Concept of Business Ethics
need to go
beyond the interests of their
companies to the communities they serve.’
Tata, Former Chairman of the Tata group
‘A business that is in the making of
only money is a poor kind of business.’
Ford, Founder of Ford Motor Corporation.
Ethics is derived from the Greek word
‘ethos’ which means a person’s fundamental orientation towards life. It governs
the behaviour, derived from the moral standards which help to determine right
or wrong, good or evil. Ethical behaviour is the acts consistent with the moral
standards or codes of conduct established by society. It may change over time
and differ from culture to culture. For
example, political bribes or payoffs may be acceptable in one culture but not
in other. Ethical issues are inevitable in business.
Business ethics may be defined as a set
of moral standards to be followed by owners, managers and business people.
These standards determine the conduct and behaviour of business people.
Business ethics reflects the conduct in the context of business.
Business exists to supply goods and
services to the people from social point
of view but from individual point of view, the primary objective of any
business unit is to make profit. The individual objective should not be in
conflict with societal objective. These two objectives normally contradict each
other, as one business enterprise may be good in individual objective and bad
at societal objective and vice versa.
This raises the question of what is
right and what is wrong. The subject matter of ethics is concerned with
establishing linkages between individual good and social good.
Ethical standards are often enacted into
laws. For example charging
fair prices to customers, using fair weights for
measurement of commodities giving fair treatment to workers, earning reasonable
All business units have realised that ethics is vitally important for the existence and progress of the business as well as the society. It is very important as it improves public image, earns public confidence, and leads to greater success. Ethics and profits go together in the long run. It enhances the quality of life, standard of living and business.