Meaning and Concept of Business Ethics

Business ethics refers to the application of general ethical principles — standards of right and wrong conduct — to business decisions, behaviour and relationships. It is concerned with questions such as: is this advertisement honest? is this way of treating an employee fair? is this dealing with a supplier or competitor conducted in good faith? Business ethics goes beyond mere legal compliance: an action can be perfectly legal and still be regarded as unethical (for example, technically legal but deliberately misleading fine print in a contract), just as an action can occasionally be illegal in one jurisdiction yet be seen as ethically defensible elsewhere — the two ideas overlap heavily but are not identical.

The need for a distinct study of business ethics arises because business decisions routinely involve genuine conflicts of interest — between a business's own profit and a customer's, an employee's, a competitor's, or society's interest — and law alone cannot anticipate or resolve every such conflict in advance. Ethics supplies the standard by which a business is expected to resolve these conflicts fairly even where no specific law dictates the outcome.

Business ethics is not a single fixed code; it draws on widely shared values such as honesty, fairness, integrity, transparency, and respect for the legitimate interests of all those affected by a business decision — values that hold both within a single organisation's own internal culture and in the way that organisation deals with the outside world.