Business ethics is the branch of ethics that examines ethical rules and principles within a commercial context; the various moral or ethical problems that can arise in a business setting; and any special duties or obligations that apply to persons who are engaged in commerce.
Those who are interested in business ethics examine various kinds of business activities and ask, "Is the conduct ethically right or wrong?"
WHEN PEOPLE SPEAK ABOUT BUSINESS ETHICS THEY USUALLY MEAN ONE OF THE THREE THINGS:
1. Avoid breaking criminal law in one's work-related activity;
2. Avoid action that may result in civil law suits against the company;
3. Avoid actions that are bad for the company's image.
Robert F Hartley, in his book Business Ethics, argues that the long-term best interests of businesses are served by seeking a trusting relationship with the public. Businesses in Pakistan tend to undermine the affect of ethics and responsibility on the financial performance. Some of them are catching up but sadly most do not even accept the relationship of ethics and responsibility and profits.
A study of corporate environmental positioning in the global oil and gas sector by Innovest Strategic Value Advisors Inc, released in 2002, indicates that leading firms posted superior results across a number of financial metrics including price-to-earnings ratio, price-to-cash flow, and operating per share, as well as in aggregate share price movement.
The report examines the extent to which environmental, social and political factors influence the generation and protection of shareholder value within the oil and gas industry and provides strong evidence of the financial merits of sustainability leadership.
In total, 17 integrated oil and gas firms were analysed using innovest's EcoValue'21(r) rating methodology which benchmarks companies in various aspects of environmental risk, business opportunity and management strategy.
Key themes of this years report included global climate change,. involvement in renew able energy technologies, resource usage, development of clean fuels, exposure to sensitive sites, and environmental management capacity and energy efficiency.
According to Dr Martin Whittaker, the study's primary author, the most successful companies in this sector over the long term will be those who are able to provide greater value added for customers - via a range of new and higher margin products and services - and to serve shareholders by reducing operating risks and optimising efficiency In a business like the oil and gas industry, where margins are already razor thin, companies can generate genuine advantages by reducing costs, servicing customers more efficiently and creating brand value and customer loyalty These are areas where sustainability related activities can demonstrably and directly influence earnings and returns".
We may argue that it is highly unlikely that business school teachers can teach their students to be ethical. It is true that the job of teaching morality rests squarely on the shoulders of parents and one's early social environment. However, teaching ethics to the business leaders of tomorrow would compliment other societal pressures to be conscientious citizens.
The subject matter of business ethics reflects its mixed origins. In crude terms, it can be described as the union of business and society studies with mainstream business studies subjects through the medium of moral philosophy along with environmental issues relevant to business.
What results is attention to the ethical aspects of any and all the many different areas of business activity (accounting, marketing, human resource management, and so on), with the activity also examined in terms of the ethical dimension to the economic, legal, political, and environmental context in which it is carried out at both a local and global level. The range of topics this can cover is vast and varied. Moreover, new areas of study are constantly emerging in the wake of developments such as globalisation, e-commerce, and accounting scandals such as Enron.
Consequently no one course or textbook, no matter how comprehensive, can be expected to coer every topic. If, however, we examine textbooks and curriculum documents we find a great deal of congruence, with certain broad areas emerging as more or less standard. The least expensive way of executing business ethics is to develop, implement and monitor a 'code of ethics'.
A CODE OF ETHICS LARGELY DEALS WITH:
-- Compliance with the Law
--Payments by) and to the Company and its Employees
-- Conflict of interest
-- Service in Outside Organisations
-- Business information Protection
-- Fair Dealing
-- Insider Trading
-- Electronic Information
-- Political Contributions
-- Travel and Entertainment
-- Accounting Standards and Documentation
-- Protection and Proper Lse of Company Assets
-- Corporate Opportunities
-- Annual Reporting & Compliance to the Code of Ethics