Business Ethics: Principles and Practice

Business ethics definition and scope

Business ethics is the application of ethical and moral principles to business activities. Also called corporate ethics, it examines the standards, values, norms, and principles that guide the conduct of individuals and organizations in business environments. These principles may arise from personal beliefs, organizational codes, professional standards, social expectations, or the legal system. Business ethics applies to all aspects of business conduct and helps address issues that may extend beyond the direct control of government regulation. The scope of business ethics includes both normative and descriptive dimensions. Normative business ethics focuses on how businesses and their members ought to behave, while descriptive business ethics examines how they actually behave. Major areas include corporate governance, finance, human resource management, procurement, marketing, sales, employee rights, customer and supplier relations, environmental responsibility, taxation, executive compensation, and corporate social responsibility. Business ethics also considers the responsibilities businesses owe to shareholders, employees, consumers, communities, and other stakeholders, recognizing that legal behavior is not always identical to ethical behavior.

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Normative and descriptive business ethics

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