There are several definitions of business ethics. One of these definitions is “a business’s obligation to act ethically.” This concept involves determining whether a company is meeting ethical requirements. A firm should not deceive consumers by offering lower prices, or lobbying governments to create barriers to entry or tariffs on foreign competitors. Other definitions of business ethics are “ethical” but not illegal. While not illegal, price concessions are unethical and are often considered bribery.
Business ethics can be influenced by ethical theory, which is useful for thinking about the social and economic relations between individuals. Business ethics, on the other hand, is more likely to draw on political theory. For example, business ethicists have sought to determine the implications of Rawls’ notion of justice as fairness for business. Although Rawls himself does not express specific conclusions or arguments, scholars have suggested that justice as fairness is incompatible with significant inequalities in power, and thus with meaningful work.
Another definition of business ethics is the idea that the goals of a business should be in accordance with its stated purpose. Generally, this means that a firm should not act in a way that harms its own interests or those of its customers. However, this idea is not as widespread as it once was, because the term “social” can refer to any activity or process, and “virtue” refers to a virtue.
Product safety is another example of a dilemma in business ethics. Although the concept of a socially beneficial outcome is a key consideration in ethical decision-making, the utilitarian approach is also very subjective. People must define what constitutes “good” in order to decide whether to use a particular product. If the goal is to make a product more efficient, companies should not use that technology. Consequently, this ethical perspective is problematic.
Another definition of business ethics includes how firms should operate in the public interest. Many firms operate with the sole purpose of making money. Others, such as Pfizer and Target, operate with the sole purpose of preserving the wealth of their shareholders. Businesses have an enormous impact on society. They can create jobs, solve social problems, or influence government policies. There is an inherent ethical dimension to all of these types of organizations. If businesses conduct their activities responsibly, they can benefit society in the long run.
A businessperson may find the standards of the country they are working in unacceptable and choose to do business in another country. This decision is known as divestment, and has gained considerable attention during the 1980s. MNCs were considering whether or not to divest from South Africa because of the Apartheid regime. This issue may again become prominent in the coming years as more firms consider divesting from the fossil fuel industry. So, business ethics and sustainability go hand in hand.
Increasingly, businesses are operating internationally. Known as global corporations, they operate in several different countries. These corporations face ethical challenges when dealing with a variety of suppliers from around the world. In introductory ethics courses, students learn that different cultures have different moral codes. This complicates the situation for businesspersons. For example, if a company operates in a “host” country, it must consider whether its standards of labor are comparable to those of the host country.