In order to fully understand ethics and how they relate to business, one must first define its key components. Ethics can be broken down into three categories: social, organizational, and individual. Corporations are bound by social ethics which challenge them to hold accountable for their own actions its company officers, management, and stakeholders, who aspire to gain financially from traditional and unconventional economic activities. Organizational ethics involve a shared sense of pride and responsibility for employees, managers and corporations. They are part of an overall business philosophy that is shared throughout the company. Individual ethics involve our conceptions of right and wrong which stem from many different sources. Religious beliefs can often play a significant role in the ethical path many choose to follow.
What prompts a company to act ethically in business? What prevents businesses from generating as much profit as possible, regardless of the ethical ramifications of their actions? The general public, as well as company stakeholders, have come to expect that corporations will conduct business ethically and with the highest regard for social accountability. When companies fall short of these expectations, the end result often involves punishment and harmful publicity. Companies which conduct business in an unethical manner run the risk of harming not only its stakeholders, but also the general public. Companies that act ethically impart a sense of trust and responsibility in both local and national communities; this type of trust can often promote strong business alliances.
Ethics problems occur in many forms for many different reasons during the course of business. Unfortunately, companies often unwittingly employ people whose moral values are less than that of a responsible corporate citizen. These employees often put their own greed and selfishness ahead of the welfare and safety of others, simply for their own financial gain.