Why does ethics matter in business




















It is also a system in which everyone, managers and nonmanagers alike, must live. As a result, the classic moral analysts of business and government have tended to be grand philosophers like Karl Marx or Friedrich von Hayek. Rather than focusing on professional norms and behavioral modes, such thinkers have advanced systemic critiques that often question the very premises of economic and political systems such as capitalism or socialism. Why do scholars tend toward abstract moral theory?

Because business is not just a profession. It is also a system in which everyone must live. Medicine and law provide an instructive contrast. Because these fields are more traditional professions, their greatest moral analysts have tended to be practitioners like Hippocrates or Oliver Wendell Holmes. Such thinkers accepted and worked within the basic premises and norms of their professions. And that context has allowed them and others to come up with ethical precepts of practical value to actual doctors and lawyers.

Although management increasingly has come to be viewed as a profession in this century, a heritage of systemic moral criticism tempts business ethicists to be grand philosophers.

If so, how? If not, why not? Is socialism ethically…preferable? These are important questions. But to the considerable extent that business ethicists dwell on them, what they generate is more often high-flown social philosophy than ethics advice useful to professionals.

In contrast, because government and law address the normative values of a particular political community, they are more receptive to the language of values found in moral philosophy. Medical ethicists have gained credibility within their more scientific field by displaying an understanding of the relevant hard medical-science issues.

Business ethicists, by contrast, have attempted to gain credibility within their professional field primarily by girding their work with abstract moral theory. To peruse recent issues of the Journal of Business Ethics is to get a strong sense of the kind of research that has resulted from this need to establish theoretical or scholarly bona fides. Ethical theory can help illuminate the moral problems managers face. But no other field of professional ethics has felt the need to couch its analyses so in the language of pure moral philosophy.

Even when business ethicists try to be practical, however, much of what they recommend is not particularly useful to managers. To understand why, a comparison with law is helpful. In business, as in law, ethicists are increasingly asking individual practitioners to modify their commitments to their traditional principals in order to satisfy the competing interests of nonprincipals.

Such questions are less characteristic of either government or clinical medicine. Rarely do we ask our government officials to put the claims of foreign citizens on a par with our own when they come into fundamental conflict.

In one important respect, then, business ethicists and legal ethicists have an especially difficult row to hoe. Many of their current recommendations simply go against the grain of the traditional professional-principal relationship. Few business ethicists have risen to this challenge. There are signs, however, that at least some business ethicists are beginning to grapple with these shortcomings. They are questioning the direction their field has taken and urging their colleagues to move beyond their current preoccupations.

Think of it as the new business ethics. While differing in their specific approaches, advocates of the new business ethics can be identified by their acceptance of two fundamental principles. In the fittingly final essay of Business Ethics, Joanne B. Second, the new perspective reflects an awareness and acceptance of the messy world of mixed motives. Accordingly, the key task for business ethicists is not to make abstract distinctions between altruism and self-interest but to participate with managers in designing new corporate structures, incentive systems, and decision-making processes that are more accommodating of the whole employee, recognizing his or her altruistic and self-interested motivations.

The new business ethics acknowledges and accepts the messy world of mixed motives and moral conflicts. Within this broad area of agreement, practitioners of the new business ethics pursue a variety of interesting and useful approaches.

This is an important departure from the absolutist perspective of much contemporary business ethics, particularly from the notion that only when others are not making comparable sacrifices can we gain moral luster from doing so.

Social contracts are the implicit moral agreements that, having evolved over time, govern actual business practice. The task of the business ethicist, Dunfee writes in Business Ethics Quarterly, is first to identify and make explicit these diverse ethical norms and then to evaluate them against certain universal, but minimalist, moral principles. Some existing social contracts would fail such a test: racial discrimination in real-estate sales, say. But many would not. For example, environmentalists who want companies to produce more environmentally friendly products also must work to convince consumers to pay the added cost often necessary for manufacturing such products.

In other words, business ethics is not a matter of concern for managers alone. Nash develops a set of commonsense approaches to help managers deal with these two types of situations. Moderation, pragmatism, minimalism: these are new words for business ethicists. In each of these new approaches, what is important is not so much the practical analyses offered as the authors acknowledge, much remains to be worked out but the commitment to converse with real managers in a language relevant to the world they inhabit and the problems they face.

According to the U. Department of Commerce, a complete ethics program should touch on all of the business functions. That includes operations, human resources, and marketing, to name a few. The global research company Gartner advises companies to integrate their ethics program with business operations. According to Gartner, an ethics program should:. Corporations have a critical role in developing good ethics in business. But educational institutions also play a fundamental part in shaping ethical leaders.

At the University of Redlands, we understand why business ethics is important. Complex dilemmas like climate change, safety, and security require critical thinking and ethical reasoning.

Through a cutting-edge, interactive curriculum, we prepare students to meet and advocate for the behavioral expectations of an ethical workplace. Our students investigate the ethical, legal, and social factors of decision-making, and cultivate an ethical framework of business decisions in one of four concentration areas.

We underscore ethics throughout our online MBA program, preparing students to promote an exceptional culture of ethics wherever they choose to work. Another reason why business ethics is important is that it can improve profitability. A well-implemented ethics program can also reduce losses. Companies that practice questionable ethics may also experience a decrease in stock price and severed business partnerships, which can affect profitability.

In addition, business ethics is linked to customer loyalty. Business ethics help ensure a good reputation for your company. When you have a reputation for consistently being ethical in how you source and build products, and treat employees, customers and the community, more people will want to do business with you. Even social media ethics is important for your reputation. Good ethics at a business start at the top.

Having strong employee retention rates will help you save money over time on recruitment costs and training. Businesses that practice good business ethics face less risk for fines and other legal trouble.

If business decisions are made with that in mind, you can save the stress of having to defend your company against lawsuits and fines. All these factors above help the company grow, have bigger profits and a strong bottom line.

At Charter College, studying ethics is a key part of our business programs , along with other fundamentals that can help you build a long, successful business career.

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