Role of Ethics in Corporations

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The Role of Ethics in Corporations Introduction

Corporates are the companies incorporated to carry out businesses in specific areas of their interest. They are governed by ethics which are more or less the codes of behavior that every company and company employee is expected to adhere to. In business it's the study and evaluation of business decision making based on moral concepts and judgments. (encyclopedia2.thefreedictionary, 2009) It's the study of principles relating right or wrong conduct (wiktionary, 2009) they are the standards that guide the conduct of persons in a profession. (Wiktionary, 2009). Nowadays corporations operate in a diversified world where globalization and enhanced government regulation has complicated ethical issues for businesses. Some ethics are formulated by the government and apply across the board while others are made to suit individual companies in their niches where they operate. An ethic is the chosen most appropriate way to behave as deemed by an individual. It's also a self chosen, logically based standard of mental behavior

What it involves

The market economy unlike the command economy that is so regulated is free and businesses are allowed to carry out their operations without many checks and balances. Profit is the main motive and this opens loopholes in the system which is bound to be utilized to commit illegal actions thus the need for ethics that will govern the corporate world. Business ethics are simply a system of moral principles applied in the commerce world. (Business Dictionary) It involves concerns that are critical to company success such as philosophy, morality environmental responsibility and protection of employees' rights. . (encyclopedia2.thefreedictionary, 2009). They are normally incorporated into company blue prints and in some case may form part of the mission, vision and core values of the organizations. Ethics in corporations identify and define the issues which maybe regarded as criminal or against the beliefs of many and frame them in such away that doing it will amount to violation of the law or code of conduct. They therefore attract punishment when committed, to act as a deterrent to future offenders and to ensure smooth running of the businesses.

Scope of corporate ethics

Apart from the above said categories of ethics, issues such as ethics of accounting, ethics of human resource, ethics of ethics of production and ethics of intellectual property knowledge and skill are also considered. (Wiki 2009 Corporate ethics encompass all the good so to say that must be the intention of all Corporates besides making profit. Corporates need to promote what is progressive and ethical. They should be based on broad principles of fairness, integrity and ones that are focusing on stake holder welfare, environmental sustainability and good welfare of employees (. Jon Entine, 1994). In addition it must cover the social attributes of human rights, sexual rights, animal rights and gender sensitivity (. Jon Entine, 1994).they also include corporate social responsibility, ethical issues relating to associations between different companies, leadership or corporate governance, level of involvement in politics by corporations and the misuse of office equipment. The rate at which the environment is being destroyed has caused alarm bells and the rush to conserve what is left. Companies have come up with programmes tailored in line with their values and nature of business to conserve the environment. Corporate social responsibility programmes that address environmental issues are geared towards the realization of a pollution free environment by the companies that engage in the kind business where environmental tampering is necessary. With every individual entitled to rights as enshrined in the constitution, ethics seek to enforce that. They define what and what not to do in terms of human rights. They ensure that nobody is forced to work in conditions which he/she deems as in conducive. Sexual harassment is very common in workplaces nowadays. Numerous corporations have come up with guidelines enforcing codes of conduct for employees as far as sexual harassment is concerned. Inappropriate dressing and making sexual advances towards colleagues and soliciting for sex in exchange for favors in workplaces is well covered in many corporate codes of conduct. There are guidelines put in place for to protect animals too. They work in the confines of animal rights which chiefly roots for experiments that minimize pain experienced by animals.

Role of ethics in business

Corporates are considered moral actors in their own right and must demonstrate responsibility in all matters that are relevant in the administration of people the environment and the production of goods. (Georges Enderle) As said earlier on, the role is to ensure the a peaceful and conducive workplace for all employees and the adherence to the laid down regulations which are meant to promote human rights, environmental sustainability, and the minimization of exploitation of customers by unscrupulous businesses. They provide acceptable guidelines for acceptable behavior in their strategy formulation and day to day operations (Business Dictionary). Ensuring that the people who work in these places work in humane conditions that promote the growth and development of human beings and minimize any form of stress that might make lead to the violation of their rights. By formulating ethics and enforcing them, people will be protected from the exploitation that is likely to be felt in the corporate world. Sectors like the insurance industry promote programmes that are sensitive to the issues affecting people like health. One of the principles they must exhibit is utmost good faith. Without clear ethical guidance such principles will be hard to come by given that human character is dynamic and unpredictable. Ensuring uniform standards and high standards for that matter is effected in part by ethics that exist in various organizations. When they are entrenched in company blue prints they become part and parcel of the culture of the organization hence the fostering of the beliefs that they are an irreplaceable part of a successful company. Fairness was hard to come by even in places where equality seems to have taken root. Because of the profit motive of the corporate world, unfairness is guaranteed to rise up. Price competition and other practices such as corporate espionage will surface to try and annihilate the opponent. Uniform ethics put in place work against such practices and assure industry players the security for business success and survival. Investor protection is a mandatory step that has to exist in every market economy. Investor funds are prone to abuse by uncouth managers who normally use the money for personal ventures. Laws enacted by acts of legislation address the ethics needed for the people who have to manage the sensitive customer investments in companies. Corporate espionage is rampant in the business world especially due to the decreased niche share that companies are experiencing and the completion that characterizes the modern world of business. The passing of sensitive information to competitors for monetary gain can be a serious setback to an organization. These ethics will work towards ensuring that company secrets are kept out of reach of those not supposed to access it. Ethics play a big part in checking the prevention of accounting frauds. Doctoring of figures, insider trading and acceptance of bribery and kickbacks are some of the accounting frauds addressed especially in the Sarbanes-Oxley act. It seeks to reinforce clean accounting processes that will save companies and investors their investments. Human resource ethics protect employees from various prejudices. Discriminating on the basis of gender, color or ethnicity, revelation of employees' private information and the formulation of fair employment contracts are some of the issues that HR ethics will address. They ensure their rights in as far as employees are concerned are enforced to make workplaces are worker friendly. Price fixation, and discrimination are common ethical lapses that have characterized sales and marketing departments and in various companies. Correct pricing will reduce exploitation brought by overcharging of clients which might lead to loss of potential clients. The apparent selected selling of particular classes of clients by sales teams can be met by lawsuits of people who will argue they have aright to equal access to goods and services. Besides it can lead to lose of the connection between company product and client which is so crucial to product market penetration. Cultivating a tradition of production of non defective goods which will avoid unnecessary recalls requires practicing some of the highly rated ethics. Corporate governance also depends on strong ethics that will ensure only the qualified are given the mantle to lead the organization. These principles of good governance ethics are integrity, accountability, transparency and performance orientation. (Na Boon Chong, 2008). The use of company equipment like telephones must subscribe to some etiquette sand rules that are defined within company ethics. They will save the company quite some money if reinforced and applied properly. Extravagance through carrying out personal tasks on company property may lead to incurring of huge costs.


Ethics are a necessary part in business and none can survive the repercussions created by their absence. Learning to stay with them and modifying them according to the prevailing situations whether long-term or otherwise is beneficial on the personal and business level. Many companies have collapsed due to the lapses that have been cased by their mangers and other employees. This can be avoided if management went out of their way to find out the opinion of their workers about the ethical practices put in place. (Rkandadai, 2008). Employees tend to learn from their superiors about corporate behavior that suits the company code of conduct. Ultimately therefore the top executives will influence the way attitudes are shaped toward existing company ethics and how the employees will perceive them. Organizations can do better by hiring corporate ethics enforcement officers who will be in charge of implementing the coded of conduct as stipulated in the organizations blueprint. Ethics will help strengthen human resources departments that are in charge of the administration of employees. The above said office will help HR deliver in the normalization and delivery of in terms of subscription to good ethics in the workplace.


1. Business ethics retrieved on 30th August 2009 from 2. Definition of Ethics, Morals, Virtue, and Quality,2008,Larry N G, retrieved on 30th August 2009 from 3. Corporate Ethics and Accountability Jon E, retrieved on 30th August 2009 from 4. THE ROLE OF CORPORATE ETHICS IN A MARKET ECONOMY AND CIVIL SOCIETY, GEORGES ENDERLE, retrieved on 30th August 2009 from 5. Business ethics, retrieved on 31August 2009 from 6. Corporate Ethics –Role of HR -Your Views!, 2008 retrieved on 31 August from 7. Corporate Ethics and Integrity, 2009, Na Boon Chong, retrieved on 31 August from

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Role of Ethics in Corporations. (2017, Jun 26). Retrieved June 20, 2024 , from

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