Business Ethics

Why ethics enters the picture: From society's point of view, business exists to supply goods and services to people; from the individual firm's point of view, its primary objective is to earn profit. One might expect these two goals not to conflict — but businesses are run by human beings whose decisions and actions are not always in line with society's expectations. An enterprise may perform well economically (in revenue, costs and profits) yet perform poorly socially (in supplying reasonable-quality products at reasonable prices). This raises the question of what is right or wrong from society's point of view.

The question matters because business enterprises are products of, and influenced by, society; they must interpret and adjust to society's preferences and values. The subject matter of ethics is exactly this — establishing the link between individual good and social good. The sub-sections that follow explain the concept of business ethics and its basic elements.

Environmental protection in India — steps by the government (informational box): The Directive Principles of State Policy in the Constitution emphasise protecting the environment. The government has acted through:

• 1. Laws, including: the Wildlife Protection Act, 1972; the Water (Prevention and Control of Pollution) Act, 1974 (amended 1974 and 1988); the Air (Prevention and Control of Pollution) Act, 1974 (amended 1974 and 1988); the Environment (Protection) Act, 1986; the Forests (Conservation) Act, 1980 (amended 1988); and the Hazardous Wastes Act, 1989.
• 2. Regulations — administrative orders and policy guidelines; a separate Department of Environment was created in 1980.
• 3. Regulatory / quasi-judicial bodies, such as the National Afforestation and Eco-development Board and the National Wastelands Development Board. …