May 15, 2018

With Facebook and Mark Zuckerberg constantly making the headlines due to the social media giant’s recent privacy and data scandal, we decided to look into a very sensitive and less talked-about issue – an organization’s need to practice business ethics and the moral values that it should nurture in all of its business activities. Looking for a service to help you create solutions for your businesses major problems, whether it may be accounting or technical issues, look into companies like Lutz and others.

The entire ideology of Business Ethics has its origin in the United States and dates back to the early 1970s. Although it has an American inception, its usage and context usually vary from country to country. And to make things even more interesting, the concept of Business Ethics has been vaguely talked about by various luminaries of the world, starting from Aristotle, to Adam Smith to even Karl Marx.

According to Raymond C. Baumhart, professor of Business Ethics at Loyola University Chicago, “The ethics of business is the ethics of responsibility. The businessman must promise that he will not harm knowingly.”

A more precise definition of it would be, “Business ethics is the study of business situations, activities, and decisions where issues of right and wrong are addressed” – as coined by Andrew Crane.


Now, what are the key components that make up an ethical business? Josephson Institute, a non-profit organization that develops and delivers services and materials to increase ethical commitment, the 12 ethical principles for a business executive are:


Ethical executives are honest and truthful in all their dealings and they do not deliberately mislead or deceive others by misrepresentations, overstatements, partial truths, or any other means.


Ethical executives demonstrate personal integrity and the courage of their convictions by doing what they think is right even when there is great pressure to do otherwise; they are principled, honorable and upright; they will fight for their beliefs.


Ethical executives are worthy of trust. They are candid in supplying relevant information and correcting misapprehensions of fact, and they make every reasonable effort to fulfill their promises and commitments.


Ethical executives are worthy of trust, demonstrate fidelity and loyalty to persons and institutions by friendship in adversity, support, and devotion to duty; they do not use or disclose information learned in confidence for personal advantage. They safeguard the ability to make independent professional judgments by scrupulously avoiding undue influences and conflicts of interest. They are loyal to their companies and colleagues and if they decide to accept other employment, they provide reasonable notice, respect the proprietary information of their former employer, and refuse to engage in any activities that take unfair advantage of their previous positions.


Ethical executives are fair and just in all dealings; they do not exercise power arbitrarily and do not use overreaching nor indecent means to gain or maintain any advantage nor take undue advantage of another’s mistakes or difficulties.


Ethical executives are caring, compassionate, benevolent and kind; they seek to accomplish their business objectives in a manner that causes the least harm and the greatest positive good.


Ethical executives demonstrate respect for the human dignity, autonomy, privacy, rights, and interests of all those who have a stake in their decisions.


Ethical executives abide by laws, rules, and regulations relating to their business activities.


Ethical executives pursue excellence in performing their duties, are well informed and prepared, and constantly endeavor to increase their proficiency in all areas of responsibility.


Ethical executives are conscious of the responsibilities and opportunities of their position of leadership and seek to be positive ethical role models by their own conduct and by helping to create an environment in which principled reasoning and ethical decision making are highly prized.


Ethical executives seek to protect and build the company’s good reputation and the morale of its employees by engaging in no conduct that might undermine respect and by taking whatever actions necessary to correct or prevent the inappropriate conduct of others. This helps in how businesses manage their online reputation, as well as how they present inwards.


Ethical executives acknowledge and accept personal accountability for the ethical quality of their decisions and omissions to themselves, their colleagues, their companies, and their communities.

It’s always necessary for businessmen and executives to abide by these principles in order to operate a business with ethics.


It’s not just the ones who make the product, ethics has to be maintained by the ones who promote it as well, i.e the marketers and advertisers. Popularly known as Ethical Marketing, this ideology is an extension of Business Ethics and deals with promoting honesty, fairness, and responsibility in all forms of advertising. It refers to the process by which companies market their goods and services by focusing not only on how their products benefit customers but also how they benefit socially responsible or environmental causes.


Although defying marketing ethics might seem to be easy with the help of digital marketing and such, but there are still countless brands who have integrated ethics in their brand essence and uses ethics to portray what the brand really stands for.


TOMS isn’t just engaged in corporate philanthropy to make easy money; it’s a core part of the company’s values and brand.

TOMS was founded by Blake Mycoskie in 2006 following a trip to Argentina. During his visit, Mycoskie saw firsthand how people living in impoverished areas of Argentina had to live without shoes, a challenge that many of us likely give little thought. Inspired by his trip, Mycoskie decided to establish his company with giving in mind.

Since 2006, TOMS’ footwear business has donated more than 60 million pairs of shoes to children in need all over the world. As if that weren’t enough, TOMS’ eyewear division has given more than 400,000 pairs of glasses to visually impaired people who lack access to ophthalmological care.

The company has further diversified its operations to include clean water initiatives through its coffee business, and its line of bags has helped support projects to expand access to birthing kits to expectant mothers in developing nations as well as training for birth attendants. Speaking of coffee businesses, if this is a business venture that you are looking to go into, checking out a coffee supplier Birmingham (if you’re looking to start a business in this city) to kickstart your business.
Until now, TOMS has helped more than 25,000 women to safely deliver their babies.


Clothing manufacturing is among the most controversial industries in the world. During the past 20 years or so, much greater attention has been paid to how and where our clothes are made, particularly in light of tragedies such as the blaze that tore through a garment manufacturing facility in Bangladesh in 2012, killing 117 people – a factory that supplied clothing to American retailers including Walmart and Sears. In light of greater awareness about the use of sweatshops, demand for ethically made clothing has soared incredibly in recent years, a trend that has given rise to dozens of companies that want to change how we make and view clothing, including Everlane.

Founded in 2010 by Michael Preysman, Everlane is boldly committed to ethical manufacturing. All of Everlane’s garments are made in factories that meet the most stringent quality standards – not only in terms of the clothes themselves but also in how workers are treated. Everlane only partners with manufacturers that demonstrate a strong commitment to their workers’ welfare, a fact the company prides itself upon in its marketing material.

What’s really interesting about Everlane is its commitment to radical transparency. Everlane isn’t content to merely tell you that its clothes are manufactured and sold ethically; the company also provides customers with a detailed cost breakdown for each and every one of its stylish, minimalist garments. This includes details on the cost of materials, labor, transportation and logistics, excise taxes and duties, and even hardware such as zippers and buttons. The company’s Elements jacket, for example, costs $60 to produce, and you can see exactly how much each of the manufacturing and logistical elements affects the retail price.

Typically, the production costs of most commercially produced clothing are a closely guarded secret. This isn’t merely because a breakdown of such costs would reveal a brand’s potential profit margin on a specific item, but also because they highlight the desperately poor pay and conditions many people working in garment manufacturing endure. By boldly revealing precisely how much each of its garments costs to make, Everlane can offer its customers the kind of transparency consumers want while enjoying the considerable karma this kind of radical transparency offers. This is real world stuff, which factor in Business Electricity , manufacturing and fixed costs into one number so customers can see exactly where their cash is going.


It is needless to say that consumers play a vital role in making brands pursue ethical business operations. According to a JWT Intelligence research, 86% of the US/UK millennials believe brands are more important to society today than in the past and should be accountable for public services and education; 75% think brands should act as cultural benefactors.

And companies have started to respond accordingly as well. Unilever has set up a Sustainable Living Plan which states that by 2020 the multinational FMCG giant will:

– Help more than one billion people to take action to improve their health and well-being

– Enhance the livelihoods of millions of people as it grows its business

– Halve the environmental footprint of the making and use of its products as it grows its business

Yes, the perception and necessity of a brand to be ethical will vary depending on the demographics, socio-economic as well as the psychological traits of the consumer that it caters to. But there are specific characteristics of the consumers who consider the ethical aspects of a brand before making a purchase. As per a global research being conducted by BBMG and GlobeScan, this new breed of customers is being identified as “Aspirational Consumers” – who combines a love of style, social status, and sustainability with a desire to shift cultural norms. This aspirational generation is not defined by age but by their desire, as consumers, for brands to act in such a way as to meet their needs, make a positive impact on others and connect them with an idea or a community bigger than themselves.

Their expectations towards the brands that in terms of business ethics are:


Corporate Social Responsibility (popularly known as CSR) can be deemed as a direct derivative of business ethics. It solely comes from the company’s urge to do something for the betterment of the society and live a lasting impact in the community. According to a research conducted by the Huffington Post, 64% of the CEOs around the world are investing more on CSR, as it clearly outlines a company’s potential to make a lasting difference. Hence, companies like Apple, Google, Microsoft to even LEGO and Disney are investing for the betterment of the world.

Soaring profits, cut-throat competition, a highly engaging marketing campaign – there might be various things for a company to worry about. But whether we agree or not, maintaining ethics in the holistic operations of a business can be quite a challenging, yet necessary task. Let’s take the Nestle Maggi noodles’ lead debacle in India for example. A consumer product that has been adored by the consumers for decades, had a strong brand equity and resulted in an enormous amount of annual sales. One wrong move and the whole thing came crashing down. From massive protests, extreme media backlash and the products finally being removed from the market, Nestle had to go through a very strenuous journey to find its way back in the shelves of the Indian market. This goes on to prove how ethics can make or break even the most established, well-reputed companies.

With the advent of digital marketing and e-commerce, it has become excessively easy for companies to adapt to unethical and low business standards. From credit card fraud to providing low-quality products, any company can step on the bad side of things and continue growing a brand that has a weak morale. But it would be extremely difficult to sustain its operations in the long-run because another thing that the Internet has given the consumers is a ‘voice’. With massive social media protests, blogs, review to even dedicated hate groups, brands really need to maintain their moral standards if they are adamant about surviving in the market for the next few decades to come.

As reputed Canadian writer and hotelier, Isadore Sharp once said, “Living up to your commitments is part of business ethics. My word is my Bond.” This is true in every aspect, for brands make promises to their customers and they should work in both internal and external aspect in order to truly fulfill the promises that they have made. For only then shall the brand be able to create a lifelong bond with its customer; a bond that is clearly maintained by ethics and excellence.

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