How do Ethics Affect Business?

What are ethical factors?

Ethical factors are put in place when a situation arises where a person has to choose between alternatives that must be evaluated as right (ethical) or wrong (unethical). Ethical factors are what influence individuals to make an ethical choice about the situation they are put in. One of the major factors that affect ethical choices and behavior are a person's knowledge, values, morals, and personality. Another major factor that affects a person's ethical choices and behavior are social factors such as cultural norms, the internet, and friends and family. These factors influence a person to make the most ethical decision they can make in a situation based off of their opinion of what they think is right or wrong.

An example of a company making an ethical decision based off of their ethical factors is when a company converts to fair trade. When a company becomes fair trade it means their practices, such as protecting workers rights throughout the supply chain and focusing on helping the disadvantaged workers, lines up their ethical factors. An example of their ethical factors in this situation could be their knowledge of unfair supply chains and the poor treatment of workers and producers in third world countries.

In a business environment what are some of the main ethical issues?

Business ethics are moral principles that guide the way a business behaves. Ethical issues vary from company to company in the business world. There are two aspects of an ethical issue; the problems that call for the need of ethical factors such as discrimination in the workplace and the rules that are put in place to prevent these problems such as accommodating diversity. Each business has the responsibility to develop codes of conduct and ethics that every member of their company must abide by and put into action when needed. Some of the most common ethical issue codes in a business include rules like accommodating diversity, empathetic decision-making, and compliance and governance consistent with a company’s moral principles. These codes help prevent further ethical issue problems that should arise.

Companies can strive to accommodate diversity by making sure they include people of all genders, races, physical abilities, and sexual orientations in their work force. Companies want to try to make sure they don't discriminate between anyone when they are hiring and working with all types of people. Empathetic decision-making is when a company or person feels it is important to think ahead to who their decisions are impacting (workers, suppliers, and customers). A company that is a good example of compliance and governance consistent with a company’s moral principles is Patagonia. Patagonia only works with other companies that abide by their moral principles. Earlier this year Patagonia made the decision to stop selling to corporate customers that don’t have ethics that line up with their own. The leaders of the companies decided that this was more important to the mission of the company to only work with others that complied with their visions then to make extra profit from corporate customers with different values.

How do ethical issues impact a business environment?

The ethical issue codes have an impact on how a business is run. Having these codes in place reinforces the importance of fairness and honest relationships with coworkers and customers. It also enforces rules about equality and empathy for all workers. These codes can change the way things are done within a company and can improve quality of the environment within a company. Behaving ethically and enforcing ethical issues can help your business to build customer loyalty, avoid legal problems, and attract and retain talented employees. The ethical issues that call for the need of ethical factors impact a business negatively. If workers speak out about the negative environment around them, they could make an impact on a company’s reputation and credibility. These ethical issues could change the satisfaction of the workers and the customers at a business. Customers may abandon a company because they are dismayed by their poor ethical practices and will find other products and services to meet their needs and will be difficult to win back.

How do business become ethically and socially responsible on a global level?

A business becomes ethically and socially responsible when it makes it a priority to pay attention to where their products come from, the working conditions of their workers, and if their ethics lines up with the company’s. If the other companies that a business trades with or buys products from does not comply with their ethical code, they cut them out of their supply chain and look for someone new. By doing this they are proving to their customers that they are ethical and a company to trust. This also means that a company may pay higher prices for their products and in exchange charge more, but it shows their values and morals are good.

A good example of this connects back to the example of Patagonia given above. Patagonia cut off corporate customers that don’t have ethics that line up with their own. They did this because it was more important to them to stick to the mission of the company than to make extra money. They also are considered ethically and socially responsible because they are a fair trade certified company. They are passionate that there workers are traded justly and that their working conditions are safe.