical acts and punish unethical ones
v. Provide protective mechanism.