Ethics

Business ethics has been an area of growing concern across the world in the last decade. While

considerable thought has gone into the effective management of business and ensuring its

steady growth across industries and economies, the role of ethics or moral obligations till recently

was more of a theoretical exercise in the academic circles. Corporate involvement in social obligations

remained largely limited to allocate a part of the annual budget for philanthropic work. However,

recent allegations of fraudulent practices, misappropriation of funds and willful suppression of facts

against some of the major transnationals in the world have made it necessary to understand the

fundamental role of business ethics. This article tries to capture the broad impact ethics on business

and how they can be incorporated in the policy guidelines of different stakeholder organizations to

ensure more transparent and profitable operations.

Business ethics can be described as business behavior based on standards of right or wrong rather

than entirely on principles of accounting and management (Hartman 1998). We can say it encompasses

practices and policies in business to determine what is ethically right and wrong.

What is ethically right and wrong in a given business situation depends on individual and corporate

value system and the choice made thereof. The cultural, organizational and industrial environment

along with personal experiences determines this choice. Due to its fundamental qualitative nature,

business ethics means different things to different people. Thus, though there is a general agreement

on the need of ethical standards in business, a consensus on specific standards is difficult to achieve.

This difficulty arises from the fact that standards of ethics are influenced by