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What are Ethical Business Practices?

By G. Wiesen
Updated May 16, 2024
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Ethical business practices are actions performed and attitudes held by a business and its employees that are considered professionally and morally responsible. These types of practices typically seek to promote the goals of the company without sacrificing the common good of its employees, customers, and even competitors. This often includes programs to ensure fair hiring and promotion within a company, treating customers fairly, and being honest in regard to programs to increase sales. Ethical practices are often initiated as a “top down” program, with corporate officers and the heads of the company acting as role models of behavior for other employees.

For many companies, ethical business practices do not have to disrupt the pursuit of profits and professional growth. There is often an incorrect assumption that a business should do anything to make money and get ahead, but many companies have been successful while still acting in a way that is ethical and serves the common good as well as the corporate good. These sorts of business practices can begin with programs that donate money to charities or other needy organizations, and extend to how customers and employees are treated by a company.

Many ethical business practices are related to how employees within a company are hired, treated, and promoted. This often includes policies that discourage discrimination, attempt to avoid issues regarding fraternization between different levels of employees, and seek to find fair ways to settle conflict within the company. These practices also often include ensuring employees are given reasonable working conditions, are treated with respect, and have any investments toward retirement protected appropriately.

These practices often include treating customers with respect and honesty, not using personal information provided by customers in unscrupulous ways, and charging customers fairly for goods or services. When these types of practices are not observed or are broken, many customers show their dissatisfaction by no longer giving the company their business.

One of the best ways to implement and ensure the proper establishment of ethical business practices is as a “top down” program. Those at the top of a company are often seen as professional role models for other employees, and if they are acting in a way that is unethical, many lower level employees will follow suit. This can lead to additional costs to a company due to theft, reduced productivity, and potential lawsuits. There may also be negative consequences for the value of a publicly traded company if the officers in charge of the company are unethical.

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Discussion Comments
By Scallaghan — On Oct 02, 2018

As a business communicator it would be my responsibility to make sure nobody is discriminated against. That is easier said than done, I know, but the goal is to stay on top of things and ensure the business runs ethically correct. I have worked in many a work environment where plenty of unethical things were going on. If you ‘brown nose” up to the boss, you seem to advance quicker than someone who works hard and doesn’t approach advancement in that way. I would consider that discrimination because it is unjust and unethical. I have seen people work longer hours and take more slack from the boss compared to the manipulative employee who is looking for an easy way out. In that situation, I would have a staff meeting and emphasize that everyone climbs up the same ladder, in the same form. Everyone puts in the hard work to advance in the company so if you don’t like the rules than this probably isn’t the right career for them. It is not fair for the other employees who bust their butts seeing people work their way up the chain just because they schmoozed up to the boss.

By Ivan83 — On May 15, 2012

I hear so many people suggest that corporations are evil and that they ruin the world with their unethical behavior. But look at all the good things that corporations do for the world.

Do you want to live in a world with no cars, no electric lights, no bananas in winter, no movies, no media at all? Businesses may not always act perfectly, but collectively they create the world, the staus quo, that is the bedrock of our security and our comfort. I don't care how radical you are, you cannot deny the comforts of the 21st century unless you live in a shack in the woods.

On a micro, ultimately inconsequential level, corporations may act unethically. But it is in the service of a higher goal. And that goal is to provide people with the world that they love. What could be more ethical than that?

By summing — On May 15, 2012
What would you consider an example of corporate ethics. Is it a company giving money to charity? Is it giving raises to their employees? Is it starting up some sort of grant organization to encourage others in the field? All of these are examples of positive behavior, but do they qualify the business as an ethical actor?

I guess what I am trying to point out is that someone can do one or two or ten good things but that does not make up for a lifetime of misdeeds. Many companies point to a few shining examples and try to suggest that this light reflects the whole company. Look at the way BP pats themselves on the back these days, as if the Gulf clean up was a charitable act.

By ZsaZsa56 — On May 14, 2012

Business ethics is a notoriously complicated field of study that seems to have far more grey in it than black and white. It is possible for businesses to act in an ethical way. It becomes complicated though because it is not ever necessary and in many cases it is discouraged.

Think about it in the most basic terms. Business is a competition and it has very real consequences and not a lot of rules. Business will do just about whatever it takes to get to the top or to stay on top. And if they act unethically there is often no punishment. So businesses practice a kind of shallow ethics, which is to say an ethics they they acknowledge only when it makes them look or feel good.

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