To fully understand ethics and how they relate to business, it is first necessary to define its key components. Ethics can be divided into three categories: social, organizational and individual. Companies are bound by social ethics that challenge them to hold their corporate executives, management and stakeholders accountable for their actions, who aspire to profit from traditional and unconventional economic activities. Organizational ethics implies a common sense of pride and responsibility for employees, managers and companies. They are part of a general corporate philosophy shared throughout the company. Individual ethics involves our conceptions of right and wrong which derive from many different sources. Religious beliefs can often play a significant role in the ethical path that many choose to follow.
What drives a company to act ethically in business? What prevents companies from generating as much profit as possible, regardless of the ethical ramifications of their actions? The general public, as well as company stakeholders, expect companies to conduct business ethically and with the utmost consideration for social responsibility. When companies don’t meet these expectations, the end result often comes with punishment and harmful publicity. Companies that do business unethically run the risk of harming not only their stakeholders but also the general public. Companies that act ethically convey a sense of trust and responsibility in local and national communities; this type of trust can often foster strong business alliances.
Ethical problems come in many forms for many different reasons in the course of business. Unfortunately, companies often unwittingly hire people whose moral values are lower than those of a responsible citizen. These employees often place their greed and selfishness ahead of the well-being and safety of others, simply for their own financial gain.