What is Business Ethics?
Business ethics is the study of how businesses can ethically improve society, and how people ought to act when participating in business.
Business ethics is a broad subject that includes topics like trade, effective altruism, incentives for good behavior, psychology of market actors, exploitation, commodification, and employee compensation.
The scholars at our institute explain that: “Primary business ethics is about how you make your money. Do you make money in an honest, fair, and open way, free of coercion and exploitation? Does your product or service create value for your customers, without forcing third parties to bear your cost?” (Business Ethics for Better Behavior (Oxford Univ. Press, 2022, page 15)
Business ethics is not a list of platitudes about “doing good.”
Business ethics is not the same thing as the law.
Business ethics is not a campaign to signal the virtues of a company.
Finally, CSR is not business ethics.
“Corporate social responsibility (CSR) largely focuses on what issues of causes business support and what businesses do with the money they’ve made. Do they reinvest or distribute all their profits, or do they donate some of it to charitable or political causes”
“The basic idea behind CSR is that companies ought to “give back” to society – usually by donating some of their profits to various social, environmental, and political causes.”
“But let’s be clear – CSR may be part of ethics, but it is not the whole of ethics. Nor is it the most fundamental part of business ethics. It is at best a secondary consideration. A business can have a wonderful CSR program and still be deeply unethical. CSR does not compensate for dishonesty, fraud, corruption of predation.”
Business Ethics for Better Behavior, Oxford Univ. Press, 2022, page 15
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