Business Ethics - A Practical Approach

Ethics and morality are viewed very differently by different people. Many believe that morality is something mandated by God or gods. How do we determine what is right and wrong in general? One might think this is an easy question to answer. Others can see great complexity in the subject. Ethics are generally considered as being derived from morality.

So, what is morality? The generally taken definition for morality is 'being in accordance with the standards of conduct as determined by the society or system of ideas called into question'. Another definition would be 'that which is good for the person or society'. Most societies would agree that it is moral to give to the poor and it is immoral to steal from your neighbor.

As far as business ethics are concerned, how does one determine what is ethical and what is not? Many books have been written on the subject but who or what has the authority to dictate to us what is ethical and what is not? On what grounds are we to obey the 'ethical standard' and for that matter, what 'ethical standard' are we to adhere to?

This article presents a purely practical viewpoint on business ethics. First off, we will define business ethics as 'that which is best for the business in question'.

With this definition in mind, if it is 'best' for a business to steal or even commit murder then it is entirely ethical for the business to do so. That narrows the question down to 'what really is best for the business?'.

Not too long ago I ran into a potential business partner. We agreed that he would provide a certain service (computer installation & networking) to a customer of mine on my behalf. I would bill my client and then pay him his portion of the bill (which was about 85% of the total). When he got to the client he convinced the client that they should deal with him directly and not pay me a 'cut' for doing nothing. He did the work for them, took the client from me and payed me nothing.

According to our definition was this ethical for him? He afterall obtained a new client outright and ended up not having to pay anyone any part of the total profit.

Well, I provide computer networking services to clients all the time. I always sub-contract the work out to another company. What do you suppose the chances are that I will *ever* send this person to any of my clients again? In fact I have direct competitors who I am in continual contact with. We always share our resources. That is, if my competitor-friend needs a network engineer and I know a good one, I refer him to them. What do you suppose the chances are that I will ever recommend this person to anyone. In fact I continually tell anyone looking for network engineers *not* to use this person because he as no 'business ethics'. I tell them that he will 'steal' their client.

The point is that the concept of business ethics is real, and is generally what we all think it is, but also that practically speaking, it really is 'that which is in the company's best interest'. That network engineer did successfully steal a client from me but he lost an awful lot of work, badly tainted his company's reputation in the market place and made a permanent business enemy in the process.

These days large businesses take business ethics *very* seriously. Understand that large corporations do *exclusively* what is in their best interest. Nevertheless, many of them are doing what will actually hurt their bottom line in the interest of adhering to strong business ethics.

For example: Philip Morris is a major cigarette manufacturing company. However, if you log onto their Website, you will see on their home page, information about health problems caused by cigarette smoking and even a link to a Website that will help you quit smoking. The question is, why is Philip Morris doing this? How can it be in their best interest? We can pretty much agree that smoking cigarettes is harmful to our health, drives up our insurance rates and pollutes our air so we can agree (by our definition above) that smoking cigarettes is immoral for our *society*. But, is it moral, or ethical (according to our definition above) for Philip Morris to dissuade people from smoking? After all, they sell cigarettes!

Our society in general has determined that smoking cigarettes is harmful to us all. Organizations are pressuring government, business and society in general to deter our people from the practice of smoking. One might project that cigarette smoking may become less and less popular in the future. Companies that persist in promoting things that are obviously not good for our society are generally seen in a bad light by society. Philip Morris appears to be working toward restructuring their business to better serve the needs of our society rather than continuing to harm us. I would be interested to see how Philip Morris fares 20 years in the future compared to their competitors, for example R.J. Reynolds who are apparantly still quite adamant about promoting the practice of cigarette smoking.

Benevolence is defind as 'being kind to others; giving 'selflessly'. If I give money to the poor they get money and I lose money. According to our definition above, you could construe that giving to the poor is an immoral act. But, when we give to the poor we accomplish many things for our society as a whole. Taxes can come down. More people in our society can become productive, thereby contributing to our overall well being rather than taking from it. We personally feel a certain 'joy of giving' which lifts our morale and alleviates stress. We gain potential allies in both the people we help directly and others who see value in our benevolent acts. In general, by feeding the poor we help society as a whole. That makes our society a better place for us and our children to live.

If businesses spend large amounts of money on general education they lose money. However, the overall population becomes more educated. That means the companies find them easier to communicate with (advertise to) and the people they hire are better equipped to do their jobs. Problems that could devastate a society (and destroy business) are much less likely to occur because the people are better equipped to predict ensuing disaster and alleviate it.

The point is, a healthier, happier society in general is good for each member of that society. This principle goes for businesses as well as individuals. Bear in mind that business is created and operated exclusively for the benefit of individual people. That is, all business is made up of and for people. If a business worked at polluting the World to a point where the World would *definitely* cease to sustain life within 5 years, that business would *definitely* cease to continue doing business (or dramatically change it) because the *people* running the business would not want to die.

Granted, the debate on whether or not being ethical or moral is a requirement for being successful is thousands of years old and continues to rage on.

This article only addresses the origins and authority of 'business ethics' and whether or not it has any practical place in the business World.

Business ethics does have a practical place in business. It is not some abstract unattainable concept handed down by God that has no practical value to man. A Christian on her toes might conclude that the study of morality & ethics is tantamount to the acquisition of the knowledge of good and evil. The concept at its root is simple. Help me and I'll be inclined to help you. Hit me and I'll be inclined to hit you. Of course when you add 8 billion people to the equation the logistics of it become quite complex.

Ethics, business ethics included is simply that which makes us happier, healthier and lets us live longer.

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Marl K. Atkins is an Internet marketing consultant specializing in the promotion of small to medium sized businesses.
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