Business Ethics - Code of Ethics in Business

What do we know when we hear the word ‘ethics’? Do we moan and groan and say here comes another lecture on right and wrong? Some think along these lines… where the topic of ethics makes us run a mile away, and then there are those who think they are the moral police themselves.

We are not talking about morals and ethics here, but rather we are discussing business ethics or the code of ethics in a business place.

Introduction to Ethics

Before I start off talking about business ethics and the code of ethics, lets understand what ethics really are. The word "ethics" has been derived from the Greek word "ethos" which means conduct, customs or character. Now lets ponder up on this for a while…ethics according to the Greeks would mean a code of conduct, the manner of customs and the characterization of a person’s morals. It would also mean in a positive way the accepting of responsibilities.

A lot of people talk about right and wrong, the acceptable and unacceptable and principles and protocol, all this pertains to ethics. So while we are here, lets start off with business ethics. Every business or every entrepreneur has to have some framework for their code of conduct for a business; this would essentially be the guidelines within which a business can conduct certain activities.

Scope for business ethics

The framework has to be outlined before the business activity starts.

• Criminal behavior and legal framework – every business needs to have a code of ethics pertaining to criminal behavior and legal issues. The employees in a business need to be trained sufficiently regarding legalities of the business and the consequences their actions would have upon them and the business.
• Human values and personal behavior – every business needs to have an ethical framework or policy for human values and behavior. Employees
  should be given training on how to interact with different people, be it customer, suppliers or competitors. They need to be aware of how they are expected to behave with people at different levels and that inappropriate behavior will have consequences.
• Corporate and business ethics – though we are discussing business ethics, this strictly pertains to the corporate ethics, ethical policies for business and actions that are going to be under check and need to be in compliance with legal framework and standards.

Individual behavior with regards to code of ethics in business

It is very important to understand that each person has his or her own impression of ethics. What may be wrong for one person may be right for another and vice versa. People are individuals and their views and ethics cannot be changed overnight or even with a fortnight. Each person has grown up with a particular cultural background and their own understanding of right and wrong. From a businessman’s point of view, it is important to gauge a person’s understanding of ethics before hiring that person to work for you. You need to understand if their sense of ethics is in compliance with you and your business. Social factors also play and important part and so does education and up bringing.

It is important that before a person starts working for you, they are inducted into the business. This induction period is of importance as it is at this time that the person can be introduced to your ethics and your business ethics. This is the time when he is introduced to what is right and what is wrong for your business, and what is ethical and what is unethical from your business stand point.

At the end of it all, remember that ethics have a lot to do with perception, which can be modified but never completely changed.