Business ethics is the unwritten and written rules and values that guide decision-making and conduct within businesses. It applies to all levels of business conduct, both internal and external and is directly relevant to the conduct of managers and individuals in an organizational setting. Alexander Djerassi believes that fair and equal business ethics leads to a better work environment and more profits. When a business performs well or poorly, there will always be blame for business ethics or business practices. The importance of business ethics training cannot be understated, as is illustrated by examples like the tobacco industry, asbestos, and food safety, to name a few.
Regardless of its size, every business must have a legal system in place that manages the interactions of its various personnel and stakeholders. Where this is not possible, a business ethics management plan can be implemented to ensure that the various relationships within the organization are described clearly, and any potential conflicts of interest are identified and managed. The primary objective of business ethics training is to enhance understanding of the different ethical standards that managers and employees may need to comply with when making decisions for the advantage of the business and its various stakeholders. It also teaches managers how to increase organizational commitment to these ethical standards by rewarding those who comply with them and punishing those who break these ethical obligations.
There are four main focus areas of business ethics: learning objectives, learning outcomes, learning processes, and principles. Learning objectives address the critical points that managers need to understand and incorporate into their decision-making process. For example, one learning objective is to ensure that all organization members are fully informed about the critical elements of business ethics and what they mean to them. Learning outcomes describe how particular objectives are learned, implemented, and maintained. Critical goals and achievements are continually reviewed and assessed—learning principles to identify and support a particular business ethics model and build on the other three focus areas.
In order for managers to understand and implement business ethics effectively, it is necessary to understand and evaluate each of the four main focus areas and their specific contribution to business ethics. These four areas are learning objectives, learning outcomes and principles, supporting organizational performance and ethical behavior, customer needs, and satisfaction. The key objective of each area is to improve organizational performance and improve customer satisfaction and corporate value. The primary focus areas are:
Learning objectives address how specific business ethics topics are taught to employees through courses and other in-service delivery activities. These objectives aim to promote good behaviors, enhance organizational performance, and provide a framework for decision-making. Learning outcomes describe the procedures, policies, guidelines, and concepts that employees must adhere to when making decisions in business ethics. These key terms include accountability, investment, performance, fairness, reputability, and respect. These key terms are used in combination to form the foundation of organizational policies and practices.
A company’s reputation for being fair reflects its success and employees’ trust in the firm. Companies achieve four significant ways: creating, communicating, rewarding, and correcting errors and faults. A key term here is “rewarding,” which means providing employees with a paycheck and other types of incentives for good performance. Communication also refers to informal communication like talking to employees and management regarding important business ethics topics. Finally, correcting faults and errors refers to updating policies and addressing complaints by employees.
The fourth area of business ethics focuses on the relationships between people and organizations. People play a critical role in an organization; therefore, business ethics also address how organizations in their interactions treat people. Some of the most fundamental ethical issues in this area are treating employees as individuals, respecting workers’ privacy, treating workers as the moral authority, inculcating honesty and reliability. Organizations can achieve the above aims by considering the impact of actions on employees, their freedom to act, the nature of relationships with other people, and the impact of their behavior on the relationships of those within their employment environment. Another area of focus is diversity and workplace fairness. A core value of business ethics involves the importance of creating a work environment that is free from the presence of biases based on race, gender, sexual orientation, age, religion, or disability.
When combined with corporate social responsibility, business ethics can help resolve ethical issues in many different ways. A core value of business ethics is responding to and addressing the needs of the affected parties as quickly as possible, using a business model that is consistent with the local context, using accurate and timely methods, and valuing the contributions of all people. By following these principles, businesses can effectively promote social responsibility and build a strong sense of teamwork in the business environment. In addition to these crucial areas, a strong understanding of the global environmental crisis and other ethical issues facing organizations today promotes good corporate citizenship. These are just some of the essential considerations that business owners need to keep in mind when formulating a business ethics policy. Alexander Djerassi uses sound and fair business ethics in his business.