Every society and every culture has its own definition of business ethics. Although the word ethics itself is very broad, there will always be unwritten rules on how businesses should be done in every place. Even illegal businesses and the crime rings underworld have a set of rules of conduct that governs them on how they do business.
From an individual point of view, the primary objective of a business firm is to earn profits. But the society point of view is different, according to the society business exists to supply goods and services to the people. One may expect that the individual goals of the firm would not be in conflict with the objectives of the society.
However, business enterprises are run by human beings whose decisions and actions may not always be in accordance with the expectations of the society. An enterprise may be good in terms of economic performance but poor in terms of social performance like supplying products at reasonable prices. This raises the question of what is wrong and what is right from the society’s point of view. The subject matter of ethics is concerned with establishing linkages between individual good and social good.
Concept of business ethics
The word ethic means character, norms, ideals, morals prevailing in a group or society. Ethics may be viewed as the entire body of moral values that society attaches to the actions of human beings. Ethical standards are often enacted as laws. But ethical behavior is just and fair conduct which goes beyond observing laws and government regulations. It means adhering to moral principles, being guided by particular values, and behaving in a way people ought to act.
The set of principles called ethics may be written or unwritten codes or principles governing a professional or human community. An ethically responsible enterprise develops a culture of caring for people and environment and commands a high degree of integrity in dealing with others.