Business ethics is a form of applied ethics that examine ethical rules and principles within a commercial context, the various moral or ethical problems that can arise in business setting, and any special duties or obligation that apply to persons who are engaged in commerce.
Historically, interest in business ethics accelerated dramatically during the 1980’s and 1990’s, both within Major Corporation and within academia.
General business ethics
- This part of business ethics overlaps with the philosophy of business, one of the aims of which is to determine the fundamental purposes of a company. If a company's main purpose is to maximize the returns to its shareholders, then it could be seen as unethical for a company to consider the interests and rights of anyone else.
- Corporate social responsibility or CSR: an umbrella term under which the ethical rights and duties existing between companies and society is debated.
- Issues regarding the moral rights and duties between a company and its shareholders: fiduciary responsibility, stakeholder concept v. shareholder concept.
- Ethical issues concerning relations between different companies: e.g. hostile take-over, industrial espionage.
- Leadership issues: corporate governance.
- Political contributions made by corporations.
- Law reform, such as the ethical debate over introducing a crime of corporate manslaughter.
- The misuse of corporate ethics policies as marketing instruments.
Professional ethics
Professional ethics covers the myriad of practical ethical problems and phenomena which arise out of specific functional areas of companies or in relation to recognized business professions.
Ethics of finance and accounting
- Creative accounting, earnings management, misleading financial analysis.
- Insider trading, securities fraud, bucket shop, fore scams: concerns (criminal) manipulation of the financial markets.
- Executive compensation: concerns excessive payments made to corporate CEO's.
- Bribery, kickbacks, and facilitation payments: while these may be in the (short-term) interests of the company and its shareholders, these practices may be anti-competitive or offend against the values of society.
Ethics of human resource management
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.
- Discrimination issues include discrimination on the bases of age (ageism), gender, race, religion, disabilities, weight and attractiveness. See also: affirmative action, sexual harassment.
- Issues surrounding the representation of employees and the democratization of the workplace: union busting, strike breaking.
- Issues affecting the privacy of the employee: workplace surveillance, drug testing. See also: privacy.
- 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: slavery[3], indentured servitude, employment law.
- Occupational safety and health
Ethics of sales and marketing
Marketing which goes beyond the mere provision of information about (and access to) a product may seek to manipulate our values and behavior. To some extent society regards this as acceptable, but where is the ethical line to be drawn? Marketing ethics overlaps strongly with media ethics, because marketing makes heavy use of media. However media ethics is a much larger topic and extends outside business ethics.
- Pricing: price fixing, price discrimination, price skimming.
- Anti-competitive practices: these include but go beyond pricing tactics to cover issues such as manipulation of loyalty and supply chains. See: anti-competitive practices, antitrust law.
- Specific marketing strategies: green wash, bait and switch, shill, viral marketing, spam (electronic), pyramid scheme, planned obsolescence.
- Content of advertisements: attack ads, subliminal messages, sex in advertising, products regarded as immoral or harmful
- Children and marketing: marketing in schools.
- 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.
- Defective, addictive and inherently dangerous products and services (e.g. tobacco, alcohol, weapons, motor vehicles, chemical manufacturing, bungee jumping).
- Ethical relations between the company and the environment: pollution, environmental ethics, carbon emissions trading
- Ethical problems arising out of new technologies: genetically modified food, mobile phone radiation and health.
- Product testing ethics: animal rights and animal testing, use of economically disadvantaged groups (such as students) as test objects.
Ethics of intellectual property, knowledge and skills
Knowledge and skills are valuable but not easily "own able" objects. Nor is it obvious who has the greater rights to an idea: the company who trained the employee or the employee themselves? The country in which the plant grew, or the company which discovered and developed the plant's medicinal potential? As a result, attempts to assert ownership and ethical disputes over ownership arise.
- Patent infringement, copyright infringement, trademark infringement.
- Misuse of the intellectual property systems to stifle competition: patent misuse, copyright misuse, patent troll, submarine patent.
- Even the notion of intellectual property itself has been criticized on ethical grounds: see intellectual property.
- Employee raiding: the practice of attracting key employees away from a competitor to take unfair advantage of the knowledge or skills they may possess.
- The practice of employing all the most talented people in a specific field, regardless of need, in order to prevent any competitors employing them.
- Bio prospecting (ethical) and bio piracy (unethical).
- Business intelligence and industrial espionage.
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