For the individual entrepreneur, a reputation for ethical conduct can increase opportunities for business partnerships and reduce the «transaction costs» of managing an ongoing relationship. «The ability to trust the other party and do business with a handshake accelerates the progress we can make,» commented one entrepreneur. A reputation for ethics can make it much easier to attract employees and funding for the current or next company. This is an important shift from the absolutist perspective of many contemporary business ethics, especially the idea that we can only acquire moral brilliance if others do not make comparable sacrifices. Their principle of «mutual trust» allows authors to find a moral justification for deception in certain difficult business situations, while urging business ethicists to help managers «find strategies to bring practice closer to moral ideals.» And in what may well be a manifesto for the new business ethic, Dees and Cramton argue that «the most important work in business ethics» is not «building arguments to please moral idealists, but creating workable strategies for pragmatists.» Perhaps the newest and ever-evolving aspect of ethics is the third element – the idea that companies are embedding business ethics at the heart of their business and making it a standard part of their operational design. As the world becomes increasingly political – and politically correct – the emphasis on proper business ethics and strict adherence to it becomes the norm. In summary, business ethics requires companies to act in a way that stakeholders consider fair and honest. This ethic also guides owners, managers and employees to make morally satisfying decisions and build trust with customers. So, if there is a hint of self-interest, then altruism – and therefore ethical motivation – can no longer be assumed. Ironically, neoclassical economists who believe that all human behavior is inherently selfish share this view.
There is, of course, a key difference underlying this similarity: neoclassical economists argue that self-serving motivation is not immoral; But for many business ethicists, mixed motives do not deserve moral recognition and do not receive it. For example, in Business Ethics: The State of the Art, a recent volume of essays by prominent business ethicists, edited by R. Edward Freeman, the University of Kansas ethicist Richard T. DeGeorge explains, «If, in any case, it turns out that what is ethical leads to the demise of a company,» then «so be it.» A participant at the Business and Society Review symposium echoed this sentiment by arguing that if ethical actions mean reducing a company`s profits, «it must accept such a compromise without remorse.» Managers would find it difficult not to see such recipes as reformulations of the problem and not as workable solutions. Fill out the form on this page to download our online MBA program guide and learn how Redlands University can help you grow as a qualified and ethical leader. Some business ethicists have used a similar type of reasoning to criticize companies that try to create incentives to encourage ethical behavior from their employees. If a leader works in a corporate culture that rewards them for doing good, how can their behavior be considered ethical? In his contribution to Business Ethics: The State of the Art, Daniel Gilbert suggests that when ethical behavior is promoted by «external stimuli,» such as leaders who «set an example of right behavior» or «incite others to induce right behavior,» then behavior is not truly ethical. The strong implication is that a manager can only be really good in a bad company.
Important information passed on to customers, employees or partners of a company must be provided comprehensively. This includes both positive and negative information, terms and conditions or other important information, as it is unethical in business to withhold or conceal relevant facts. The study of how ethics work in companies known as «organizational ethics» has unfortunately focused mainly on large companies. Beginning in the mid-1980s, many large corporations implemented ethics programs staffed by ethics officers. These officers encouraged others to examine how they work and measure the impact of their programs. Fortunately, those who study organizational ethics were just as interested that other companies without formal ethics programs succeeded in making their companies ethical and values-centered. These findings help us examine how start-ups treat ethics. More and more companies are also requiring their employees to attend business conduct seminars, which often discuss company policy, specific case studies, and legal requirements. Some companies even require their employees to sign agreements in which they adhere to the company`s rules of conduct. When a company has a positive reputation, it encourages other companies to negotiate with it. No one wants to negotiate a deal with a company that may not keep its word. If both companies understand the rules of the ethical game, they can negotiate better, harder because they know they are getting what the deal promised them.
Companies with high employee well-being attract top talent. Business ethics lay the foundation for proper employee care. In addition, providing good well-being to employees improves employee productivity and encourages them to stay true to a company`s long-term vision. Many companies evaluate environmental factors that can cause employees to behave unethically. A competitive business environment may require unethical behaviour. Lies have been expected in areas such as trade. An example of this is the problems surrounding the unethical actions of the Solomon brothers.