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Business ethics (also known as corporate ethics) is a form of applied ethics or professional ethics, that examines ethical principles and moral or ethical problems that can arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and entire organizations.[1] These ethics originate from individuals, organizational statements or the legal system. These norms, values, ethical, and unethical practices are the principles that guide a business.[2]
Business ethics refers to contemporary organizational standards, principles, sets of values and norms that govern the actions and behavior of an individual in the business organization. Business ethics have two dimensions, normative business ethics or descriptive business ethics. As a corporate practice and a career specialization, the field is primarily normative. Academics attempting to understand business behavior employ descriptive methods. The range and quantity of business ethical issues reflects the interaction of profit-maximizing behavior with non-economic concerns.
Interest in business ethics accelerated dramatically during the 1980s and 1990s, both within major corporations and within academia. For example, most major corporations today promote their commitment to non-economic values under headings such as ethics codes and social responsibility charters.
Adam Smith said in 1776, "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."[3] Governments use laws and regulations to point business behavior in what they perceive to be beneficial directions. Ethics implicitly regulates areas and details of behavior that lie beyond governmental control. The emergence of large corporations with limited relationships and sensitivity to the communities in which they operate accelerated the development of formal ethics regimes.[4]
Maintaining an ethical status is the responsibility of the manager of the business. According to a 1990 article in the Journal of Business Ethics, "Managing ethical behavior is one of the most pervasive and complex problems facing business organizations today."[5]
^"Business Ethics (Stanford Encyclopedia of Philosophy)". Plato.stanford.edu. 2008-04-16. Retrieved 2013-06-04.
^Fraedrich, John; Ferrell, Linda; Ferrell, O.C. (January 2016). Business ethics : ethical decision making and cases (Eleventh ed.). Boston, MA: Cengage Learning. ISBN 9781305500846. OCLC 937450119.
^Smith, A (1776/ 1952) An Inquiry Into the Nature and Causes of the Wealth of Nations. Chicago, Illinois: University of Chicago Press, p. 55
^Jones, Parker, et al. 2005, p. 17
^Stead, W. Edward; Worrell, Dan L.; Stead, Jean Garner (March 1990). "An integrative model for understanding and managing ethical behavior in business organizations". Journal of Business Ethics. 9 (3): 233–242. doi:10.1007/BF00382649. S2CID 189901276.
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