Business Ethics


Ethics is a wide topic or element that can be defined differently by different people and in different circumstances. Ethics in business can be defined as the rules that should be adhered to when individuals are conducting their businesses and when interacting with different people in a given setting of a business organization. Ethics can also be defined as rules of conduct that are recognized in respect to a given class of human actions or a particular group, culture etc.

Ethics principles

The same principles that guide an individual to act ethically should be applied to the way businesses also behave when dealing with their various stakeholders. In a given business setting, there are several stakeholders who are involved. They include the employees, customers, the suppliers, the government and entire communities that keep the business going in terms of profits and general growth that the businesses desire (Jennings 2011).

According to Megone (2002), acting in an ethical way means differentiating between wrong and right action and making the right choice. Businesses serve a wide range of individuals and in most times conflicts arise and most of them are caused by lack of ethics when conducting their operations. For example, many businesses which do not take care of the environment in which they are operating their businesses are said to be conducting their business unethically. They end up causing harm to the people surrounding them and they do not take any action towards reducing or helping out on the medical expenses. This leads to what is generally referred to as corporate social responsibility. When a business takes care of the environment in which it operates and is concerned about the people’s welfare, it is said to be socially responsible.

It is relatively easy to identify unethical business practices. For example a company should not use child labor and it should treat its workers fairly in terms of payment and provision of proper and right working conditions so that they can be as productive as they are expected. Companies should not unlawfully use copyrighted processes and other materials that they have not legally acquired. In many cases, it is not so easy for a company or any type of a business to maintain the required ethical conducts but it will be very easy for such an action to work if proper and right working procedures are followed by all organization leaders (Kaptein and Wempe 2002). Work and conduct codes in organizations assists employees and all the stakeholders of a given organization to act in the right manner and will assist them to avoid behaving unethical.

Examples of Business Ethics in a workplace

Most employees face a lot of dilemmas in the work place. A dilemma is a situation where an individual is torn between deciding on what should be treated as a bad or a good action. Some situation arises and most employees are not able to do the right thing or to make the required choice. Situations such as workers being tempted to leave the workplace earlier, taking credit of another worker’s hard work and even lying to a potential customer to sign an insurance policy so that they can increase a company’s wealth and so on (Ferrell, Fraedrich and Ferrell 2012). All these can be reduced or prevented if the right preventive measures are taken which involves creating of an ethical policy that clearly spells out acceptable and unacceptable actions. It should clearly state the necessary steps of discipline that will be taken to those employees found acting against the laid down rules of conduct.

The following are some examples of business ethics in a workplace that should be applied by most organizations and businesses to reduce unethical actions among their employees.

Working with the clients

According to Phillips (2003), it will be advisable and more diligent if there are strict laws as to how the employees should treat clients. The set out ethics policy should clearly spell out to the workers that they should treat the customers fairly and always be honest. This goes a step further in ensuring that the customers instill confidence in your employees. Employees should not hide the true prices of a service or good that a company is producing or offering in order to trick the clients and sign the policies. They should not further promise more of what a service or a good can deliver than it can. The ethics policy should clearly ban bullying and harassing of potential customers, they should be aware on when and how to approach the customers, what they should say to the customers and how often they should call the clients.

Cheating the company

The ethics policy should clearly stipulate the time the workers should report to work or else they will formulate their own time and the boss will always be in conflict with them. They will end up leaving the office early in terms of meeting a client at the end of the workday but in the real sense, they are going to watch a ballgame or to watch their favorite soap operas on television. They may claim they are in the workshop early in a working day but they are managing their drinking hangovers. Open communication should be instilled among the workers instead of the sneaking activities that they keep on doing in the workplace. The workers should be given a procedure on how they should ask or request for a leave, more so when it concerns their private matters.

Abusive Behaviors

An effective ethics policy forbids and restrains bad behaviors in any organization. Abusive behavior in an organization can take several forms such as sexual harassment, bullying of other workers, inappropriate jokes, stealing from co-workers and display of pornographic material on the office computer and TV screens and many other forms of behaviors that are not accepted by other workers. It should also spell out the punishment for people who are involved in such unethical conducts (Phillips 2003).

Undue credit

Some workers will try to gain credit or rather be recognized for the actions that they did not perform and others will feel unappreciated which will most likely affect the activities of an organization or a given business setting.  All employee complaints about other workers stealing their ideas should be dealt with promptly to avoid affecting other workers morale. All these should be involved in the ethics policy and strictly followed by all the members of an organization.

 Theories of Ethical Issues

Normative ethics is a branch of philosophy which is composed of two theories i.e. Mills Utilitarianism and Kant’s deontology. All the theories there in can be easily applied to explain the business ethics in a wider perspective. As stated earlier all that an individual thinks to be ethical should be practiced by all the businesses since businesses are comprised of individuals.

Utilitarianism theory is derived from the word utility and is a philosophical theory that was developed by Professor Mill in the nineteenth century with an aim of coming up with a theory that would fit in all ethical situations in the society (Sims 2002). Utilitarianism is an ethical theory that considers moral duty based on the consequences of a particular action. Utilitarianism is a consequentialist theory that considers moral worth of the society by advocating for all those actions that lead to maximum benefit to all members of the society which is one of its main advantages. Utilitarianism considers happiness of society members based on the human nature of persons always looking for ways to maximize their personal pleasures.

Utilitarianism has an advantage of appealing to common sense in the society at all times. Common sense is a premise that is present in all rational human beings and, therefore, it makes it possible for a human being to always make others happy by his or her actions as a consequence of common sense. Utilitarianism theory also has a benefit of promoting democracy in the society by considering the opinion of the majority group. Through utilitarianism, the society is able to achieve equality and fairness to all society members (Sims 2002).

Utilitarianism theory is based on practicality and rationality in the society and, therefore, does not rely on religious beliefs that cannot be verified. It is through rational calculation of number of people who are able to attain pleasure that happiness in the society is maximized. The only way utilitarianism theory works is only by using the principle of utility as the only way of judging right and wrong in the society .This helps a great deal in avoiding moral prejudices ,and judgments based on irrational basis of feelings and intuitions of human nature.

The great benefit of utilitarianism theory is its focus on quality as being central to all society members. As the founder of the theory once said, every being counts as one and no one counts more than once. With this taking, it emphasizes on equality of all members of the society (Megone 2002 ).All members of the society are a no exemption to achieving maximum pleasure and happiness which is the main principle of the theory. All members of the society are also expected to be responsible for the consequences of their actions whether good or bad. On the basis of its branch of act utilitarianism, when every rational human being when faced by a dilemma or a situation where a choice is involved, the important thing is to consider the consequences of the potential action involved.

Utilitarianism urges all rational beings to be careful in the society and uphold responsibility. It urges us to look at potential rules of action as a means of determining the resulting rule leads to maximum happiness it is considered (Phillips 2003). This helps rational human beings to follow a set of rules in the society that will uphold morality in the society. In general therefore utilitarianism advocates for moral actions that result to maximum happiness and good for the largest number of people in the society.

Utilitarianism theory though has some drawbacks as related to the good of the society. The comparative scale of utilitarianism theory is on the basis of pleasure and happiness acquired which cannot be measured. This calculation of determining right and wrong is difficult and complicated as not all human beings have the capability of making the judgments before the action is beforehand. The main principle of promoting action that result to moral good for the largest number of people in the society is itself a disadvantage. This is because in the process of promoting goodness for a larger group of people in the society it may come about with a price of harm to some people in the society. This is because utilitarianism theory considers greater good at the expense of some harmful in the society. This may be present where a violation of individual rights may take place in the process of achieving greater good of the society

According to Waluchow (2003), Kant Deontological theories of ethics are a contrast to consequentialist theory of utilitarianism and concentrates on individuals following universal moral rules thus making it a duty based branch of ethics. Deontologist theory argues that choices cannot be justified by their consequences as some choices tend to be morally forbidden. The theory therefore argues beforehand that a rational human being should act out of duty and not based on consequences. The major advantage of this theory is that the rightfulness of an action can be determined beforehand. This makes it logical since it is the rightfulness of the action and its conformity to the moral codes that make it right and not the effects.

Deontological theories have an advantage of making it possible for people to be consistent in their decision making since even in situations of dilemma a person should always incline the decision to what is morally accepted by the society .Deontological theory also helps people to place their priorities on friends, family and other close society members and thus manage to avoid and manage the over demands of the public systems that may be difficult to fulfill. Deontological theories have an advantage of giving an individual a chance to make a choice to doing an action which is morally correct based on rationality of his thoughts and not on consequences (Peterson and Ferrell 2005). Based on categorical imperative an individual can determine whether his actions are ethical or not with absolute certainty.

Deontological theories have an advantage of promoting sense and responsibility in the society as people are supposed to do the right thing that is expected and avoid doing wrong things because they are wrong. This helps individuals to respect others and recognize they have a moral duty to always do what is right and expected of them by societal ethics. This in addition helps to foster equality in respecting all human beings (Weiss 2008). Deontological theory also emphasizes on the value of every human being through avoiding wrong and doing what is right to everyone. Deontological theory also provides a foundation for human rights since it singles out the interests of a single individual even when it is at conflict with the interests of the majority in the society. Deontological theories also give an explanation about intentions and consider ethical issues to be a subject of intentions that a person has before doing a particular act.

Deontological ethics have a degree of absolutism through the moral rules it has put in place thus making it difficult to deal with cases that do not fit in the rules unless an exception is made. Deontological theories are not concerned with consequences and therefore may lead to actions that lead to a reduction of happiness in the world in the long run. Deontological theories also have a disadvantage of failing to provide a clear direction in solving conflicts between moral duties. The deontological theories do not offer an answer to varying and conflicting interests between individuals as they assume people should always follow a set of moral rules.


 Toyota is a global company that engages in business worldwide which goes beyond manufacturing to cover the area of research and development. This broad perspective of its activities helps to ensure it remains a trusted global company able to respond to the economic needs of the local societies and states (Sunita 2005). Toyota has also realized it is better placed compared to its competitors and, through its strong earnings and cash position, it will be able to offer better services and products to its customers globally in terms of quality, environmentally friendly and customer focused vehicles.

Such an organization should always work towards ensuring that the vehicles manufactured are environment friendly and they are also safe for all the people who are using them on the roads. This is a responsibility of the company to satisfy the needs of the consumers such as the production of fit vehicles to prevent harm to the consumers (Sims 2002 ). Following the recent developments whereby most of their vehicles were found to be having minor faults that included over speeding and other defaults that tinted their public relations globally, the technical error portrayed them as being insensitive to the society’s needs.

Applying the utilitarian theory discussed earlier, it would be advisable if they did a proper research so as to avoid such incidents. The theory advocates for production of fit goods and provision of proper services that will increase the welfare of the society as whole. Thus they never followed the theory of satisfying the society maximally as a whole and to satisfy their personal desire and increasing their profits (Kaptein and Wempe 2002). They aimed at increasing their profits but the entire management was not keen on the quality which is against the principles of the theory.

Most actions that are conducted by most human beings should bear in mind the end benefit to each and every member of the society in which they are operating. Toyota accepted to take back the vehicles and they did a further research on their safety and ensured the defaults have been rectified. They therefore applied their common sense which is advocated by the utilitarian theory (Sims 2002). It is vital to realize that common sense dictates what is right or wrong and always the right action should be utilized or taken into action.


Doing the right thing may have different meaning to different people in a business setting. Many leaders in organizations also assume that as long as there are laid down set of rules and conditions that explain ethical theories, all the workers will follow them, but this is not normally the case. Ethical policies should be regulated and revised always to guard stakeholders of an organization. In order to attain the desired outcomes, the ethical policies should be clearly communicated to all the involved participants.


Reference List

Ferrell, OC, Fraedrich, J, Ferrell, L, 2012, Business Ethics: Ethical Decision Making & Cases, Belmont, Cengage Learning.

Jennings, MM, 2011, Business Ethics: Case Studies and Selected Readings, Mason, OH, Cengage Learning.

Kaptein, M, Wempe, J, 2002, The Balanced Company: A Corporate Integrity Theory, London, Oxford University Press.

Megone, C, 2002, Case Histories in Business Ethics: Virtues and Moral Decision Making in Business, London, Routledge.

Peterson, RA, Ferrell, OC, 2005, Business Ethics: New Challenges for Business Schools and Corporate Leaders, London, M.E. Sharpe.

Phillips, R, 2003, Stakeholder Theory and Organizational Ethics, San Francisco, CA, Berrett-Koehler Publishers.

Sims, RR, 2002, Teaching Business Ethics for Effective Learning, London, Greenwood Publishing Group.

Sunita, 2005, Politics, Ethics and Social Responsibility of Business, New Delhi, Paragon Books.

Waluchow, WJ, 2003, The Dimensions of Ethics: An Introduction to Ethical Theory, London, Broadview Press.

Weiss, JW, 2008, Business Ethics: A Stakeholder and Issues Management Approach, Mason, OH, Cengage Learning.


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