Business Ethics: Core Principles and Corporate Impact

Understanding Business Ethics

Business ethics refer to the moral foundations that characterize the relationships companies maintain with stakeholders or interest groups. Ethics influences ordinary management and can also lead to modifying a company's strategy.

Impact on Decisions and Strategy

Business ethics affects different areas when making business decisions, especially economic and legal issues (Weiss, 2006). For example, companies involved in scams often see their reputation and share prices plummet due to a loss of confidence.

Consequences of Unethical Behavior

A recent example involves Volkswagen, following the scandal concerning the manipulation of polluting diesel engines. The collapse of companies involved in unethical practices is often provoked by a loss of confidence.

Common Myths About Business Ethics

According to Weiss (2006), several myths or beliefs tend to minimize the importance of ethics in business:

• Ethics as a personal matter: Some believe ethics is based on personal beliefs, not a public issue suitable for business discussion.
• Ethics as relative: Others think business ethics is relative, implying there are no definitive right or wrong ways of acting or thinking.

Implementing Ethical Practices

Defining Standards and Governance

It is necessary to define the moral content of acceptable behavior and implement appropriate mechanisms to encourage ethical conduct among employees. Corporate governance relates to the proper conduct of individuals, making ethical behavior by managers essential.

Challenges and Perceptions

Nevertheless, numerous cases of unethical corporate behavior continue to emerge, even in companies with excellent conduct guides. The negative reputation sometimes associated with business schools stems from a perceived stigma: that capitalism fosters an obsession with profit above ethical principles, prioritizing rapid enrichment and greed.

Josephson's Principles for Ethical Decisions

Ethical values can be seen as standards or rules describing desired behavior. Michael Josephson outlines key principles that managers should consider for ethical decision-making:

• Honesty
• Loyalty
• Fairness
• Concern for others
• Commitment to excellence
• Leadership
• Reputation
• Morale

The Importance of Business Ethics

In conclusion, business ethics is a crucial issue for both companies and society. It impacts various areas of decision-making, and numerous scandals highlight the significant consequences of unethical behavior.