The word ethics comes from the Greek word ethos, which means character.

The business ethics is a code, where everyone conforms to a norm, which varies from business to business. In other words, ethics is a conception of right and wrong in relation to human behaviour. Ethics can be defined as the planned attempt to follow societys accepted norms, standards, and expectations that ought to govern human conduct and the values worth pursuing in life. Thus, the attempt is systematic and hence goes beyond what each reflective person tends to do in his daily life in making sense of his moral experience, organising it, and attempting to make it coherent and unified. Ethics accepted principles of right or wrong that govern the conduct of a person, the behavior of members of a profession, or the actions of an organization. Business Ethics accepted principles of right or wrong governing the conduct of businesspeople. Business Ethics the standards of conduct and moral values governing actions and decisions in the work environment. Foundations of Business Ethics Business ethics first appeared in the 16th century. The Protestant Revolution paved the way for business ethics by making financial success moral.
Foundation Principles of Business Ethics 1. Exercise due care. 2. Confidentiality. 3. Fidelity to special responsibilities. 4. Avoidance of the appearance of a conflict of interest. 5. Willing compliance with the law. 6. Acting in good faith in negotiations. 7. Respect for human well-being. 8. Respect for the liberty and constitutional rights of others. Let's examine each of the principles individually. 1. Exercise Due Care. All professionals are held to a special standard of competency and care in their work. Business managers should aspire to a similarly high standard of care. This obligation exists in regard to all work

whether it be as an employee of a corporation or as a sole practitioner who provides services to customers. Firms must exercise due care in foreseeing and resolving potential problems. Failing to foresee consequences which prudent circumspection would have revealed represents professional negligence. Examples: Managers have a responsibility to oversee the actions of subordinates. Firms have a responsibility to test products adequately. Firms must assess and justify negative environmental consequences of products and production processes. 2. Confidentiality. Many business relationships require the exchange of confidential information. Managers have a responsibility to restrict uses of that information to the business situation. They should not use that information for purposes other than those expected or approved by the discloser. Managers have further responsibility to safeguard confidential information so that access is restricted to those who have a need to know. Examples: A firm involved in merger negotiations has a responsibility to safeguard information provided by a prospective merger partner. Employees should not use inside information to trade shares of the partner, and confidential information about the partner should not be disclosed to the public. Managers have a responsibility to keep employee performance evaluations confidential and to disclose them only to others in the firm who have a legitimate need to know. Management and union negotiators who have agreed to keep negotiations confidential until a tentative agreement is reached have a responsibility not to leak information to the press. 3. Fidelity to Special Responsibilities. Fidelity is a principle of devotion to duty. Duties may arise from law, contract, or implicit business relationship. Managers having special duties must give first priority to those duties. Examples: Trustees have special responsibilities to clients, as do agents and stockbrokers. Managers have special responsibilities to shareholders, employees, and all stakeholders. Employees have special responsibilities to their employer. 4. Avoidance of the Appearance of a Conflict of Interest.

Business people should not place themselves in positions where they have personal incentives to take actions which could be harmful to their firms or clients-whether those incentives result from external business affairs, family relationships, friendships, or even internal firm politics. Full disclosure may in some cases resolve conflicts between competing interests. Disclo sure alone may not be adequate where those who may be harmed are unable to take action to resolve their concerns. In such instances, withdrawal from the decision-making process or reference to independent authorities may be required. A personal judgment that objectivity can be maintained, even when made with great sincerity, is inadequate by itself. The standard requires avoidance of an appearance of a conflict of interest. Examples: Financial interest in client and supplier firms should be fully disclosed and resolved. Personnel officers of public companies should refrain from hiring family members or should defer decisions to others who have no personal involvement. Special incentives or unusual compensation deriving from recommendations made to clients should be disclosed. 5. Willing Compliance with the Law. Managers should willingly comply with the law. Further, they should comply with the spirit of the law and avoid attempts to circumvent the intent of legal restrictions. Managers should not readily accept weak justifications for breaking the law, e.g., "Everybody does it," or "The law is not good policy." 6. Acting in Good Faith in Negotiations. Good faith may be defined as acting fairly within the context of a transaction. An individual must be appropriately forthright and make factual statements honestly. Managers acting in good faith will conform to conventions of the industry when representing products to peers and will refrain from using industry conventions to victimize the naive. Firms should not misrepresent their products in advertising or personal selling, nor should they knowingly promise to deliver products or to make payments unless they expect to be able to do so. 7. Respect for Human Well-Being. Managers must respect the physical and emotional well-being of employees, clients, customers, and other stakeholders. Managers must give the highest priority to safety and must fully disclose known risks, both to product users and to employees in the workplace. Further, employees, clients, and suppliers should not be sexually or emotionally harassed. 8. Respect for the Liberty and Constitutional Rights of Others. Workplace restrictions on basic rights, including those pertaining to speech, religion, freedom from invidious discrimination, and access to government, may significantly compromise employees' abilities to experience the full value of those rights. Managers should give extreme priority to preserving liberties and constitutional rights, even where specific legal sanctions do not exist.

Four Key Elements of a Solid Ethics Foundation 1. Strong code of ethics - Something in writing about what one ought to do, and what to strive for. This also serves to inform employees of the vision that the companys executives have for the companys image and goals. This helps new employees learn important aspects of how to carry out their actions at work., and provides veteran employees with something to fall back on; both as a reminder and as something to cite if they are being pressed to do something that they believe to be wrong. 2. Ethics Training - This is where the ethics code is integrated into the workplace. This kind of training is meant to inform someone what not to do if they want to stay out of trouble. 3. Ethics Coach - either in-house or out-sourced, who will be available as a friendly and confidential resource for employees facing complicated ethical dilemmas. 4. Anonymous reporting tip-line - This serves to provide employees with a means for reporting observed misconduct or violations without fear of reprisal. The Effort to Become More Ethical If management follow good business ethics, there would be no need for government intervention. Business and industry are first and foremost a public service. We are organised to do as much good as we can everywhere for everybody concerned. I do not believe we should make such an awful profit on our cars. A reasonable profit is right, but not too much. It has been my policy to force the price of a car down as fast as production would permit and give the benefit to the users. The result has been surprisingly enormous profits to ourselves. Henry Ford Ethical behavior builds trust, trust builds confidence, and confidence builds profitable business relationships with customers, suppliers, investors, employees, creditors, and the general public. To make sure that a business behaves in an ethical manner, a number of firms now have ethics officers. These are individuals who are responsible for making sure that all employees are trained to be ethically aware, that ethical considerations enter the business-decision making process, and that the companys code of ethics is adhered to. Ethics officers may also be responsible for auditing decisions to make sure that they are consistent with this code.

Business and investors Stockholders have the right to timely and accurate information about their investment (in accounting statements). Obligation to make profits for shareholders. Expectation of ethical and moral behavior. Investors protected by regulation by the Securities and Exchange Commission and state regulations.

Business and consumers Customers have the right to be fully informed about the products and services they purchase, including the right to information about how those products might cause harm to them or others. The Right to Be Safe. Safe operation of products, avoiding product liability. The Right to Be Informed. Avoiding false or misleading advertising and providing effective customer service. The Right to Choose. Ability of consumers to choose the products and services they want. The Right to Be Heard. Ability of consumers to express legitimate complaints to the appropriate parties.

Business and workers Employees have the right to safe working conditions, fair compensation for the work they perform, and to be treated in a just manner by managers. Workplace Safety. Monitored by Occupational Safety and Health Administration. Quality-of-Life Issues. Balancing work and family through flexible work schedules, subsidized child care, and regulation such as the Family and Medical Leave Act of 1993. Ensuring Equal Opportunity on the Job. Providing equal opportunities to all employees without discrimination; many aspects regulated by law. Age Discrimination. Age Discrimination in Employment Act of 1968 protects workers age 40 or older. Sexual Harassment and Sexism. Avoiding unwelcome actions of a sexual nature; equal pay for equal work without regard to gender.

Corporate Social Responsibility the idea that business has social obligations above and beyond making a profit. Corporate Social Responsibility obligation toward society assumed by business. Corporate Social Responsibility - is a form of corporate self-regulation integrated into a business model. CSR policy functions as a built-in, self-regulating mechanism whereby business monitors and ensures its active compliance with the spirit of the law, ethical standards, and international norms. Social Responsibility refers to managements consideration of the social as well as economic effects of its decisions. Businesses must be responsible in their dealings with employees, consumers, suppliers, competitors, government, and the general public. Economic Responsibility are to produce goods and services that perpetuates the business and satisfies its obligations to investors. Legal Responsibilities to obey local, state, federal, and relevant international laws. Voluntary Responsibilities are additional behaviors and activities that society finds desirable and that the values of business support. Ex. Donating to charitable institutions, supporting community projects Philosophical bases of social responsibility Corporate social responsibility is based upon modern philosophical systems characterised by individualism and the dichotomy between egoism and altruism. CSR is based on the modern-European philosophical systems that rejected the legacy of medieval philosophy. Although CSR borrows from a wide variety of modern philosophers, it relies especially on the social contract tradition, which has roots in ancient thinkers, such as Protagoras, Xenophon, and Epicurus, and was developed more fully by modern-European philosophers, both British (e.g. Thomas Hobbes, John Locke, David Hume) and Continental (e.g. Baruch Spinoza, Jean-Jacques Rousseau, Immanuel Kant). According to Friedman, only people can have responsibilities; because a corporation is an artificial person, it can have, at most, artificial responsibilities. The CSR movement is rooted in modern-Western philosophy.

The contract between business and society has evolved from the traditional view (Friedmans minimalist view) that economic growth was the source of all progress, social and economic to one holding forth an organizational imperative to work for social as well as economic improvement (the stakeholder view). This latter, expanded meaning of corporate social responsibility included an implicit, informal social contract between the corporation and its employees.

Corporate Social Responsibility or CSR has been defined by Lord Holme and Richard Watts in The World Business Council for Sustainable Developments publication Making Good Business Sense as the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as the local community and society at large". Social responsibility is an ethical ideology or theory that an entity, be it an organization or individual, has an obligation to act to benefit society at large. Social responsibility is a duty every individual or organization has to perform so as to maintain a balance between the economy and the ecosystem.

Business and Environment Protecting the environment companies must use resources efficiently, minimizing pollution Public Health Issues - What to do about inherently dangerous products such as alcohol, tobacco, vaccines, and steroids. Developing the Quality of the Workforce. Enhancing quality of the overall workforce through education and diversity initiatives. Corporate Philanthropy. Cash contributions, donations of equipment and products, and supporting the volunteer efforts of company employees.

Dichotomy a division or the process of dividing into two especially mutually exclusive or contradictory groups Egoism a doctrine holding self-interest to be the motive or the valid end of action. - Excessive concern for oneself with or without exaggerated feelings of selfimportance. Altruism - unselfish interest in the welfare of others.

Archie B. Carroll - Business ethics scholar [PYRAMID] [EXPLANATION] [csr pyramid]