BUSINESS ETHICS What to Include in your Code of Ethics and Professional
Conduct?
SOLE PROPRIETORSHIP
also referred to as sole trader or a proprietorship, is
unincorporated business that has just one owner who pays
personal income tax on profits earned from the business.
This type business is easy to establish, no restrictions
provided it is legal and low cost on license and fees thus
this type of businesses are very popular among sole
owners of businesses.
PARTNERSHIP
It is a formal arrangement by two or more parties to
manage and operate a business and share its profits.
General partnership Each partner in a general partnership
is personally liable for all the debts and obligations of the
partnership.
Limited partnership A limited partnership must consist of
at least one general partner and one limited partner.
CORPORATION
It is a legal entity that is separate and distinct from its
owners.
It enjoys most of the rights and responsibilities that
individual posses. An important element of a corporation is
limited liability, which means that shareholders may take
part in the profits through dividends and stock
appreciation but are not personally liable for the
company’s debts. Corporations are not always for profit.
COOPERATIVE
Cooperatives are also based on the values of self-help, self-
responsibility, democracy, equality, equity, and solidarity.
Cooperative members believe in the ethical values of
honesty, openness, social responsibility, and caring for
others.
Code of ethics is broad, giving employees or members a
general idea of what types of behavior and decisions are
acceptable and encouraged at a business or organization.
Code of conduct is more focused. It defines how
employees or members should act in specific situations.
What are the three main categories or types of codes of
ethics?
Duties to clients and customers.
Duties to the public.
Duties to company.
1. The work environment
- Employees should act with integrity, comply with laws,
maintain a professional work environment and comply
with company policies. They should treat customers,
colleagues, and partners ethically at all times.
2. Conflicts of interest.
- A company's reputation depends on the actions and
integrity of its employees. It is essential that they avoid
relationships and activities that hurt, or appears to hurt,
their ability to make objective and fair decisions.
3. Protecting company assets.
- Employees should always act to protect company assets,
including physical, intellectual, and electronic or digital
properties.
4. Anti-bribery and corruption.
- A company's integrity is essential for maintaining
trustworthiness and reputation. Employees should always
do their work fairly, honestly, and legally.
5. Attendance and punctuality.
- Employees are expected to be regular and punctual in
attendance. This means being in the office, ready to work,
at starting time each day. Absenteeism and tardiness
burden other employees and the company.
6. Absence without notice.
- Employees who are unable to work due to illness or an
accident should notify their supervisor. This allows the
company to arrange for coverage of their duties and helps
others continue to work in their absence. If an employee
does a report for work and the company is not notified of
an employee's status for 3 days, it is typically considered a
job abandonment.
7. General harassment and sexual harassment.
- This company is committed to providing a work
environment free of discrimination and unlawful
harassment. Actions, words, jokes, or comments based on
an individual’s sex, race, ethnicity, age, religion, or any
other legally protected characteristic are not tolerated.
9. Dress Code.
- A professional appearance is important when employees
work with customers or potential customers. Employees
should be well groomed and dressed appropriately for the
business and for their position.
10. Substance abuse.
- The manufacture, distribution, possession, sale, or
purchase of controlled substances of abuse on company
property is prohibited. Being under the influence of illegal
drugs, alcohol, or substances of abuse on company
property is prohibited. Working while under the influence
of prescription drugs that impair performance is
prohibited.
11. Tobacco products.
- The use of tobacco products on company property,
outside of permitted areas, is specifically prohibited.
12. Internet use at work.
- Employees may use the Internet when appropriate to
access information needed to conduct a business company
business. Use of the Internet must not disrupt or injure the
company computer network. Use of the Internet must not
interfere with an employee's productivity.
Classical philosophy studies the fundamental problems
concerning human existence through the eyes of our
intellectual ancestors. Many thinkers from Classical times
were pioneers of our modern philosophical and scientific
ideas.
Business ethics can be understood as the study of
professional practices, i.e., as the study of the content,
development, enforcement, and effectiveness of the codes
of conduct designed to guide the actions of people
engaged in business activity.
Ethical theory provides reasons or norms for judging acts
to be right or wrong and attempts to give a justification.
MAJOR ETHICAL THEORIES AND THEIR INFLUENCE ON
BUSINESS PRACTICES
VIRTUE ETHICS
an ethical system in which the rightness/wrongness of an
action is determined by the character traits it expresses.
The exercise of these virtues:
Justice Prudence Wisdom
Loyalty Honor Courage
ARISTOTLE’S NICOMACHEAN VIRTUE ETHICS
There exists some ultimate good towards which all human
actions ultimately aim. This good toward which all human
actions aim is happiness, in Greek, "eudemonia," which
can also be translated as living well. Happiness is the
central purpose of human life and a goal in itself.
Happiness is achieved by leading a virtuous activity of the
rational soul. Virtue is equivalent to excellence.
CONFUCIAN VIRTUE ETHICS.
The locus of ethics and moral decision making was the
family rather than the individual. It is the family which is
the primary and most influential school of character, and
virtue. Confucian virtue emphasizes relationships, which is
founded on human heartedness, righteousness, propriety,
and wisdom.
UTILITARIAN ETHICS
also known as Consequential Ethics - an ethical system in
which the rightness/wrongness of an action is determined
by its consequences. Here, the ends could possibly justify
the means.
Here, the ends could possibly justify the means. – Morally
wrong actions are sometimes necessary to achieve morally
right outcomes; actions can be considered morally right or
wrong only by virtue of the morality of the outcome.
Jeremy Bentham et al.. The right action is the one that
promotes the greatest happiness of the greatest number
of people. It means that the moral quality of an action
should be judged by its consequences on human
happiness.
Cost-benefit analysis, in the business context, is a
utilitarian determination of what is to be gained and what
might be lost in any significant decision.
DUTY ETHICS
an ethical system in which the rightness/wrongness of an
action is determined by inherent features of the action
itself, or by an inherently valid rule. Here, the end does not
justify the means.
Immanuel Kant’s Categorical Imperative. He described his
concept of the categorical imperative as an “Act only
according to that maxim whereby you can, at the same
time, will that it should become a universal law.” If an
action is of the wrong kind, it is forbidden, no matter how
good its consequences are.
Kant’s Categorical Imperative, in the business context, The Buddhist business code and professional ethics are also
emphasizes the moral duty to act ethically and responsibly; closely tied to being environment-friendly. Buddhists
and to treat all business people as ends, never as merely pursue the “right livelihood” and are usually against
means businesses that do not really care for the environment or
harm animals. Essentially, according to Buddhist teachings,
BELIEF SYSTEM the principles of ethics and morals are governed by
examining an action that must avoid any harm.
Belief System – a belief system is an ideology or set of
Hinduism
principles that help us to interpret our everyday reality. This
Hindus believe in one true, formless, boundless, all-
could be in a form of religion, political affiliation,
inclusive and eternal God called Brahman. He is not an
philosophy, or spirituality, among many other things. These
abstract concept but a real entity that everything in the
beliefs are shaped and influenced by several different
universe (seen or unseen) encompasses.
factors.
Hinduism is an organized religion, and its value system has
Itadakimasu and Gochisosama – in the Japanese business
no single, systematic approach to teaching nor do Hindus
world, it’s customary to regularly go out for food and
have a simple set of rules, like the Ten Commandments to
drinks after work. Similarly, when eating it is customary to
follow.
say “itadakimasu” before starting and “gochisosama” after
Hindus have a positive attitude towards business and
finishing. These words show thanks to the people preparing
wealth creation, yet wealth is not the ultimate goal. What is
or paying for the meal, and tradition dictates that all
more important are ethics (Dharma) and Salvation
members of the party say these phrases. This custom is
(Moksha).
extremely important and is derived from Buddhism
SHINTOISM
Christianity
The main beliefs of Shinto are the importance of purity,
The Christian religion follows the Hebrew bible by taking a
harmony, respect for nature, family respect, and
positive view of physical and human creation and by seeing
subordination of the individual before the group.
God as deeply concerned with the ethical behavior of
Shinto is to promote harmony and purity in all aspects of
human creatures towards one another.
life.
Christians should be transparent and honest with their
There are four affirmations in Shinto: tradition and
dealings, products and services. They should not push to
family, love of nature, physical cleanliness, and
buy goods and services because it does not reflect the heart
matsuri (festivals in which worship and honor is given to
of the Father, but that of mammon’s (material wealth and
the kami).
possessions especially as having a debasing influence).
"Shinto gods" are called kami.
Judaism
Japan is known for having a traditional, formal, and very
Jews believe there is one God, who not only created the
ritualistic approach to conducting business which demands
world, but who every Jew should have an intimate and
a focus on detail, consensus building and a conservative
interpersonal relationship with. They believe that God
outward manner.
works continuously in the world and affects all the people
do. Further, there is a covenant relationship between God
and the Jews in exchange for the many good deeds God has
done for the Jewish people and continues to do. The Japanese negotiating style tends to be impersonal and
Honesty on the market. It is illegal for traders to falsify unemotional, but at the same time, they want to know, like
the weight and measurement of the goods or products. and trust the people they are doing business with – try to
Fair pricing. There should be good value for money approach the negotiation with a mix of facts and statistics
The Talmud (comprehensive written version of oral laws as well as personality and warmth.
of the Jews) cares much about price control.
The Japanese workplaces focus on the group. During the
Islam hiring process, a lot of companies give less priority to skill
Muslims believe in the oneness of God – that all things are sets and specialization. Instead, they see if the individual is
created by God and that he is all-powerful and all-knowing. culturally fit or not. This is because Japanese companies
They further believe that God has no offspring, gender, want employees that can perform well in a group for a good
class, body and he is not affected by human life’s amount of time.
characteristics.
CONFUCIONISM
Buddhism Confucian values were applicable to positive interpersonal
Founded on the teachings of Siddhartha Gautama, who is relations in business practice and in the workplace, in
called “Buddha” pr “the enlightened one”.
regards to successful human resource management in
particular.

These values included: trustworthiness, Ren

(compassion, humanness), Li (ritual, etiquette),
harmony and tolerance of others.

The modern Confucian business person applies the

Confucian principles of benevolence (ren), rightness (yi),
propriety (li), wisdom (zhi), and trustworthiness (xin) to
their business practice.

The “Golden Rule” in History

Confucius' (500 BCE) ethical principle of reciprocity is
well-known in Chinese tradition: Is there a single phrase
that can be followed as a practical guide for one's entire
life? Isn't RECIPROCITY such a term, the Master
asked. Don't do to others what you wouldn't want to be
done to you.”