Business ethics refers to moral principles and beliefs regarding what is right or wrong. Ethics provide the guidelines regarding what is considered appropriate behavior and what is not. Businesses often find themselves in ethical dilemmas. This is primarily because there is no way in which an absolute or indisputable code of ethics can be created. Hence, a grey zone often exists in business ethics. In addition, the challenge is much more complicated for cross-border organizations because different countries and cultures have different ethical standards. In this article, we will review the various business ethics sources and their implications.
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Sources of Business Ethics
There are various sources of business ethics. As mentioned earlier, ethics is seldom indisputable. Therefore, a single business ethics source is not sufficient for developing the ethical code for an organization. Various business ethics sources are as follows:
Societal Ethics
Imagine you are a vegetable vendor. You set up your shop in the local market and every day hundreds of people come to purchase vegetables from you. You have a hand scale to measure the weights of vegetables. Instead of being very careful about the accuracy of weights, you often tilt the scale in such a way that you give the customer lesser than the said weight. In many cultures, cheating is inappropriate. Customers would boycott your store. However, if you live in a developing or under-developed country, you may get away with such behavior because the customers are not as conscious of their rights as they should be.
Just as cheating customers regarding the weight of the vegetables purchased, there are many behaviors that are perceived differently in different societies across the world. For instance, many countries have very serious laws against bribery. However, in many countries, it is a social evil.
Societal ethics are the sources of business ethics that are inspired by the values of the society where the business operates. People who follow such norms are automatically followed because they internalize them as their very own code of values and beliefs. Often there is no written record of such ethics.
At times, these societal ethics are codified into law. As a result, it becomes compulsory for all the members of society to follow them.
Professional Ethics
These refer to the moral rules and values that individuals belonging to a profession must abide by. A very good example of professional ethics is that of doctors and nurses. Doctors take an oath to serve patients sincerely, not perform unnecessary medical procedures, not over-charge patients, and so on. These ethics exist because professionals often exploit others due to their expert knowledge. Ethics protect the other party from exploitation. However, in many cases, people do not follow such ethics. Deprivation of medical treatment and death due to negligence is common.
Another example is that of psychologists or therapists. Psychologists have the ethics to be empathetic and compassionate towards their clients. They must also not disclose the identity of their clients or the information that the client revealed. Therapists too must act in the best interest of clients and not exploit them under any circumstance. Professional and societal ethics often interact with one another. For instance, in the USA, there are very strict laws regarding the ethics of therapists. However, the same is not true in many other countries.
Individual Ethics
These are personal or individual moral standards and beliefs that guide personal interactions with others around them. Personal ethics encourage or discourage certain types of behavior. Since these are personal in nature, there are huge individual differences. For instance, while it is fine for some people to come late, others may find it unacceptable. Hence, a lot of personal conflicts could arise due to a clash of opinions.
In case personal ethics conflict with the laws of the land, the person may be subject to legal persecution. Personal ethics are formed by early life socialization. For instance, schooling and parenting style impact personal ethics. In addition, societal ethics also shape individual ethics.
The personal ethics of the top management team also influence business ethics. Many researchers argue that the values and beliefs of the founders have a profound impact on business ethics.
What are your thoughts on business ethics sources? Let us know which source of business ethics has shaped the ethical code of your organization.