Business ethics is more than just a concept used to enhance the image of a

corporation; ethics are the very foundation of success.Business

ethics should be applied from the very moment a firm opens its doors.
Business ethics actually consists of the actions of individuals working
within businesses.

Business Ethics and Individual Behavior

The subject of ethics is often considered abstract or relative by those who believe that
rules do not always apply to them. Rules and laws apply to everyone, as do standards of
right and wrong behavior. Each individual's actions within the company affects both the
individual and the entire organization. When an employee acts ethically and responsibly,
it helps the entire organization.

Leaders set the tone for ethics in their organizations. It is unfortunate that some
employees in the upper echelons of the corporate ladder decide to act unethically, but it
is a fact of business and of life. For this reason, it is important for a business to be
careful of who they promote within their company.

When the wrong kinds of people are promoted in an organization, it sends a message
that unethical behavior is not only tolerated, it is rewarded. Companies looking to be
successful cannot afford to have leaders who send negative messages about ethics.

Corporate Social Responsibility

Corporate social responsibility is a phrase heavily used in the business world. Corporate
social responsibility refers to business practices and initiatives that benefit society, not
just the company.

For instance, businesses that focus on energy efficiency and initiatives that benefit the
environment are practicing corporate social responsibility. So are companies that
practice philanthropy and have excellent labor practices. Corporate social responsibility
is an integral part of business ethics and should be practiced by all entities, whether
large or small.

Corporate social responsibility involves each individual within a company participating

in giving back to the community. In this way, the entire company is contributing to
 society and acting ethically. To understand the importance of ethics in business, it's
important to realize how business ethics affect those involved. Ethical and unethical
behavior directly impacts not only the organization but the community and society at
large.

usiness Ethics Examples

Business ethics are not as complicated or abstract as one might think. A simple way to evaluate whether
or not a practice is ethical is to determine the ultimate impact of that practice.

Example 1: Executive Compensation and Layoffs

When the CEO of a company accepts a raise or does not take a pay-cut when several people are being
laid off, this may be considered unethical. The CEO has a responsibility to do what's best for the entire
corporation. When a company has to lay off employees but the CEO doesn't share in the suffering, it
shows a lack of care for those in the organization.

Example 2: Below Standard Wages

Paying a fair wage is an ethical practice, but some companies or managers seek to pay the lowest
possible wages to boost profits. However, this can backfire and harm the business. If a store pays his or
her employees less than the going rate while knowing exactly what the going rate is, several things
could happen to damage the business.

Studies show that higher-wage companies within an industry perform better than lower-wage
companies. As a result, the store is likely to under-perform.

Poorly paid employees are more likely to quit, costing the store money in turnover, rehiring, and
retraining.

Underpaid employees are less engaged with their work, less likely to go the extra mile, and less
innovative.

Effects of Unethical Business Practices

Poor ethical decisions can affect a company in a variety of ways. For example:
 Legal problems: Businesses that act unethically in ways that break the law may face large fines and
other penalties.

Poor employee performance: A lack of ethics within a company affects the way employees do their
job. People can decide that because leaders can break the rules, they can too. This can lead them to
damage the company. They may also become discouraged or not see the need to work hard in an
unethical environment.

Poor company credibility: When a company is unethical, it affects its reputation. Not only will the
leaders and company lose respect from employees, they will lose credibility with the general public as
well. This can result in reduced sales, lost customers, and significant financial harm.

Impact of Ethical Practices

On a more positive note, an establishment that gives significantly to charity each year is practicing
ethical behavior and exhibiting corporate social responsibility. While this practice benefits the company
by allowing them to write off the donation against their taxes, it also sends out a positive message and
has a positive impact on the community. This practice of giving back can bring in more customers,
increase or enhance positive business relationships, and even allow the firm to add new employees.

Ethical practices also help companies develop an excellent reputation, which helps bring in additional
customers, generates positive publicity, and can help solidify support for the organization in times of
crisis and controversy.

Business Ethics are Ultimately Personal Ethics

Business ethics and personal ethics go hand in hand because a company is simply a community of
employees working together to achieve specific goals. As a result, employees must share the ethics the
company champions, or at least be willing to practice them while employed.

Some businesses give their prospective employees informational materials that contain a mission
statement, policies, and other ethical responsibilities that all employees must abide by. While these
efforts are commendable, it does nothing if the employee refuses to respect the organization by
following the guidelines laid out for them. Instead, companies should look for employees that fit the
culture and ethics of the business from the outset.

Understanding the importance of ethics in business is the key to success. Customers, management, and
employees all appreciate honest and ethical practices. Business ethics are vital because they help
maintain a great reputation, help avoid significant financial and legal issues, and they ultimately benefit
everyone involved.
ntroduction

Society spends a lot of time pointing fingers and assessing

blame when things go wrong. Whether it's a scandal on
Wall Street, or an oil spill in Alaska, attention is often
focused on negative issues when it comes to business and
the environment and social responsibility. However, there
are also plenty of scenarios and examples of the positive
impact of ethics in the business world.

When it comes to employee rights, there have been huge

advances made in the workplace since the early 20th
century, with a positive impact for companies that provide
employees with decent hours, wages and safe working
conditions.

A Look Back

It really wasn't that long ago that employees had no rights.

If a person wanted a job, they did what the boss wanted
them to, right or wrong, safe or not. A number of
advancements and improvements have been made to help
protect employees, their safety, their families, and their
wages and hours.
Since the early 20th century, the work environment has
steadily improved in many fields, including finance,
manufacturing, transportation, retail, food, and medicine.
Child labor laws protect children, while unions protect
workers, and employment laws protect the rights of
millions of employees.
One of the greatest advancements of the 20th century was
in the area of employee rights. Safety, health, and privacy
in the workplace are taken for granted by many today.
Employment issues have a great impact on society in
general, from entry-level to management-level positions.
Most of us don't have the luxury to control our work
environment, and we must rely on others to make sure
that our rights are protected.
Employee rights are common in business today, not only in
the United States, but around the world. They are expected
by many of us, from the 16-year-old filling out an
application for his first job, to the retiree who has spent
years working his way up the ladder. Legal rights are
granted to most employees based on court rulings and
legislation. Therefore, employees have basic rights that
include being paid a minimum wage, enjoying equal
opportunities in the workplace, and in many scenarios, the
right to unionize.
Many employees today expect some form of health care
benefits package as well as paid holidays, pension or
retirement funds, and maybe even the token holiday bonus
when they sign on to work for a particular employer.
Such issues are often discussed during the hiring process,
and contracts are signed so that both sides understand
rights and expectations. Employee rights protecting
pregnant women, or those requesting a family medical
leave, are guaranteed in most places of business.
While an employer typically offers an agreement that
contains an explanation of wages and benefits, as well as
working conditions, they also expect something in return.
In this sense, legal and moral considerations bind the two
together. The employer expects a certain amount of work
to be completed during the course of a workday, and the
employee expects to be adequately paid or reimbursed for
said work. This forms the basis for most employer-
employee relations.
Managers and employers are a key component to
managing ethical conduct within the workplace. Most
experts consider that in the business world, ethics is all
about behavior and attitude. It's a concept that's based on
respect, and upon the Golden Rule, or a universal version
thereof which states, "Do unto others as you would have
them do unto you." Managers are often faced with difficult
decisions of whom to hire, fire, promote and demote.
Ethical behavior in the workplace often is based on how
people behave in such situations.
When ethical standards of conduct expectations are
promoted in an effective and proactive manner, business
will run more smoothly, and hopefully, both employees and
employers will create a comfortable place of business
where theft, dishonesty, bribery, and other unsavory
aspects of human behavior will be reduced or eradicated.
The workplace is the responsibility of a manager, and it
doesn't matter whether the organization is large or small.
However, it should be noted that low-level managers hold
an extreme amount of influence over subordinates and
should take advantage of the situation by providing good
examples and standards in such cases.
Basically, managers who are very clear as to what is
expected and who demand integrity, loyalty, and honesty
create a work environment that discourages unethical
behavior. The benefits? Happy employees have been shown
to be more productive than those who are dissatisfied with
management in their places of business. Happy employees
are less likely to be dishonest or deceitful.

In addition, happy employees are more than willing to

spread the word about their place of business. Attracting
positive community feedback is a great boost to many local
companies and corporations who rely on community
support in all fields of production, retail and manufacturing.

Integrity is officially defined as a quality or state of being

that is complete or undivided. Ideally, ethical behavior in
the business place also equates to ethical behavior in other
aspects of society, including the home.

Employee Rights
Employee rights protect employees against harassment,
discrimination, unfair termination and many other rights,
including:
Leaves of absence and vacations
Rights regarding criminal records
Defamation
Employee negligence
Union or other group activities
Workers compensation
Issues involving discipline
Whether protesting race or age discrimination, or against
incidents in the workplace that result in emotional distress
or injury, employees are protected by federal law from
many unlawful employment practices that used to be
commonplace.
Protesting unequal pay, pregnancy discrimination,
disability, or wrongful job termination is a guaranteed right
of most employees regardless of industry or job field.
The National Labor Relations Act enforces employees in
private-sector jobs in their right to organize. Such
employees are legally protected from Union or employer
misconduct as well as having the right to form a union.
Under the National Labor Relations Act, employees enjoy
such rights as:
Joining a union, whether the union is recognized by
an employer or not
Forming, or attempting to form, a union among the
employees
Assisting a union in organizing fellow employees
Engaging in protected concerted activities. This
means activities that seek to improve or modify working
conditions and wages
The National Labor Relations Act prohibits employers from
in any way restraining or coercing or dissuading an
employee from joining in any of the above activities. Such
regulations help to provide employees against unlawful and
illegal behavior and practices.
While the National Labor Relations Act offers employees
many rights, it does not include coverage for all workers.
For example, someone who is employed as an independent
contractor is not covered under the rights guaranteed by
this act. Those employed by federal, state, or local
governments are also not covered. However, the Federal
Labor Relations Authority and the Merit Systems Protection
Board addresses all issues involving federal government
employees. Transportation employees are covered and
protected by various regulations and rights defined by
the National Mediation Board.
Employees should realize that many federal laws and rights
are divided between the Department of Labor and
the Equal Employment Opportunity Commission. For
example, the U.S. Department of Labor is involved in
employment issues such as:
Occupational safety and health
Family medical leave
Employee retirement income
Immigration reform and control
Employee benefits security
Labor management reporting and disclosure
Fair labor standards
The Equal Employment Opportunity Commission handles
issues involving:
Religion
Age
Race
Gender
Disability
The Occupational Safety and Health Administration, under
direction of the United States Department of Labor, passed
workers' rights legislation in 1970 that guarantees
employees a safe workplace. The Occupational Safety and
Health Act of 1970, more commonly known as OSHA,
requires employers to "provide a workplace that is free of
serious recognized hazards and in compliance with OSHA
standards."
As you can see, ethics and behavior in any place of
business have a large impact on how businesses develop
and promote employee rights and the expectations of both
employers and employees. Business ethics, when followed,
help increase productivity as well as reputation for large
and small businesses. Now that we have discussed some of
the ways in which business ethics affect domestic
corporations and organizations, how does this apply to
international business ethics?

The Advantages of Ethical Behavior in Business

by Brian Hill

Ethical people are those who recognize the difference between right and wrong and
consistently strive to set an example of good conduct. In a business setting, being ethical
means applying principles of honesty and fairness to relationships with coworkers and
customers. Ethical individuals make an effort to treat everyone with whom they come in
contact as they would want to be treated themselves.
Build Customer Loyalty
Consumers may let a company take advantage of them once, but if they believe they have
been treated unfairly, such as by being overcharged, they will not be repeat customers.
Having a loyal customer base is one of the keys to long-range business success because
serving an existing customer doesnt involve marketing cost, as does acquiring a new one. A
companys reputation for ethical behavior can help it create a more positive image in the
marketplace, which can bring in new customers through word-of-mouth referrals. Conversely,
a reputation for unethical dealings hurts the companys chances to obtain new customers,
particularly in this age of social networking when dissatisfied customers can quickly
disseminate information about the negative experience they had.

Retain Good Employees

Talented individuals at all levels of an organization want to be compensated fairly for their
 work and dedication. They want career advancement within the organization to be based on
the quality of the work they do and not on favoritism. They want to be part of a company
whose management team tells them the truth about what is going on, such as when layoffs or
reorganizations are being contemplated. Companies who are fair and open in their dealings
with employees have a better chance of retaining the most talented people. Employees who
do not believe the compensation methodology is fair are often not as dedicated to their jobs
as they could be.

Positive Work Environment

Employees have a responsibility to be ethical from the moment they have their first job
interview. They must be honest about their capabilities and experience. Ethical employees are
perceived as team players rather than as individuals just out for themselves. They develop
positive relationships with coworkers. Their supervisors trust them with confidential
information and they are often given more autonomy as a result. Employees who are caught
in lies by their supervisors damage their chances of advancement within the organization and
may risk being fired. An extreme case of poor ethics is employee theft. In some industries,
this can cost the business a significant amount of money, such as restaurants whose
employees steal food from the storage locker or freezer.

Avoid Legal Problems

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At times, a companys management may be tempted to cut
corners in pursuit of profit, such as not fully complying with
environmental regulations or labor laws, ignoring worker
safety hazards or using substandard materials in their
products. The penalties for being caught can be severe,
including legal fees and fines or sanctions by governmental
agencies. The resulting negative publicity can cause long-
range damage to the companys reputation that is even
more costly than the legal fees or fines. Companies that
maintain the highest ethical standards take the time to train
every member of the organization about the conduct that is
expected of them.

Ethical Compliance in an

Organization

3The Importance of Ethics in

Organizations

4Effects of a Lack of Ethics on a

Business Environment