Before we begin to understand what corporate or business ethics is, let us refresh our memory with the concept of ethics. By this we mean the proper way of performing any act or deed. It includes knowing what is right and wrong, and then doing what is acceptable according to standards and social norms. Ethics is associated with proper code of conduct, proper decorum, or the rules that govern our lives. We also refer to it as values and moral principles.
Every organization must be guided by a set of ground rules that would serve as the basis of harmony in a workplace or in a business. Let us understand the concept of business or corporate ethics and the various issues that exist in terms of carrying out these moral principles.
Understanding Corporate Ethics
Corporate ethics is a type of applied ethics that observes the moral principles and proper business conduct governing the corporate setting as well as examining the ethical problems that exist in a corporate environment. Business ethics relates to all aspects of proper business decorum. It is applicable to the behavior of every working individual and the organization as a whole. Observing business ethics means knowing what is right and what is not, not just to employees in the company but also to relationships with stakeholders as well as to how products and services are being managed and handled.
Every company’s ideal setting is based on corporate values. These values are to be applied to all working individuals regardless of rank and position. Placing significance to corporate ethics prompts the management and staff on performing the desirable work behaviors. More importantly, business ethics ascertains a strong moral compass to management leaders during times of difficulties and crisis.
Corporate Ethics a Management Discipline
With the birth of corporate social responsibility, business ethics has generally become accepted as a management discipline. This means that the importance of learning and observing business ethics encompasses application of the code of ethics, code of conduct, the functions of ethicists, rules and regulations, policies and procedure, processes to resolve ethical issues, training on ethics, and many others.
The existence of corporate ethics is relative to the other aspects of management discipline. For example, public relations was developed out of the need to create a positive image and good reputation to the public. Human resources also exists to better manage the employees in an organization. In the same way, corporate or business ethics was born to keep the harmony and ensure the company dealings are made for the benefit of the common good and avoid wrong practices.
There are various viewpoints where corporate ethics can be examined. These perspectives may be coming from that of a company’s employees, the entire organization, and the society in general. In the process of adhering to corporate ethics, sometimes we cannot prevent issues and problems to arise. We experience ethical dilemmas especially if there are conflicting interests between parties. Some organizations also encounter ethical issues due to multiple and complicated corporate standards and policies.
Ethical problems may arise out of many reasons from various aspects. One of which are issues from the nature of industries and markets. An example is market monopoly where suppliers tend to exploit consumers and take control of the market share. Inequality of income also results to unethical situations like child labor. Internal organization practices also bring forth ethical issues. These could be the way the employees and customers are treated, employment of handicapped people, a company’s loyalty and trust to the workers during difficult economic situations, and the working conditions of the employees.
Ethical issues can involve the society as a whole. Examples of this are the degree of safety embedded into a product, the use of animals in product testing, some agricultural practices, the selling of addictive products such as liquor and tobacco, and any activity that engages the society or the people outside the organization.
Even in marketing there are existing ethical problems. When it comes to pricing, some companies become unclear in product pricing. Brand piracy and counterfeit or fake products are now developed. Misleading advertisements are done to attract customers. Even in conducting market research, unethical practices happen.