Are Business Ethics Necessary?

Did you know that over half of business managers conduct themselves unethically on the job? Even though figures have declined, around half of employees see misconduct at their jobs. Business ethics is an issue that affects us all, whether we run a company or are just an employee. What is business ethics, and why do we need it, if we do? Keep reading to find out.

What is business ethics?

Simply put, business ethics are a framework for making decisions regarding potentially sticky areas of business. These include things like bribery, corporate social responsibility, and more. Business ethics can be looked at outside of the law, but there are often laws dealing directly with what is and isn’t allowed.

An example could be the case of an auto parts manufacturer that has a large order from a company that makes trucks. If the company does not ship these parts on time, they will lose the contract. However, a quality control check discovers an error was made in one batch of the product. Checks on the entire shipment should be made, but they will take too long.

This raises a business ethics question. What should the quality control department do: ship the parts hoping that the remaining parts are fine, or delay the shipment and test the entire batch? If there are problems with some of the parts, the company that makes the trucks could face a huge scandal from their customers.

The cost of letting ethics go

Many people think that a successful business means having questionable ethics or morals. However, there is a hidden cost to letting ethics go. In a phenomenon called “ethical drift” when a company allows this to happen, organizations gradually lower moral standards.

In order to combat this, people in the organization have to make a conscious effort and institute a plan. Firstly, is the recognition of the fact that a business event has an ethical dimension that needs to be handled. Then, take responsibility for solving the issue in an ethical way. Finally, decide which rules apply and apply them. Even though there may be repercussions, companies should protect whistleblowers.

Common workplace ethics issues

Just about every workplace has ethics issues. The top issue is abusing company time. Coming in late and conducting personal business during work hours are both major examples. Many people don’t consider this to be stealing, but it is basically the same since it takes from the company on time employees are being paid for.

Ethics issues can be as serious as employees outright stealing from the company as well. Manipulating expenses, check tampering, and not recording sales are all ways that companies fall victim to unethical workers.

While this may be disappointing, the good news is that most people in a workplace are honest. In addition to following company standards, many are willing to report wrongdoing when they observe it happening. Companies can help by making it easy to report unethical practices and ensuring confidentiality for whistleblowers as well.