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Introduction to Business Ethics

Author: Jim Riley  Last updated: Sunday 23 September, 2012

What are business ethics?

Ethics are moral guidelines which govern good behaviour

So behaving ethically is doing what is morally right

Behaving ethically in business is widely regarded as good business practice.  To provide you with a couple of quotes:

Two quotes on business ethics

Ethical principles and standards in business:

  • Define acceptable conduct in business
  • Should underpin how management make decisions

An important distinction to remember is that behaving ethically is not quite the same thing as behaving lawfully:

  • Ethics are about what is right and what is wrong
  • Law is about what is lawful and what is unlawful

An ethical decision is one that is both legal and meets the shared ethical standards of the community

Businesses face ethical issues and decisions almost every day – in some industries the issues are very significant.  For example:

Should businesses profit from problem gambling?

Should supermarkets sell lager cheaper than bottled water?

Is ethical shopping a luxury we can’t afford?

You will probably note the link between business ethics and corporate social responsibility (CSR).  The two concepts are closely linked:

  • A socially responsible firm should be an ethical firm
  • An ethical firm should be socially responsible

However there is also a distinction between the two:

  • CSR is about responsibility to all stakeholders and not just shareholders
  • Ethics is about morally correct behaviour

How do businesses ensure that its directors, managers and employees act ethically?

A common approach is to implement a code of practice. Ethical codes are increasingly popular – particularly with larger businesses and cover areas such as:

  • Corporate social responsibility
  • Dealings with customers and supply chain
  • Environmental policy & actions
  • Rules for personal and corporate integrity


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Revision quizzes for business students

Starting a Business

Sources of Finance for a Startup
Franchising
Cash Flow Forecasting for a Startup
Creating & Protecting Business Ideas
Startups and Understanding the Market
Market Research for a Startup
Locating the Startup Business
Choosing a Legal Structure for a Startup
Employing People in a Startup
Generating and Protecting a Business Idea
Using Breakeven in Decision-Making

Finance

Revenues
Breakeven Basics
Costs, Revenues and Profits
Business Costs
Using Budgets
Using Breakeven in Decision-Making
Investment Appraisal Basics
Financial Strategies
Measuring and Improving Profit
Improving Cash Flow
Working Capital
Balance Sheet
Income Statement
Financial Efficiency Ratios
Profitability Ratios and ROCE
Liquidity Ratios
Gearing

Marketing

Competition
Products & Brands
Place (Distribution)
Promotion
Pricing
Price Elasticity of Demand

Business Organisation

Basics of Business Growth
Business Activities
Legal Structure Basics
Franchising
Sole Traders and Partnerships
Limited Companies
Generating and Protecting a Business Idea
Organisational Structures

People

Working in Teams
Communication Basics
Communication Methods
Workforce Planning
Recruitment, Selection & Training
Employee Motivation
Organisational Structures

Operations

Operational Objectives
Critical Path Analysis
Scale and Resource Mix
Lean Production
Capacity Management
Customer Service Basics
Managing Quality
Operational Decision-making
Using Technology in Operations
Working with Suppliers

Economic Environment

Economic Sectors
Government Spending & Taxation
Inflation
Unemployment
Interest Rates & Monetary Policy

Business Strategy

Leadership styles
Business Culture
Change Management







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