The system of moral and ethical beliefs that guides the values, behaviors and decisions of a business organization and the individuals within that organization is known as business ethics. Some ethical requirements for businesses are codified into law; environmental regulations, the minimum wage, and restrictions against insider trading and collusion are all examples of the government setting forth minimum standards for business ethics. Beyond the general framework of the law, however, business ethics vary from company to company, with management philosophy playing a large role in determining the ethical tenets a business chooses to adopt. Business ethics also differ from industry to industry. For example, ethical concerns for energy companies frequently relate to their stewardship of the environment, while technology companies contend with ethical issues in the realm of security and privacy.
The nature of a business’s operations has a major influence on the ethical issues with which it must contend. For example, an ethical quandary arises for an investment brokerage when the best decision for a client and his or her money does not coincide with what pays the brokerage the highest commission. A media company that produces TV content aimed at children may feel an ethical obligation to promote good values and eschew off-color material in its programming.
A striking example of industry-specific business ethics is in the energy field. Companies that produce energy, particularly nonrenewable energy, face unrelenting scrutiny on how they treat the environment. One misstep – whether it is a minor coal spill at a power plant or a major disaster such as the 2010 BP oil spill – forces a company to answer to numerous regulatory bodies and society at large regarding whether it skirted its duty to protect the environment in an aggressive pursuit of higher profits. A stringent, clearly defined system of environmental ethics is paramount for an energy company if it wants to thrive in a climate of increased regulations and public awareness on environmental issues.
Companies, such as Amazon and Google, that conduct most of their operations online are not scrutinized for their environmental impact the way energy companies such as BP and Exxon are. When it comes to protecting their customers’ privacy and security, however, their ethics are examined very closely. A particular area in which technology companies must make tough ethical decisions is marketing. Advancements in data mining technology enable businesses to track their customers’ movements online and then sell that data to marketing companies or use it to match customers with advertising promotions. Many people view this type of activity as Orwellian and a major invasion of privacy; however, such customer data is invaluable to businesses, as they can use it to increase profits substantially. Thus, an ethical dilemma is born: To what extent is it appropriate to spy on customers’ online lives to gain a marketing advantage?
