Business ethics should apply to all businesses around the globe. However, there is a great difference in the degree of business ethics practiced, depending on where the business is located. In some areas, such as Latin America business ethics are almost non-existant, while in other areas, such as North America, business ethics are strongly in place.
Business ethics are about corporate responsibility and the improvement of business practices. Many people are attracted to ethical companies both as employers and as consumers. The global economy has put pressure on countries to improve business ethics in order to be able to compete on a global scale.
Corrupt practices are no longer tolerated like they once were. Although we still see examples of corruption, such as lead paint in children’s’ toys or human rights abuse. When companies in today’s economy decide to ignore business ethics in favor of a higher profitability they will create their own demise as the demand for their products and services diminish, and in many cases are outright band from trading partners.
Business ethics includes the elimination of:
• Special favors
• Misappropriation of funds or property
• Insider trading
• Price fixing
• Human rights issues
• Infringement of intellectual property rights
• Use of unsafe products, ingredients, etc.
When a company is unable to act in a manner considered to include business ethics there are expectations placed on them to provide a valid reason why this has occurred such as health issues, national laws, or a company’s code of ethics.
Part of the business ethics philosophy is “doing well by doing good.” Society holds modern business to a much higher standard than even a decade ago. There is a social contract and companies are considered to be part of that contract. If they fail to deliver they will be punished by society including consumers, employers, media, and the government. Businesses that ignore that social contract and business ethics will not survive in the new world order.
The push is towards a world that is more moral and that is where business ethics come into play. There are much greater expectations placed on companies and we hold them to a much higher standard. There are also a many more legal laws and acts in place, and because of globalization and access to world financial markets the demands are high.
Business ethics will continue to change and evolve as society changes and evolves. However, in the last ten to twenty years we have seen significant improvements and we as a society should be proud of those improvements. However, we should not assume that we have perfected business ethics because nothing could be further from the truth. In fact, even in nations with solid practices there are businesses that choose to ignore business ethics and continue to operate with unacceptable practices until their actions are brought to light either as a result of an incident or as a result of exposure through media, employees, or other means.