Make a guess: what is not usually written in a sales agreement, a cooperation agreement or in an employment contract but is still of importance for successful business and work results?
What is not strictly a legal matter but rules relationships between corporations, private businesses, entrepreneurs and individuals?
What is this invisible but influential component of any business deal?
You are absolutely right, this is business ethics.
What is business ethics?
Business ethics is a code of conduct or moral rules that regulate the business sphere. Business ethics comprises moral values regulating decisions taken by companies and the way these decisions are implemented. Some rules of business ethics are obligatory and even imposed by laws.
Business ethics is a pool of aspects, including
- ethics of human resources management;
- ethics of production;
- ethics of marketing and sales;
- ethics of property, property rights and intellectual property rights;
- ethics of technology use;
- ethics of accounting and reporting;
- ethics of treatment;
- international business ethics, etc.
Factors affecting business ethics as compiled by NIEHS (the US National Institute of Health) include, among others, honesty, competence, objectivity, non-discrimination, respect for colleagues, human subject protection, legality, respect to intellectual property, social responsibility, confidentiality.
To think that ethics and business are incompatible is misconception. In the business world the goodwill of a company is one of its assets. Violating the ethical code even once or twice may lead to escalating rules breach and even to illegal actions and this will inevitably cause loss of reputation and perhaps the business itself. That is why everyday decisions taken by companies should be based on business ethics.
While personal ethics means fair and honest actions of an individual, business ethics is associated with fair and honest competition of companies. To prevent corrupt and illegal business activities and promote a fair play principle companies create their own corporate codes of conducts or codes of ethics.
All industry spheres have their own specific ethical guidelines. For example, business ethics in marketing deals with the problem of increasing shareholder profit and applying a responsible approach to customers and stakeholders. Business ethics of production means social responsibility and ensuring that production procedures, products and services cause no harm to people and the environment. Business ethics of technology is connected with the concepts of property, property rights and intellectual property rights. Business ethics of human resources management relates to every sphere of economy and refers to protection of human subject, non-discrimination of employees and a number of other social responsibility and legal matters.
Business ethics is implemented in any realm of professional activity to ensure successful results and build positive reputation of a company, an entrepreneur or an individual.