Business Ethics

This ultimately allows other companies to make more sustainable design decisions and create lower impact products. Following the high-profile corporate scandals of companies like Enron, WorldCom and Tyco between 2001 and 2004, and following the passage of the Sarbanes–Oxley Act, many small and mid-sized companies also began to appoint ethics officers. The 1991 passing of the Federal Sentencing Guidelines for Organizations in 1991 was another factor in many companies appointing ethics/compliance officers. These guidelines, intended to assist judges with sentencing, set standards organizations must follow to obtain a reduction in sentence if they should be convicted of a federal offense. Mindeli and Pipiya argued that the knowledge economy is an economy of abundance because it relies on the “infinite potential” of knowledge and ideas rather than on the limited resources of natural resources, labor and capital. Kinsella claimed that IPR create artificial scarcity and reduce equality.

Some worry that firms engage in CPA in order to advance their own interests at the expense of their competitors’ or the public’s. This activity is sometimes described, and condemned, as “rent-seeking” (Jaworski 2014; Tullock 1989). Questions have been raised about the nature and value of rent-seeking.

The issue is not whether deceptive advertising is wrong , but what counts as deceptive advertising, and what makes it wrong. Emphasizing its informational component, some writers stress the positive value of advertising. Markets function efficiently only when certain conditions are met. Minimally, consumers have to understand the features of the products for sale. While this condition will never be fully met, advertising can help to ensure that it is met to a greater degree . Another value that can be promoted through advertising is autonomy.

Ethical issues include the rights and duties between a company and its employees, suppliers, customers and neighbors, its fiduciary responsibility to its shareholders. Issues concerning relations between different companies include hostile take-overs and industrial espionage. Business ethics refers to contemporary organizational standards, principles, sets of values and norms that govern the actions and behavior of an individual in the business organization. Business ethics have two dimensions, normative business ethics or descriptive business ethics. As a corporate practice and a career specialization, the field is primarily normative. Academics attempting to understand business behavior employ descriptive methods.

If the customer experienced bad service, the company will usually apologize and offer a discount or some other form of compensation. Both the nature of the company’s business and where the company is located can affect which ethics it emphasizes. In simplified models of the market, individual buyers and sellers are “price-takers”, not “price-makers”. That is, the prices of goods and services are set by the aggregate forces of supply and demand; no individual buys or sells a good for anything other than the market price. As the world continues to grow more political – and more politically correct – an increased focus on proper and strong adherence to them become ever more the norm.