Notes of Business Ethics &

Corporate Social Responsibility

Compiled by: Zameer Ul Hassan

Course Instructor
 Introduction to Ethics
Business ethics is applied ethics. It is the application of our understanding of what is good and
right to that assortment of institutions, technologies, transactions, activities, and pursuits that we
call business. Discussion of business ethics must begin by providing a framework of basic
principles for understanding what is meant by the terms good and right; only then can one
proceed to profitably discuss the implications these have for our business world.

Definition
Laura Nash has defined business ethics as “the study of how personal moral norms apply to the
activities and goals of commercial enterprise,” as dealing with three basic areas of managerial
decision making:
 Choices about what the laws should be and whether to follow them
 Choices about economic and social issues outside the domain of law
 Choices about the priority of self-interest over the company’s interests

The word “ethics” is derived from the Greek word ethos “character” or “way of living”, ethics is a
branch of philosophy that is concerned with human conduct. It consists in a code of conduct of
human beings living in a society. Business ethics (corporate ethics) is the study of business
situations activities and decisions where issues of right and wrong are addressed. Business ethics
are moral principles that guide the way a business behaves.
The same principles that determine an individual’s actions also apply to business.
David Mackenzie defines ethics as “the study of what is right or good in human conduct” or the
“science of the ideal involved in human life”. So, it is clear that ethics is the study which
determines rightness or wrongness of actions.
Acting in an ethical way involves distinguishing between “right” and “wrong” and then making the
“right” choice. It is relatively easy to identify unethical business practices. For example, companies
should not use Child Labor, should not unlawfully use copyrighted materials and processes and
should not engage in bribery.
The following list of principles values that most people associate with ethical behavior.

1. Honesty: Ethical executives are honest and truthful in all their dealings and they do not
deliberately mislead or deceive others by misrepresentations, overstatements, partial truths,
selective omissions, or any other means.
2. Integrity: Ethical executives demonstrate personal integrity and the courage of their convictions
by doing what they think is right even when there is great pressure to do otherwise; they are
principled, honorable and upright; they will fight for their beliefs.
3. Promise-Keeping & Trustworthiness: Ethical executives are worthy of trust. They are candid
and forthcoming in supplying relevant information and correcting misapprehensions of fact, and
they make every reasonable effort to fulfill the letter and spirit of their promises and commitments.
4. Loyalty: Ethical executives are worthy of trust, demonstrate fidelity and loyalty to persons and
institutions by friendship in adversity, support and devotion to duty. They are loyal to their
companies and colleagues and if they decide to accept other employment, and refuse to engage
in any activities that take undue advantage of their previous positions.
5. Fairness: Ethical executives and fair and just in all dealings; they do not exercise power
arbitrarily, and do not use overreaching nor indecent means to gain or maintain any advantage
nor take undue advantage of another’s mistakes or difficulties.
6. Concern for Other: Ethical executives are caring, compassionate, benevolent and kind; they like
the Golden Rule, help that in need, and seek to accomplish their business objectives in a manner
that causes the least harm and the greatest positive good.
7. Respect for Others: Ethical executives demonstrate respect for the human dignity, autonomy,
privacy, rights, and interests of all those who have a stake in their decisions; they are courteous
and treat all people with equal respect and dignity regardless of gender, race or national origin.
8. Law Abiding: Ethical executives abide by laws, rules and regulations relating to their business
activities.
9. Commitment to Excellence: Ethical executives pursue excellence in performing their duties, are
well informed and prepared, and constantly endeavor to increase their proficiency in all areas of
responsibility.
10. Leadership: Ethical executives are conscious of the responsibilities and opportunities of their
position of leadership and seek to be positive ethical role models by their own conduct and by
helping to create an environment in which principled reasoning and ethical decision making are
highly prized.
11. Reputation and Morale: Ethical executives seek to protect and build the company’s good
reputation and the morale of its employees by engaging in no conduct that might undermine
respect and by taking whatever actions are necessary to correct or prevent inappropriate conduct
of others.
12. Accountability: Ethical executives acknowledge and accept personal accountability for the
ethical quality of their decisions and omissions to themselves, their colleagues, their companies,
and their communities.

Ethics Levels
Because ethical problems are not only an individual or personal matter, it is helpful to see the
different levels at which issues originate and how they move to other levels.
 Five levels are:
 Individual
 Organizational
 Association
 Societal
 International

Characteristics of Business Ethics

A Discipline:
Business ethics are the guiding principles of business function. It is the knowledge through which
human behaviour is learnt in a business situation.
Ancient Concept:
Business ethics is an ancient concept. It has it origin with the development of human civilization.
Personal Dignity:
The principles of ethics develop the personal dignity. Many of the problems of ethics arise due to
not giving dignity to individual. All the business decisions should be aimed by giving dignity to the
customers, employees, distributors, shareholders and creditors, etc. otherwise they develop in
immorality in the business conducts.
Related to Human Aspect:
Business ethics studies those activities, decisions and behaviours which are concerned with
human aspect. It is the function of the business ethics to notify those decisions to customers,
owners of business, government, society, competitors and others on good or bad, proper or
improper conduct of business.
Study of Goals and Means:
Business ethics is the study of goals and means for the rational selection of sacred objects and
their fulfillment. It accepts the principles of “Pure goals inspire for pure means” and “Means
justifies the end”. It is essential that goals and means should be based on morals.
Different from Social Responsibility:
Social responsibility mainly relates to the policies and functions of an enterprise, whereas
business ethics to the conduct and behaviour of businessmen. But it is a fact that social
responsibility of business and its policies is influenced by the business ethics.
Greater than Law:
Although the law approves various social decisions, but the law is not greater than ethics. Law is
usually related to the minimum control of social customs whereas ethics gives importance to
individual and social welfare actions.

Defines Code of Conduct

Business ethics defines the code of conduct for every business. It clearly defines the activities that
business should adopt in its code of conduct. Ethics states what is right or what is wrong for a
business and what a business should do or what it should not do for its growth and welfare of
society. It provides basic framework for doing a business. Ethics defines social, cultural,
economic, legal and other limits of business and they should operate within these limits.

Protects Social Group

Business ethics provide protection to different social groups associated with business.
Implementation of ethics in business ensures that it does not operate only for its growth but should
also consider the welfare of social group. Needs and rights of customers, employees, government,
shareholders, creditors, small businessmen etc. are given equal importance along with their own
goals by business. Business adopting and following ethics therefore gives protection to all social
groups.

Control Business Malpractices

Business ethics monitors and keeps a check on any malpractices in business. It ensures business
performs all activities ethically without getting involved in any unfair trade practices. Business
ethics avoids adoption of unfair trade activities like adulteration, black marketing, frauds and
cheating in product, improper weights and measures etc. Controlling of all these malpractices by
ethics helps in maintaining the legality of business.

Related To Moral and Social Values

Ethics in business are based on moral principles and social values. These ethics states that
business should operate morally without exploiting others. Business should not only focus on its
profitability or growth but also work for the betterment of its stakeholders. Ethics in business
includes self-control, providing service to society, consumer welfare and protection, treating social
groups fairly, not exploiting others, etc.

Requires Willingness to Accept

Implementation of business ethics requires the willingness to accept by businessmen. This is the
basic requirement for successful adoption of ethics by any business. Ethics are voluntary in nature
and are not enforceable by any law. These ethics must be adopted like self-discipline by
businessmen at their own choice.

Creates Good Image

Business ethics has an important role in improving the goodwill of the business. Ethics defines
rules and regulation that it need to adopt in its operations. It ensures that business maintain
certain standards in their code of conduct. They should use better technology and resources for
their production processes. Providing quality products at fair prices helps in serving and satisfying
customers in a better way. This enhances the overall goodwill of business organization in the
market.

Relative Term
Business ethics is a relative term and it changes from business to business. Business ethics are
not the same for every organization. It changes from organization to organization and from country
to country. Business ethic that may be good or moral in one country may be treated as taboo in
other countries.

Requires Education and Guidance

For proper adoption of business ethics, it is required to educate and guide businessmen about
them. Before introducing ethics businessmen should be properly taught about the benefits of
these ethics. They should be motivated to implement these ethics by explaining their
advantages. Trade Associations and Chambers of Commerce should take an active role in
educating businessmen

Features of Business Ethics

Maintains Legality of Business
Business ethics ensure that business does not involve in any illegal activities. Ethics in business
clearly defines the rules and principles that business needs to adopt in its code of conduct. These
ethics avoid the adoption of unfair trade activities like adulteration, black marketing, frauds and
cheating in the product, improper weights and measures etc. This all helps in maintaining the
legality of the business.

Reduce Risk and Cost

Ethics in business helps in improving the productivity and overall efficiency of the organization.
These ethics bring self-discipline within the organization and aims at reducing the risk and
expenses. All the people working in an organization are strictly required to follow these ethics and
are imposed to a penalty in case of any failure. Employees are required to strictly required to
focus on their defined roles for achieving higher efficiency.

Providing Quality Products

Quality products are a must for keeping the customers happy and satisfied. Ethics in business
defines certain standards for the production of better products for customers. Businesses are
required to use better technology and resources for manufacturing their products. They should not
comprise with product quality and should meet the standards level set by these ethics.

Healthy Competition
Unhealthy competition in the market makes the condition worse for the existence of the small
business. Every business should adopt fair market practices for healthy competition in the market.
They should cooperate with their business partners and other business organization existing in the
market. Ethics in business focuses on that any business organization does not aim at creating its
monopoly in the market by exploiting other ones existing in the market.

Profit Making
Business ethics are not against the profit earning objective of business. The aims that business
should not earn profit by unfair means. Businessmen should remain honest and not cheat its
customers, investors and employees. Involvement in any fraudulent activities for raising profit
should be avoided.

Good Employer-Employee Relations

Implementation of ethics in business makes the employer and employee relations better. These
ethics ensure that business should not operate for its own growth only but also work for the
welfare of its employees. All employees should be provided better and timely wages and salaries,
proper working conditions and various other amenities. It helps in developing better relations and
understanding among employer and employees.
Long Term Growth
Ethics in business focuses on the survival of business organizations for long term. Business
cannot exist for long term if any of its operations leads to exploitation of its stakeholders. These
ethics ensure that business works for the welfare of all its stakeholders and tries to achieve their
support. With the support of all its stakeholders business can easily touch the height of great
success and can continue its operations for the long-term.

Scope of Ethics
The scope of ethics includes whatever has reference to free human acts, whether as principle or
cause of action law, conscience, virtue, or as effect or circumstance of action merit, punishment,
etc. Ethics discusses the nature of human freedom. Ethics is essentially related to all other
branches of knowledge like sociology, political science, jurisprudence, law and legal study,
psychology, anthropology, culture study, ecology and environmental study, economics, religion,
aesthetics and other similar areas. Ethics is concerned with political, sociological, cultural,
psychical, economic, environmental, religious problems in pursuit of highest good. So these
problems have an additional place in the scope of ethics. With the emergence of new technology
there is scope for widening the scope of ethics to address new issues.

Ethics in Compliance: Compliance is about obeying and adhering to rules and authority. An ethical
climate in an organization ensures that compliance with law is fueled by a desire to abide by the
laws. Organizations that value high ethics comply with the laws not only in letter but go beyond
what is stipulated or expected of them. Business ethics play an efficient role in the compilation of
business activities with legal rules and regulation. It ensures that business adheres to all
established laws and any of its operations don’t go unlawful. It reduces any chance of facing any
unfavourable action by authorities like payment of fines and penalty. Business following ethics in
their operations frames strategies and policies in accordance with established rules and
regulations. All activities are monitored and ensured that they go in accordance with framed
policies.

Ethics in Finance: Finance is a crucial part of every business and is needed for its successful
operations. Finance should be properly managed by every business otherwise it may have
adverse effects. Ethics aims at controlling and handling all finance issue faced by companies and
employees. The various ethical issues included are accounting related like window dressing and
improper window dressing, insider trading, fake reimbursements, overbilling, bribery, kickbacks
etc. The ethical issues in finance that companies and employees are confronted with include:

In accounting – window dressing, misleading financial analysis.

Related party transactions not at arm’s length
Insider trading, securities fraud leading to manipulation of the financial markets.
Bribery, kickbacks, over billing of expenses, facilitation payments.
Fake reimbursements Executive compensation.

Ethics in Human Resources: Human resource management (HRM) plays a decisive role in
introducing and implementing ethics. Ethics should be a pivotal issue for HR specialists. The
ethics of human resource management (HRM) covers those ethical issues arising around the
employer-employee relationship, such as the rights and duties owed between employer and
employee. Human resources are the key element of every business and have an important role in
its success. Ethics helps in improving the employer-employee relations and overall productivity of
the business. Ethics related to human resource are introduced and implemented by Human
resource management in business. HRM covers all ethical issues related to employer-employee
affecting their relationship.
The various issues covered are Discrimination issues, sexual harassment, employee’s privacy
issues, salaries and wages issues, safety and health issues. Ethics aims at overcoming all these
issues so that employees are happy and motivated towards their roles. The issues of ethics faced
by HRM include:

Discrimination issues i.e. discrimination on the bases of age, gender, race, religion, creed,
disabilities, weight etc.
Any kind of gender harassments actions.
Issues surrounding the representation of employees and the democratization of the workplace,
trade inaction.
Issues affecting the privacy of the employee: workplace surveillance, drug testing.
Issues affecting the privacy of the employer: whistle-blowing.
Issues relating to the fairness of the employment contract and the balance of power between
employer and employee.
Occupational safety and health.
Companies tend to shift economic risks onto the shoulders of their employees. The boom of
performance-related pay systems and flexible employment contracts are indicators of these newly
established forms of shifting risk.

Ethics in Marketing: Marketing is an important part of every business organization. It is the means
through which it improves the sales and profitability of the business. Marketing practices should be
ethical and should avoid the adoption of any unfair means.

Implementation of ethics ensures that all marketing programmes are moral-ethical. The various
ethical issues covered are pricing issues like price discrimination and price skimming, misleading
advertisements, black marketing, anti-competitive practices, wrong advertisement content etc.
Marketing ethics is the area of applied ethics which deals with the moral principles behind the
operation and regulation of marketing. The ethical issues confronted in this area include:
Pricing: price fixing, price discrimination, price skimming.
Anti-competitive practices like manipulation of supply, exclusive dealing arrangements, tying
arrangements etc.
Misleading advertisements
Content of advertisements.
Children and marketing.
Black markets, grey markets.

Ethics of Production: This area of business ethics deals with the duties of a company to ensure
that products and production processes do not cause harm. Some of the more acute dilemmas in
this area arise out of the fact that there is usually a degree of danger in any product or production
process and it is difficult to define a degree of permissibility, or the degree of permissibility may
depend on the changing state of preventative technologies or changing social perceptions of
acceptable risk. Ethics in business helps in monitoring and controlling the overall production
activities. It ensures that production processes do not adversely affect the business. Ethics frames
production policies by considering organization goals, objectives and various environmental
factors.
Attempts are made to minimize the degree of risk and danger. The various ethical issues covered
are defective and dangerous products, environmental ethics and pollution issues, Issues arising
out of new technologies and product testing issues. Implementation of ethics controls these issues
and fosters overall productivity.
 Defective, addictive and inherently dangerous products and
Ethical relations between the company and the environment include pollution, environmental
ethics, and carbon emissions trading.
Ethical problems arising out of new technologies for eg. Genetically modified food
Product testing ethics.
The most systematic approach to fostering ethical behavior is to build corporate cultures that link
ethical standards and business practices.

Why Does It Matter? Importance of Business Ethics

“Doing the right thing” matters to employers, employees, stakeholders, and the public.
For companies, it means saving billions of dollars each year in lawsuits, settlements, and theft
Tobacco industry, Dow Corning
Costs to businesses include:
Deterioration of relationships
Damage to reputation
Declining employee productivity, creativity, and loyalty
Ineffective information flow throughout the organization
Absenteeism

Why Use Ethical Reasoning In Business?

Ethical reasoning is required in business for at least three reasons:
 Many times laws are insufficient and do not cover all aspects or gray areas of a problem
 Free-market and regulated-market mechanisms do not effectively inform owners and
managers about how to respond to complex issues and crises that have far-reaching ethical
consequences
 Complex moral problems require an intuitive or learned understanding and concern for
fairness, justice, and due process to people, groups, and communities

Nature of Business Ethics

Ethics aims at systematic knowledge so ethics is a science. Every science is concerned with a
particular sphere of nature. As a science ethics has its own particular sphere; it deals with certain
judgments that make about human conduct. It deals with systematic explanation of rightness or
wrongness in the light of the highest good or absolute good of man.
  Ethics is applied to Human Beings only as they have freedom of choice and means of free
will.
 Ethics is more a Science than an art, because it is systematic knowledge about moral and
behavior and conduct of human beings.
 Ethics deals with Human Conduct which is voluntary not forced by circumstances or
humans.
 Ethics is normative science. Normative science involves arriving at moral standards that
regulates right and wrong Conduct. It includes behavior, norms, morality, rituals ( ‫ریت یا رسم‬
) and legacy etc.
 Ethics, which is honorable behavior conforming to the norm of the group;
 Culture, which is a pattern of shared beliefs adopted by the group in dealing with its internal
and external affairs. Ethics is essentially related to all other branches of knowledge like
sociology, political science, jurisprudence, law and legal study, psychology, anthropology,
culture study, ecology and environmental study, economics, religion, aesthetics and other
similar areas.

Contains Rules and Principles

Nature of Business Ethics defines the code of conduct for every business. It tells various rules and
principles that every business should implement in its operations. Business is easily able to decide
what is wrong and what is right for its growth and goodwill by adopting these ethics. Business
ethics are applicable and required to be followed by every individual working in the business
organization.

Voluntary
Business ethics are moral principles and social values that are not enforceable by law. These
ethics are required to be adopted by businessmen by their own will. Business ethics brings self-
discipline within the business environment. Businessmen should understand the relative
importance of these ethics and adopt them hassle-free.

Avoids Cheating and Frauds

Ethics in business keeps an eye on every activity of the business. It ensures that no malpractices
take place within the business organization. Rules and principles provided by these ethics focus
on that business does not indulge in any unfair practices like black marketing, adulteration,
misleading advertisement, inaccurate weight measures, misleading advertisement etc. Every
employee working with a business need to respect these ethics, failure of which leads to a
penalty.

Education and Training Required

Proper education and training should be provided to businessmen and people working with
business before ethics implementation. A proper explanation should to be provided to all so that
they are fully aware of the benefit of these ethics. Once they are informed about these ethics
advantages, they will be self-motivated to adopt these. There should be an active role of
commerce chamber and trade associations for in this regard.

Dynamic Concept
Business ethics is a dynamic concept and changes from time to time for the welfare of the
business. Ethics differs from business to business as per the nature and type of business. It also
differs from region to region and country to country. Business ethics are designed in accordance
with culture, traditions and religions of a particular area. Same business ethic may be good for one
region and a taboo for another region.

Social Welfare
Ethics in business provides a framework for the welfare of society and peoples associated with it.
These ethics ensures that business should not exist for its growth only but should also work for
upliftment of its stakeholders. Business should provide fair wages and better working condition to
its employees, fair payment of taxes to the government, transparency of information to
shareholders and taking part in various amenities for society.

New Concept
Business ethics is a new concept. It is not mandated by any law to be followed by every business.
In developed countries, business ethics are followed strictly whereas in poor and developing
countries these are not followed properly.

Morality

It is a complex system of general principles and particular judgments based on cultural, religious,
and philosophical concepts and beliefs. Cultures and or groups regulate and generalize these
concepts, thus regulating behavior. When someone conforms to the codification, you consider this
person to be moral. Yet even though morals can vary from person to person, religion to religion,
and culture to culture, many are universal, as they stem from basic human emotions. We may
think of moralizing as an intellectual exercise, but more frequently it's an attempt to make sense of
our gut instincts.

Moral Versus Non-Moral Standards: Morality may refer to the standards that a person or a group
has about what is right and wrong, or good and evil. Accordingly, moral standards are those
concerned with or relating to human behavior, especially the distinction between good and bad or
right and wrong behavior.

Moral standards involve the rules people have about the kinds of actions they believe are morally
right and wrong, as well as the values they place on the kinds of objects they believe are morally
good and morally bad. Some ethicists equate moral standards with moral values and moral
principles.

Non-moral standards refer to rules that are unrelated to moral or ethical considerations. Either
these standards are not necessarily linked to morality or by nature lack ethical sense. Basic
examples of non-moral standards include rules of etiquette, fashion standards, rules in games,
and various house rules.

How do we distinguish between moral and non-moral or conventional standards?

Before reading any further, look at the two lists of norms below and see if you can tell which is the
list of moral norms and which is the list of non-moral norms:

Group One Group Two

“Do not harm other people,” “Do not eat with your mouth open,”
“Do not lie to other people,” “Do not chew gum in class,”
“Do not steal what belongs to others.” “Do not wear sox that do not match.”

Moral Norms and Non-moral Norms Review

• From the age of three we can distinguish moral from non-moral norms.
• From the age of three we tend to think that moral norms are more serious than non-moral norms
and apply everywhere independent of what authorities say.
• The ability to distinguish moral from non-moral norms is innate and universal

Six Characteristics of Moral Standards

• Involve serious wrongs or significant benefits
• Should be preferred to other values including self-interest
• Not established by authority figures
• Felt to be universal
• Based on impartial considerations
• Associated with special emotions and vocabulary

Religion and Morality

Morality and religion is the relationship between religious views and morals. Many religions have
value frameworks regarding personal behavior meant to guide adherents in determining between
right and wrong. The Triple Gems of Jainism Islam's Sharia, Catholicism's Canon Law,
Buddhism's Eight fold Path, and Zoroastrianism's "good thoughts, good words, and good deeds"
concept, among others.
Religion
Oxford Dictionary defines religion as the belief in and worship of a superhuman controlling power,
especially a personal God or gods. Some Definitions of Religion are following:
"Religion is the belief in Spiritual Beings" (Edward B Tyler,)
"By religion, then, I understand a propitiation or conciliation of powers superior to man which are
believed to direct and control the course of nature and of human life" (James George Frazer).
"Religion is a means of ultimate transformation and/or orientation." (Joseph Adler)
A religious tradition has at least three essential elements, each handed down and developed in
the multitude of ways traditions transmit. One element is a mythic, philosophical, or theological ‫علم‬
‫ ذات‬cosmology defining the fundamental structures and limits of the world and forming the basic
ways in which cultures and individuals imagine how things are and what they mean. A second
essential element of religion is ritual. “Rituals are a finite set of repeatable and symbolize actions
that epitomize ‫ اختصار‬things a tradition takes to be crucial to defining the normative human place in
the cosmos ‫ کائنات‬-‫ ظاہر عالم‬.” The third essential element is that a tradition has some conception
and practical procedures for fundamental transformation aimed to relate persons harmoniously to
the normative cosmological elements, a path of spiritual perfection.

Morality and Personal Values

Values are the rules by which we make decisions about right and wrong, should and shouldn't,
good and bad. They also tell us which are more or less important, which is useful when we have
to trade off meeting one value over another. Morals are judgments, standards and rules of good
conduct in the society. They guide people toward permissible behavior with regard to basic
values. Morals are judgments, standards and rules of good conduct in the society.
They guide people toward permissible behavior with regard to basic values.
Personal Values
Personal values are Code of ethics and belief system of an individual. Here are some criteria that
might help in selecting your personal core values.
Consistent with my personal vision, mission, and core beliefs - In addition to specific
goals/source requirements, can use these criteria as a way to eliminate personal values that are
inconsistent with other decisions.
Inspirational - Personal values encourage fulfilling purpose in life. Great personal values, read
every day, will provide an uplift and motivation to take on the day's challenges.
Unique - Values need to speak don't hesitate to use values learned from others, but core
values should help to define priorities of life and will tend to emphasize strengths while
compensating for weaknesses.
Provides Guidance - Personal core values helps in everyday decisions, particularly with
relationships.
Long Lasting - This is about creating future values will evolve as grow, mature and gain life
experience. However, this is not about following the latest fad.
Meaningful and Rewarding - Values provide the measures that help us live meaningful lives
that fulfill our given purpose. Living a life of meaning brings us joy.

NORMATIVE AND DESCRIPTIVE STUDY

Ethics is not the only way to study morality. The social sciences—such as anthropology,
sociology, and psychology—also study morality. However, they do so in a way that is different
from the approach to morality that ethics takes. While ethics is a normative study of morality, the
social sciences engage in a descriptive study of morality.
A normative study is an investigation that tries to reach normative conclusions—that is,
conclusions about what things are good or bad or about what actions are right or wrong.
A normative study aims to discover what ought to be. As we have seen, ethics is the study of
moral standards whose explicit purpose is to determine as far as possible which standards are
correct or supported by the best reasons, and so it tries to reach conclusions about moral right
and wrong and moral good and evil.
A descriptive study is an investigation that does not try to reach any conclusions about what
things are truly good or bad or right or wrong.
However, a descriptive study tries to describe or explain the world without reaching any
conclusions about whether the world is as it ought to be. For example, anthropologists and
sociologists may study the moral standards that a particular village or culture holds. They may try
to develop accurate descriptions of the moral standards of that culture and perhaps develop a
theory that explains how they came to hold those standards. However, it is not the aim of
anthropologists or sociologists to determine whether these moral standards are correct or
incorrect.
Ethics, in contrast, is a study of moral standards whose explicit purpose is to determine as far as
possible whether a given moral standard (or moral judgment based on that standard) is more or
less correct. The sociologist asks, “Do Americans believe that bribery is wrong?” By contrast, the
ethicist asks, “Is bribery wrong?” The ethicist, then, is concerned with developing reasonable
normative claims and theories. However, an anthropological or sociological study of morality aims
at providing descriptive characterizations of people’s beliefs and theories that can explain those
beliefs.
Business ethics is a specialized study of moral right and wrong that focuses on moral standards in
business institutions, organizations, and activities.
Business ethics is a study of moral standards and how these apply to the social systems and
organizations through which modern societies produce and distribute goods and services, and to
the activities of the people who work within these organizations. Business ethics is a form of
applied ethics. It not only includes the analysis of moral norms and moral values but also tries to
apply the conclusions of this analysis to the institutions, organizations, and activities that we call
business. As this description of business ethics suggests, the issues that business ethics covers
encompass a wide variety of topics. When analyzing the ethical issues raised by a concrete
situation or case, the issues can be sorted in terms of whether they are systemic, corporate, or
individual issues. Failing to sort out the different kinds of issues raised by a concrete situation can
result in a lot of confusion. Moreover, the kinds of solutions appropriate for systemic or corporate
issues are generally not appropriate for dealing with individual issues. If a company is trying to
deal with a systemic issue—such as a government culture that permits bribery—then the issue
must be dealt with on a systemic level. That is, the systemic issue must be dealt with through the
coordinated actions of many different social groups. On the other hand, corporate ethical issues
can be solved only through corporate or company solutions. If a company has a culture that
encourages moral wrongdoing, for example, then changing that culture requires the cooperation of
many corporate personnel. Finally, individual ethical issues need to be solved through individual
decisions and actions, and, perhaps, individual reform. Individual actions, however, will generally
be ineffective when the important issue is a corporate or systemic issue