Q.Explain the various elements of business ethics.

• Top management commitment — the CEO and senior managers must be openly and strongly committed to ethical conduct.
• Publication of a 'code' — a written document defining principles of conduct for the whole organisation.
• Compliance mechanisms — systems in recruiting, training, auditing and reporting to ensure actions match ethical standards.
• Involving employees at all levels — since employees implement ethics policies, their involvement is a must. …

Why the elements matter

• Because ethical business behaviour benefits both the enterprise and society, it is worth knowing how enterprises can foster ethics in their everyday working. The basic elements are the practical means of doing so.

The five elements

• (i) Top management commitment: Top management has a crucial role in guiding the whole organisation towards ethically upright behaviour. The CEO and other senior managers must be openly and strongly committed to ethical conduct, providing continuous leadership to develop and uphold the organisation's values.
• (ii) Publication of a 'code': Enterprises with effective ethics programmes define the principles of conduct for the whole organisation in a written document called a 'code'. A code typically covers: fundamental honesty and adherence to laws; product safety and quality; health and safety in the workplace; conflicts of interest; employment practices; fairness in selling and marketing; and financial reporting.
• (iii) Establishment of compliance mechanisms: Suitable mechanisms ensure that actual decisions and actions comply with the firm's ethical standards — paying attention to values in recruiting and hiring, emphasising ethics in training, auditing performance regularly to check compliance, and setting up communication systems through which employees can report unethical behaviour. …