What is Business Ethics?
Business ethics is about business activites and decisions that could be evaluated as morally right or wrong
Business ethics is said to start when the law ends - the grey area where there is no certain legal consensus about what is right or wrong
Ethical decisions may vary due to diverse legal environment across geographies and time
Why is Business Ethics important?
To do business with a high moral standard
Stakeholders hold companies accountable for ethical behaviour
Societal and media pressures deman ethical behaviour
Steps in Ethical Decision Making
Recognizing a moral issue
Decisions involve a moral element that could be hard to recognize
Morality describes norms, values, and beliefs that define right or wrong for a specific individual or group in a certain situation
If the decision is not recognized as a moral one, only non-ethical criteria may be considered
Making a moral judgement
Everyday common sense and prevailing practice from the basis of ethical decisions
Ethical principles and guidelines can provide further guidance
Ideally, decisions should be aligned to the norms of society
Establishing intent and decide what to do
The outcome of the moral judgement may not match with the intended action, as the individual may fail to establish a moral intent
The individual decides what to do, but it is independent of any further decision to act
Acting according to those intentions
The individual may act on the moral intent by engaging in moral behaviour or not
Thus, there is a distinction between knowing what is the right thing to do and doing something about it
Good intentions are not enough as individualy also have to act on those intentions
This last phase is critical as it is shows if moral behaviour is practiced or not
Management Activites to Create an Ethical Environment
Business Ethics Management is the attempt to manage ethical issues through policies, practices and programs
How to establish an ethical environment
Develop a Code of Ethics and a protocol to follow if the code is violated
Establish formal communication channel
Propose formal training
Implement and ethics committee
Ethics extent internal operations and are also relevant in external operations, e.g., marketing, sourcing etc.
How do Business Ethics and Sustainability relate?
Business ethics is about normative decisions and evaluating what is morally right and wrong whereas sustainability is about creating shared economic value in a way that does not harm the natural environment, while at the same time contributing to societal well-being
When making sustainability-related decisions, ethical and moral issues will arise, that have to be taken into account
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