Ethics and Morals Role in Business

Subject: Business Ethics
Pages: 3
Words: 594
Reading time:
3 min
Study level: College


Ethics and morality are two aspects of business operations that are vital to the success of any business from the owner’s perspective and that of the public. Before distinguishing the two terms, it is worthy to note that ethical business norms have been evolving ever since man discovered the art of trading, actions, such as slave trade and colonialism, were previously deemed acceptable but became objectionable. Business ethics, on the other hand, is a more recent term as it only came into common use in the US in the early 1970s and in Europe in the late 1980s. Businesses began highlighting their ethical standpoint in the late 1980s and early 1990s, perhaps in an effort to distance themselves from business malpractices of the day, such as pricing (Roa, 2010).

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Ethical Issues and Moral Issues

These terms may appear to have a similar meaning, however, there exists a significant distinction between them. Ethics is a subdivision of philosophy and rationally separates right from wrong, good from bad, moral from immoral, and fair from unfair acts. Ethics refers to a “set of rules, principles, or ways of thinking that guide or claim the authority to guide, the actions of a particular group” (Roa, 2010). In general, ethics institute the regulations and standards that oversee the moral conduct of human beings and groups.

By contrast, morals are judgments, standards, and tenets of a society that make a distinction between right and wrong in the social aspect. There are no standard morals, besides, morality does not pronounce conduct to be either right or wrong but only refers to institutional standard norms, such as those set by a business organization or religious group (Ferrell et al., 2009). Morals guide people towards acceptable conduct concerning fundamental societal values.

Ethical and Moral Issues in Business

Business ethics deals with the establishment and use of moral standards in the business setting. In other words, it mirrors the application of philosophy in business dealings and aims at determining the core functions of the business. If a company’s core function is to maximize shareholder dividends, then using profits for other reasons is unethical. Ethics also dictates other business activities, for example, spying on a competitor, declaring false profits, false advertising content, unauthorized payments, and failure to adhere to product safety codes are all deemed unethical. Generally, business ethics dictate how businesses interact with their staff, customers, and stakeholders (Ferrell et al., 2009).

Morality is just as important in business as ethics. Business executives and staff can display moral courage by making personal sacrifices in order to realize the objectives of the business. However, this should not distract it from performing its core function of serving customers. Employees and staff must avoid immoral actions such as sexual harassment and discrimination of any form. Besides, organizations must ensure their staff works in acceptable conditions. The moral responsibility for any business organization and its staff is to respect the natural rights of persons. This covers the moral agency, rights and freedom, and autonomy of individuals. Organizations must also deal with their customers in a moral manner. For example, a decision to end a contract prematurely because the business has received a better offer is not morally right. The firm must respect the rights of all stakeholders (Roa, 2010).


With a proper understanding of ethical and moral issues, a business is able to create a framework for effectual decision-making with proper strategies. The willingness to incorporate ethics and morality in business decision-making processes shows a desire to uphold fairness, as well as avert potential ethical problems.


Ferrell, O. C., Fraedrich, J., and Ferrell, L. (2009). Business Ethics: Ethical Decision Making and Cases, 7th Ed. Ohio: South-Western Cengage Learning.

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Roa, F. C. (2010). Business Ethics and Social Responsibility, 2007 Ed. Manila: RFX Book Store.