General ethics, moral values and business ethics build a strong foundation for business organizations to work towards the betterment of their employees and for society in general. Moral values are part of every religion and society. Therefore, the code of ethics is rooted deep in every society’s religious and cultural norms. That forms the basis of business code of ethics too.
Business ethics denote how ethical principles guide a business's operations. Maintaining an ethical status is the responsibility of the manager of the business.
In 1990, an article was published by the Journal of Business Ethics that defined the concept of business ethics as ‘Managing ethical behavior is one of the most pervasive and complex problems facing business organizations today.’
It is very important to understand the importance of basic code of business ethics in any organization or business. Everyone should respect each other. No vulgar remarks should be passed on to employee or to employer of any organization. No one should do leg-pulling of their sub-ordinates or managers but every employee should work towards the excellence of organization. To maintain positive working environment for any organization, code of business ethics lay a clear road-map for managers and employees to follow.
Maintaining ethical behavior is complex
It means that maintaining the ethical behavior within an organization is complex and a challenging task. Many business organizations are facing the dilemma of ethical behavior with reference to their employees. Many governmental organizations are facing this issues on micro as well as macro levels.
Business ethics is a form of applied ethics
Business ethics also known as corporate ethics is a form of applied or implemented ethics or professional ethics, that scrutinize ethical principles and moral or ethical problems that can arise in a business environment.
It applies to all aspects of business conduct and behavior which is relevant to the conduct of individuals and of whole organizations. These ethics originate from individuals, organizational statements or from the legal system. These norms, values, ethical, and unethical practices are the principles that guide a business. They help those businesses maintain a better connection with their stakeholders.
Both businesses and trade organizations characteristically have some kind of code of business ethics that their employees or members are supposed to follow. Employees not adhering to code of business ethics can lose their job or get fired from the organization.
Why code of business ethics is important in business environment?
A code of business ethics is important because it visibly lays out the rules for behavior and provides the groundwork for a preventive warning for employees to follow.
Business leadership is largely responsible for developing the manifesto of code of ethics. Irrespective of size of an organization, big or small, or any kind of business mainly rely or count on their management staff to set a standardized system of ethical conduct for other employees to follow. When administrators adhere to the code of business ethics, it sends a message that universal agreement is expected of every employee.
Common or everyday issues and problems that fall under the umbrella of business ethics include employer to employee relations, discrimination based on gender, environmental issues, bribery and insider trading, harassment as well as social responsibility. There are many laws present to set basic and primary ethical standards within the business community but the implementation of code of ethics is largely dependent upon a business's leadership to develop a code of ethics.
Business ethics refer to contemporary organizational standards, principles, sets of values and norms that govern the actions and behavior of an individual in the business organization.
Business ethics have two dimensions, normative business ethics or descriptive business ethics. As a corporate practice and a career specialization, the field is primarily normative. Academics attempting to understand business behavior employ descriptive methods. The range and quantity of business ethical issues reflects the interaction of profit-maximizing behavior with non-economic concerns.
Interest in business ethics augmented vividly during the 1980s and 1990s within big and major corporations as well as in academics also. For instance, the emergence of social welfare concept and non-economic commitments towards society and employees of the corporations as well as many initiatives under the category of social responsibility charters have been made. Many developed countries and their business sectors have adhered to the code of business ethics which have made them successful.