Business ethics

Business ethics is the application of theories of right and wrong to activity within and between commercial enterprises, and between commercial enterprises and their broader environment. It is a wide range of activity, and no brief list can be made of the issues it raises. The safety of working practices; the fairness of recruitment; the transparency of financial accounting; the promptness of payments to suppliers; the degree of permissible aggression between competitors: all come within the range of the subject. So do relations between businesses and consumers, local communities, national governments and ecosystems. Many, but not all, of these issues can be understood to bear on distinct, recognized groups with their own stakes in a business: employees, shareholders, consumers, and so on. The literature of business ethics tends to concentrate on ‘stakeholders’ – anyone who occupies a role within the business or who belongs to a recognized group outside the business that is affected by its activity – but not in every sort of business. Corporations are often discussed to the exclusion of medium-sized and small enterprises.

Theories of right and wrong in business ethics come from a number of sources. Academic moral philosophy has contributed utilitarianism, Kantianism and Aristotelianism, as well as egoism and social contract theory. There are also theories that originate in organized religion, in the manifestos of political activists, in the thoughts of certain tycoons with an interest in social engineering, and in the writings of management ‘gurus’. Recently, business ethics has been affected by the ending of the Cold War, and the breakdown of what were once command economies. These developments have encouraged enthusiasts for the market economy to advocate moral and political ideas consistent with capitalism, and the handing over to private companies of activity in certain countries that has long been reserved for the state.