Ethics in Business World - Textbook Legal Environment of Business

According to the textbook Legal Environment of Business (Fifth edition of Palomar College) by Roger Leroy Miller / Frank B. Cross, ethics is are moral principles and values applied to social behavior. Business ethics are ethics in a business context; a consensus of what constitutes right or wrong behavior in the word of business and the application of moral principles to situations that arise in a business setting. The textbook also mentioned that business ethics is not a separate kind of ethics. The ethical standards that guide people's behavior as, say, mothers, fathers, or students apply equally well to people's activities as businesspersons. Business decision makers, though, must often address more complex ethical issues and conflicts in the workplace than they face in their personal lives.

Business ethics is really important. Ethics in business is necessary because business can become unethical, and there are plenty of evidences as in today on unethical corporate practices. Even Adam Smith, in whose name neo-liberal laissez-faire is advocated opined that "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public or in some contrivance to raise prices". A keen and in-depth understanding of business ethics is important to the long-run viability of a corporation. A thorough knowledge of business ethics is also important to the well-being if the individual officers and directors of the corporation, as well as to the welfare of the firm's employees and various "stakeholders" in the entity's well-being. Certainly, corporate decisions and activities can significantly affect not only those who own, operate, or work for the company but also such groups as suppliers, the community, and society as a whole. Business ethics applies to all businesses regardless of their organizational forms. In a business partnership, for example, partners owe a fiduciary duty (a duty of trust and loyalty) to each other and to their firm. This duty can sometimes conflict with what a partner sees as his or her own best interest. Partners who act solely in their own interests may violate their duties to the other partners and the firm, however. By violating this duty, they may end up paying steep penalties.