What Affects Business Ethics?

Factors affecting business ethics

The business executive working as a professional manager has to decide what is ethical or unethical. Many factors influence this decision. In part, what is ethical is based on:

What affects business ethics

Image: What affects business ethics?

1. The individual’s personal code of behavior: The personal Code of Behavior is the result of the complex environment that influences one’s life.

2. The ethical standards imposed on a manager by his superiors also influence him in his decisions as to the morality of behavior. If the superior condones unethical activities such as padding expenses accounts, the subordinate is encouraged to look upon this activity as an acceptable practice.

3. The policies of the company also influence the determination of ethical conduct. Standards of behavior in an industry are often influenced greatly by the dominant firms in that industry. The authors of the company policy obviously have an effect that is decisive.

Garrett puts this idea when he says:

“The best protection is the example presented by the conduct of top management and the atmosphere it creates, when leaders are scrupulous, the employees know what is considered right. When example is supported by explicit policy, the followers have a clear idea of how to translate the example of leaders into action. When policy is enforced and enforcement reinforced, the employees know that honesty is the best policy in this company”.

4. The ethical climate of a country. If, it is poor, then only giant corporations and large undertakings can stand competition and be viable; a small concern is apt to go bankrupt, since business is concerned with employment of a large number of persons, it has the obligation to see that it adheres to an ethical atmosphere. However, considerable differences occur among managers as to what is ethical or unethical; and business truly lacks a Code of Ethics.