Ethical business practices are conduct standards related to moral judgments applicable to people engaged in commerce related positions (Gitman, 2012). Unethical behavior where people deliberately intend to harm themselves or others, develops from and is reinforced by, destructive states of mind, including fear, greed, anger and jealously. For example, many businesses are now feeling a social responsibility to cut back on their pollution in the environment.
There are so-called professional ethics, and in particular – business ethics, which includes standards of entrepreneur behavior. I have been involved with several business bankruptcies and none of the owners or employees of these companies felt anything but shame and failure for having left suppliers with debt, employees without a job and customers without a supplier.
An organizational ethics policy is an announcement to the employees, the customer base and the community as a whole that the business is prepared to conduct itself and its practices on an ethical level. Ethics is about how we live in the present to prepare for the future, and a business without profits (or a plan to create them) is not meeting its ethical obligations to prepare for the future well-being of the company, its employees and customers.
Some management guru stressed that ethical companies have an advantage over their competitors. And when it comes to business ethics, the same thing applies, because some businesses have great ethics while others have poor. Ethical businesses are well-run, well-managed, have effective internal controls, and clear expectations of growth.
However, when each manager and employee understands the organization’s priorities and has specific information about how they contribute to them, and those contributions are directly aligned with related contributions firms, can achieve improved teamwork and performance.