Business ethics Ethics are concerned with what is

Business ethics

Ethics are concerned with what is ‘right’ or morally correct. Business ethics are concerned with the conduct, principles and patterns of behaviour in business dealings that involve ‘doing the right thing’

Ethical behaviour Examples of ethical behaviour include: Not using child labour Not testing on animals Respecting the human rights of workers Ensuring working hours are not excessive Keeping pollution to a minimum

Sustainability is concerned with adopting production methods so that resources can be used now, but can also be used by future generations. Sustainable practices include recycling, minimising waste and replacing resources where possible e. g. replanting trees used in paper manufacture.

The problem with ethics What is considered to be acceptable for one person may be considered morally wrong for another.

Corporate social responsibility is concerned with the responsibilities firms have to all stakeholders including the local community, wider society and the environment.

Benefits of ethical behaviour Improved reputation and confidence Less chance of unfavourable media coverage Increased ability to attract more customers, workers and investors Increased employee motivation Can be used as a Unique Selling Point in some markets

Motives for ethical behaviour Firms may behave in an ethical manner for two main reasons: To reflect the ethical views and values of the firm and its directions As a public relations exercise to improve the reputation of the organisation

Costs of ethical behaviour Higher labour, operations or material costs The costs of training and ethical auditing Turning away business from firms that are considered to be unethical Changes to the culture of the organisation