Rhonda Ledbetter |
Business ethics are forms of applied ethics or professional ethics that examine ethical principles and moral or ethical problems that arise in a business environment. It can also be defined as the moral values and principles set forth for a company or market. Proper business ethics are vital for a business to be successful, providing quality care and honesty to consumers. Business ethics are important because how a business handles ethical situations will have an effect on its business and an overall effect on the economy. Without business ethics, the economy will operate less efficiently. It will ultimately make less things available to consumers, lower quality, and higher prices. Unethical behavior or a lack of corporate social responsibility, by comparison, may damage a firm's reputation and make it less appealing to stakeholders
The definition of business ethics evolved around the United States in the 1970’s. Business ethics reflect the philosophy of business. Ethical issues include the rights and duties between a business, its employees, suppliers, customers, and neighbors. By the 1980’s at least 500 business ethics courses were being taught to at least 40,000 students. The history of business ethics will vary depending on how a person conceives business ethics under discussion. The history will also vary according to how the historian sees the subject.
Companies began to focus on their ethical stature since the late 1980s and 1990s in response to a number of extremely serious disasters, manmade economic disasters as well as natural disasters, which were either caused or made worse by unethical business practices. Series of major financial scandals involving Enron, Tyco International, HealthSouth, Adelphia Communications, WorldCom, Global Crossing, Rite Aid, and other companies have raised deep concerns about ethics in business. The managers and companies involved in these scandals have suffered mightily—from huge fines to jail terms and financial collapse. And the recognition that ethical behavior is absolutely essential for the functioning of our economy has led to