Business Ethics

In a general sense, ethics addresses fundamental questions such as: How should I live my life? That question leads to others such as: What sort of person should I strive to be? What values are important? What standards or principles should I live by? There are various ways to define “ethics.”  The simplest may be to say that ethics deals with “right” and “wrong.”  However, it is difficult to judge what may be right or wrong in a particular situation without some frame of reference.

Ethics or moral philosophy is a branch of philosophy that involves systematizing, defending, and recommending concepts of right and wrong conduct. It seeks to resolve questions of human morality by defining concepts such as good and evil, right and wrong, virtue and vice, justice and crime.

Corporate Ethics: Corporate ethics is a form of applied ethics or professional ethics that examines the ethical and moral principles and problems that arise in a business environment. It can also be defined as the written and unwritten codes of principles and values that govern decisions and actions within that organization. It applies to all aspects of business conduct on behalf of both individuals and the entire company.

The moral status and obligations of corporations is different from the moral status and obligations of human beings. Agency responsibility is frequently found in business; it is often complex, and it raises a number of special types of problems. In a large organization, the chain of agency frequently involves many people who are hierarchically related to one another. This raises the problems of moral responsibility, both for those at the top and for those lower down the chain. The delegation of authority to carry out a command or policy does not relieve the delegation of the moral responsibility for how the command or policy is carried out. Yet, we are morally responsible both for our actions and for the probable consequences thereof.

Moral responsibility is usually both ascribed to and assumed by individuals. The difference between corporate responsibility and human beings’ responsibility depends on the fact that corporations are limited and organized only for certain purposes, while human beings need to pay attention to his conduct as an individual as well as with regard to the corporation to which he/she belongs. The fact that a corporation does exist and has been established for certain purposes is no guarantee that it should exist or that its purposes are morally justifiable. But although we can morally evaluate the ends for which corporations are formed and the means by which those ends are pursued, corporations are not bound by a large range of moral rules that bind natural persons.

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