Editing Business ethics (section)

==Overview==
Business ethics reflects the [[philosophy of business]], of which one aim is to determine the fundamental purposes of a company. Business purpose expresses the company's reason for existing. Modern discussion on the purpose of business has been freshened by views from thinkers such as Richard R. Ellesworth,<ref name=":02">{{Cite book|last=Ellsworth|first=Richard R.|url=https://www.worldcat.org/oclc/49775350|title=Leading with purpose : the new corporate realities|date=2002|publisher=Stanford Business Books|isbn=0-8047-4385-1|location=Stanford|oclc=49775350}}</ref> [[Peter Drucker]],<ref name=":1">{{Cite book |last=Drucker |first=Peter F. |url=https://www.worldcat.org/oclc/701417 |title=Business Purpose and Business Mission, in "Management: tasks, responsibilities, practices" |publisher=Harper & Row |year=1985 |isbn=978-0060110925 |edition=1st |location=New York |pages=74–94 |chapter=7 |oclc=701417}}</ref> and [[Nikos Mourkogiannis]]:<ref name=":2">{{Cite book|last=Mourkogiannis|first=Nikos|url=https://www.worldcat.org/oclc/70676637|title=Purpose : the starting point of great companies|date=2006|publisher=Palgrave|isbn=1-4039-7581-7|edition=1st|location=New York|oclc=70676637}}</ref> Earlier views such as Milton Friedman's held that the purpose of a business organization is to make a profit for shareholders.<ref>{{Cite news |date=1970-09-13 |title=A Friedman doctrine-- The Social Responsibility of Business Is to Increase Its Profits (Published 1970) |work=The New York Times |language=en |url=https://www.nytimes.com/1970/09/13/archives/a-friedman-doctrine-the-social-responsibility-of-business-is-to.html |access-date=2023-08-17 |last1=Friedman |first1=Milton }}</ref> Nevertheless, the purpose of maximizing shareholder's wealth often "fails to energize employees". In practice, many non-shareholders also benefit from a firm's economic activity, among them employees through contractual compensation and its broader impact, consumers by the tangible or non-tangible value derived from their purchase choices; society as a whole through taxation and/or the company's involvement in social action when it occurs.<ref name=":02" /><ref name=":1" /><ref name=":2" /> On the other hand, if a company's purpose is to maximize shareholder returns, then sacrificing profits for other concerns is a violation of its [[fiduciary responsibility]]. Corporate entities are legal persons but this does not mean they are legally entitled to all of the rights and liabilities as natural persons.

Ethics are the rules or standards that govern our decisions on a daily basis. Many consider "ethics" with conscience or a simplistic sense of "right" and "wrong". Others would say that ethics is an internal code that governs an individual's conduct, ingrained into each person by family, faith, tradition, community, laws, and personal mores. Corporations and professional organizations, particularly licensing boards, generally will have a written [[code of ethics]] that governs standards of professional conduct expected of all in the field.
It is important to note that "law" and "ethics" are not synonymous, nor are the "legal" and "ethical" courses of action in a given situation necessarily the same. Statutes and regulations passed by legislative bodies and administrative boards set forth the "law". Slavery once was legal in the US, but one certainly would not say enslaving another was an "ethical" act.

Economist [[Milton Friedman]] wrote that corporate executives' "responsibility&nbsp;... generally will be to make as much money as possible while conforming to their basic rules of the society, both those embodied in law and those embodied in ethical custom".<ref name=mf1970>{{cite news|first=Milton|last=Friedman|title=The Social Responsibility of Business is to Increase Its Profits |date=1970-09-13|work=[[The New York Times Magazine]] |access-date=March 11, 2011 |url=http://www-rohan.sdsu.edu/faculty/dunnweb/rprnts.friedman.html |url-status=dead |archive-url=https://web.archive.org/web/20110317042848/http://www-rohan.sdsu.edu/faculty/dunnweb/rprnts.friedman.html |archive-date=March 17, 2011 }}</ref> Friedman also said, "the only entities who can have responsibilities are individuals&nbsp;... A business cannot have responsibilities. So the question is, do corporate executives, provided they stay within the law, have responsibilities in their business activities other than to make as much money for their stockholders as possible? And my answer to that is, no, they do not."<ref name=mf1970/><ref>Friedman, M. (1984). "Milton Friedman responds—an interview with Friedman." Business and Society 84(5)</ref><ref>Bevan, D. (2008).[http://www.hec.edu/var/fre/storage/original/application/71f5e725c1015bc11af86fc6d7e2b8bb.pdfContinental Philosophy: A Grounded Theory Approach and the Emergence of Convenient and Inconvenient Ethics. Cutting Edge Issues in Business Ethics]{{dead link|date=July 2017 |bot=InternetArchiveBot |fix-attempted=yes }} M. Painter-Morland and P. Werhane. Boston, Springer. 24: 131–152.</ref> This view is known as the [[Friedman doctrine]]. A multi-country 2011 survey found support for this view among the "informed public" ranging from 30 to 80%.<ref>{{cite news|newspaper=[[The Economist]]|title=Milton Friedman goes on tour|url=http://www.economist.com/node/18010553?story_id=18010553|date=Jan 27, 2011|access-date=March 12, 2011}}</ref> Ronald Duska and Jacques Cory have described Friedman's argument as [[consequentialist]] or [[utilitarian]] rather than [[pragmatic ethics|pragmatic]]: Friedman's argument implies that unrestrained corporate freedom would benefit the most people in the long term.<ref>{{harvnb|Duska|2007|p=46}} and {{harvnb|Cory|2004|pp=7–34}}</ref> Duska argued that Friedman failed to differentiate two very different aspects of business: (1) the ''motive'' of individuals, who are generally motivated by profit to participate in business, and (2) the socially sanctioned ''purpose'' of business, or the reason why people allow businesses to exist, which is to provide goods and services to people.<ref name=Duska>{{harvnb|Duska|2007|pp=8–11}}</ref> So Friedman was wrong that making a profit is the only concern of business, Duska argued.<ref name=Duska/>

[[Peter Drucker]] once said, "There is neither a separate ethics of business nor is one needed", implying that standards of personal ethics cover all business situations.<ref>Drucker, P. (1981). "What is business ethics?" The Public Interest Spring(63): 18–36.</ref> However, Drucker in another instance said that the ultimate responsibility of company directors is not to harm—''[[primum non nocere]]''.<ref>{{harvnb|Cory|2004|p=9}}</ref>

Philosopher and author [[Ayn Rand]] has put forth her idea of [[rational egoism]], which also applies to business ethics.<ref>{{Cite web |last=Kirkpatrick |first=Jerry |date=1992 |title=Ayn Rand's Objectivist Ethics As the Foundation of Business Ethics |url=https://philarchive.org/archive/KIRARO }}</ref> She stresses that the position of the [[Entrepreneurship|entrepreneur]], who has to be responsible for his own happiness and the business is a means to said happiness, where the entrepreneur is not required to serve the interest of anyone else and no one is entitled to his/her work.

Another view of business is that it must exhibit [[corporate social responsibility]] (CSR): an umbrella term indicating that an ethical business must act as a responsible citizen of the communities in which it operates even at the cost of profits or other goals.<ref>Pinnington, A. H. and Lafferty, G. (2002). Human Resource Management in Australia. Melbourne: Oxford University Press {{ISBN|0-19-551477-7}}</ref><ref name=program>{{cite book|title=Business Ethics: A Manual for Managing a Responsible Business Enterprise in Emerging Market Economies|year=2004|author=Good Governance Program|pages=93–128|chapter=5|location=Washington DC|publisher=US Department of Commerce|quote=Responsible management defines the enterprise's core beliefs: its purpose beyond profit, its core values, and its envisioned future|chapter-url=http://trade.gov/publications/abstracts/business-ethics-2004.asp|access-date=2017-01-19|archive-url=https://web.archive.org/web/20161222210757/http://trade.gov/publications/abstracts/business-ethics-2004.asp|archive-date=2016-12-22|url-status=dead}}</ref> In the US and most other nations, corporate entities are legally treated as persons in some respects. For example, they can hold title to property, sue and be sued and are subject to taxation, although their [[free speech]] rights are limited. This can be interpreted to imply that they have independent ethical responsibilities.{{Citation needed|date=April 2018}} Duska argued that stakeholders expect a business to be ethical and that violating that expectation must be counterproductive for the business.<ref name=Duska/>

Ethical issues include the rights and duties between a company and its [[stakeholder theory|employees, suppliers, customers and neighbors]], its [[fiduciary]] responsibility to its [[shareholder]]s. Issues concerning relations between different companies include [[takeover|hostile takeovers]] and [[industrial espionage]]. Related issues include [[corporate governance]]; [[corporate social entrepreneurship]]; [[Campaign finance|political contributions]]; legal issues such as the ethical debate over introducing a crime of [[corporate manslaughter]]; and the marketing of corporations' ethics policies.<ref>{{Cite journal|last=Mironescu|first=Roxana|title=Business Ethics, Between the Theoretical Concepts and the Romanian Firms' Practices|journal=Studies and Scientific Researches. Economics Edition|date=2014-12-25|url=http://sceco.ub.ro/index.php/SCECO/article/view/280|language=en|issue=20|doi=10.29358/sceco.v0i20.280|issn=2344-1321|doi-access=free}}</ref>
According to research published by the [[Institute of Business Ethics]] and [[Ipsos MORI]] in late 2012, the three major areas of public concern regarding business ethics in Britain are executive pay, corporate tax avoidance and bribery and corruption.<ref>[http://www.ibe.org.uk/userfiles/attitudes_to_be2012.pdf For a summary of the study see] [[Institute of Business Ethics]] {{Webarchive|url=https://web.archive.org/web/20131203091256/http://www.ibe.org.uk/userfiles/attitudes_to_be2012.pdf |date=2013-12-03 }}</ref>

The ethical standards of an entire organization can be damaged if a [[psychopathy in the workplace|corporate psychopath]] is in charge.<ref>Boddy C, Ladyshewsky RK, Galvin PG ''Leaders without ethics in global business: corporate psychopaths'' Journal of Public Affairs Vol10 June 2010 P121-138</ref> This will affect not only the company and its outcome but the employees who work under a corporate psychopath. The way a corporate psychopath can rise in a company is by their manipulation, scheming, and bullying. They do this in a way that can hide their true character and intentions within a company.