Business ethics refers to
the application of general ethical
principles and standards to
business behavior.
Business actions are judged by
the general ethical standards of
society, not by a special set of
more permissive standards.
The school of ethical universalismholds that human nature is
the same everywhere and thus
that ethical rules are crosscultural;
the school of ethical
relativism holds that different
societal cultures and customs
give rise to divergent values
and ethical principles of right
and wrong.
Managers in multinational enterprises
have to figure out how
to navigate the gray zone that
arises when operating in two
cultures with two sets of ethics.
The notion of social responsibility
as it applies to businesses
concerns a company's duty to
operate by means that avoid
harm to stakeholders and the
environment and, further, to
consider the overall betterment
of society in its decisions and
actions.
More attention is paid to linking
strategy with ethical principles
and core values in companies
headed by moral executives
and in companies where ethical
principles and core values
are a way of life.
Business leaders who want
their companies to be regarded
as exemplary corporate citizens
must not only see that their
companies operate ethically but
also display a social conscience
in decisions that affect
employees, the environment,
the communities in which they
operate, and society at large.
A company's social responsibility
strategy is defined by the
specific combination of socially
beneficial activities it opts to
support with its contributions of
time, money, and other
resources.
Each company's strategic efforts
to operate in a socially responsible
manner should be
custom-tailored, matched to its
core values and business mission,
thereby representing its
own statement about "how we
do business and how we intend
to fulfill our duties to all stakeholders
and society at large."
Every action a company takes
can be interpreted as a statement
of what the company
stands for.
The higher the public profile of
a company or brand, the
greater the scrutiny of its activities
and the higher the potential
for it to become a target for
pressure group action.
