Overview::Business ethics


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Overview Business ethics reflects the philosophy of business, of which one aim is to determine the fundamental purposes of a company. If a company's purpose is to maximize shareholder returns, then sacrificing profits to other concerns is a violation of its fiduciary responsibility. Corporate entities are legally considered as persons in USA and in most nations. The 'corporate persons' are legally entitled to the rights and liabilities due to citizens as persons.

Ethics are the rules or standards that govern our decisions on a daily basis. Many equate “ethics” with conscience or a simplistic sense of “right” and “wrong.” Others would say that ethics is an internal code that governs an individual’s conduct, ingrained into each person by family, faith, tradition, community, laws, and personal mores. Corporations and professional organizations, particularly licensing boards, generally will have a written “Code of Ethics” that governs standards of professional conduct expected of all in the field. It is important to note that “law” and “ethics” are not synonymous, nor are the “legal” and “ethical” courses of action in a given situation necessarily the same. Statutes and regulations passed by legislative bodies and administrative boards set forth the “law.” Slavery once was legal in the US, but one certainly wouldn’t say forcibly enslaving humans was an “ethical” act.

Economist Milton Friedman writes that corporate executives' "responsibility... generally will be to make as much money as possible while conforming to their basic rules of the society, both those embodied in law and those embodied in ethical custom".<ref name=mf1970>{{#invoke:citation/CS1|citation |CitationClass=news }}</ref> Friedman also said, "the only entities who can have responsibilities are individuals ... A business cannot have responsibilities. So the question is, do corporate executives, provided they stay within the law, have responsibilities in their business activities other than to make as much money for their stockholders as possible? And my answer to that is, no, they do not."<ref name=mf1970/><ref>Friedman, M. (1984). "Milton Friedman responds—an interview with Friedman." Business and Society 84(5)</ref><ref>Bevan, D. (2008).Philosophy: A Grounded Theory Approach and the Emergence of Convenient and Inconvenient Ethics. Cutting Edge Issues in Business Ethics M. Painter-Morland and P. Werhane. Boston, Springer. 24: 131–152.</ref> A multi-country 2011 survey found support for this view among the "informed public" ranging from 30 to 80%.<ref>{{#invoke:Citation/CS1|citation |CitationClass=journal }}</ref> Ronald Duska views Friedman's argument as consequentialist rather than pragmatic, implying that unrestrained corporate freedom would benefit the most in long term.<ref name=Duska>{{#invoke:Footnotes|harvard_citation_no_bracket}} Contemporary Reflections on Business Ethics.</ref><ref>{{#invoke:Footnotes|harvard_citation_no_bracket}} Activist Business Ethics</ref> Similarly author business consultant Peter Drucker observed, "There is neither a separate ethics of business nor is one needed", implying that standards of personal ethics cover all business situations.<ref>Drucker, P. (1981). " What is business ethics?" The Public Interest Spring(63): 18–36.</ref> However, Peter Drucker in another instance observed that the ultimate responsibility of company directors is not to harm—primum non nocere.<ref>{{#invoke:Footnotes|harvard_citation_no_bracket}} Activist Business Ethics</ref> Another view of business is that it must exhibit corporate social responsibility (CSR): an umbrella term indicating that an ethical business must act as a responsible citizen of the communities in which it operates even at the cost of profits or other goals.<ref>Pinnington, A. H. and Lafferty, G. (2002). Human Resource Management in Australia. Melbourne: Oxford University Press ISBN 0-19-551477-7</ref><ref name=program>Good Governance Program. (2004). Business Ethics: A manual for managing a responsible business enterprise in emerging market economies. (pp.93–128) Washington DC: Good Governance Program, US Department of Commerce</ref> In the US and most other nations corporate entities are legally treated as persons in some respects. For example, they can hold title to property, sue and be sued and are subject to taxation, although their free speech rights are limited. This can be interpreted to imply that they have independent ethical responsibilities.{{ safesubst:#invoke:Unsubst||date=__DATE__ |$B= {{#invoke:Category handler|main}}{{#invoke:Category handler|main}}[citation needed] }} Duska argues that stakeholders have the right to expect a business to be ethical; if business has no ethical obligations, other institutions could make the same claim which would be counterproductive to the corporation.<ref name=Duska/>

Ethical issues include the rights and duties between a company and its employees, suppliers, customers and neighbors, its fiduciary responsibility to its shareholders. Issues concerning relations between different companies include hostile take-overs and industrial espionage. Related issues include corporate governance;corporate social entrepreneurship; political contributions; legal issues such as the ethical debate over introducing a crime of corporate manslaughter; and the marketing of corporations' ethics policies.{{ safesubst:#invoke:Unsubst||date=__DATE__ |$B= {{#invoke:Category handler|main}}{{#invoke:Category handler|main}}[citation needed] }} According to IBE/ Ipsos MORI research published in late 2012, the three major areas of public concern regarding business ethics in Britain are executive pay, corporate tax avoidance and bribery and corruption.<ref>For a summary of the study see</ref>

Ethical standards of an entire organisation can be badly damaged if a corporate psychopath is in charge.<ref>Boddy C, Ladyshewsky RK, Galvin PG Leaders without ethics in global business: corporate psychopaths Journal of Public Affairs Vol10 June 2010 P121-138</ref>

Business ethics sections
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