For Research : Definition of Business Ethics and Ethical Issues

Business Ethics. Some researchers have mentioned different concepts of definitions of business ethics and social responsibility. It is confused because of the similarity of business ethics and social responsibility. According to Carroll (1989) “Pyramid of corporate social responsibility, it contains four elements. Philanthropic, ethical, legal, and economic are the factors in Carroll’s social responsibility structure (1989). In this study, we discuss business ethics as an entire research foundation. There are many definitions of business ethics, some of the most important are discussed below.

(1) Gandz and Hayes (1988) define business ethics as “the study of those decision of managers and corporate management which involve moral values (p.657).”

(2) Morris (2004) defines business ethics is a “definition of moral problem that does not use specifically moral terms i.e. good, bad, right, wrong, duty (p.347).”

(3) Carroll (1987) defines that business ethics is “An act, decision, or behavior is ethical if it is consonant (in agreement) with prevailing norms or standards of society (p.83).”

(4) Frederick, Post, and Davis (1992) define business ethics is the application of general ethical ideas to business behavior.

Ethics definition from dictionary is moral rules or principles of behaviors from deciding what is right and wrong. That means it is legal if firms ignore the ethics, but it is encouraged for firms to contribute more ethics. Code of ethics is explained as a set of moral rules. Ethics is the branch of philosophy that concerns morality – questions of right and wrong. Therefore, the contents of code of ethics could vary among different companies.

Ethical Issues. Many researchers have different perspectives in defining ethical issues. Carroll (1989) stated that ethical issues are questionable marketing and safety practices, sweatshop and labor abuse, and corruption, bribery and questionable payments. Sorell and Hendry (1994) mentioned that ethical issues are consumers’ protection, employees’ right, and obligations of shareholders. In this study, we will adopt Frederick’s (1991) ethical guidelines as ethical issues.

(1) Employment Practices

Ethical employment practices should include creation of non-discriminatory employment practices, respect for employees’ right to join unions, equal pay for equal work, favorable work conditions, reasonable work hours, advance notice of changes in operation, and adoption of adequate safety standards, etc (Frederick, 1991).

(2) Consumer Protection

Ethical corporations should implement consumer protection practices like respecting the host country law to protect the consumers, providing safe packaging, and safeguarding health of consumers through proper labeling and advertising, etc (Frederick, 1991).

(3) Environment Protection

An ethical firm should enforce environment protection such as respecting host-country law, preserving ecological balance, disclosing environmental harms, minimizing the risks of damaging environment, and protecting the environment (Frederick, 1991).

(4) Political Involvement

Recently, the survey shows that corruption is becoming an alarming issue in the U.S., Canada, and Australia (Berman & Webb, 2003). From the WorldCom and Enron incidents, investors and stakeholders start paying more attention on honesty of the corporate culture and ethics. Ethical behavior of corruption should contain avoiding illegal involvement in internal politics and refrain from paying bribes to public officials (Frederick, 1991).

(5) Basic Human Rights

Ethical practice for human rights usually include privacy, promotion of special care for childhood and motherhood, security of person, respect on the rights of people to life, and respect on the freedom of religion, opinion, and peaceful assembly, etc (Frederick, 1991).