Business ethics is a contested terrain. There are economists and business gurus who claim ethics is irrelevant to the field of business. For instance, the neo-liberal Chicago school economist Milton Friedman held that corporations are amoral and CEOs have only one duty to maximize the profits of a company.
He also said in an interview that business cannot have social responsibilities Similarly Peter Drucker, a business guru, also observed, “There is neither a separate ethics of business nor is one needed”. However, Peter Druker in another instance observed that ultimate responsibility of the directors of the companies is above all not to harm – primum non nocere The ideological position of excluding firms from ethical obligations is contested as it defies scholarly understanding, age old wisdom and commonsense.
Business ethics is a contested terrain not just because celebrated persons in the field of economics and business questioned the relevance of ethics in business, observe editors of respected business ethics textbook, but also because what is presented in the name of ethics is either sentimental common sense, or a set of excuses for being unpleasant. What is presented as ethics in many of the Business Ethics manuals and books are just premature responses to questions that look like answers or mere procedural form filling exercises unconcerned about the real ethical dilemmas. For instance, a manual of business ethics published by good governance program of US Department of Commerce treats business ethics as nothing more than set of instructions and procedures to be followed by ‘ethics officers’ and downward in the hierarchy of business Campbell Jones et al., in their text book, “For Business Ethics” point out six foreclosures, something has been closed down before it should have been, by the proponents of business ethics: foreclosure of philosophy, society, the ethical, meaning of ethics, politics, and the goal of ethics. Ethics, hotly debated throughout the twentieth century, has been one of the major sources of philosophical reflection up to the close of the millennium. The field of business ethics, it is contested, has insulated itself from the new developments in ethical debate, either ignoring them altogether or misrepresenting. Arguments in Business Ethics often downplay the role of social context, social arrangements, social processes, history, politics and structural aspects constituting individuals and individual actions. Issues taken as ethical dilemma by business ethicists are often narrow in scope, such as behaving politely with customers, following office etiquettes, protecting privacy of employees, avoiding discriminations, bribery, kickbacks etc., while issues like inequality among global labour, ethics of lobbying, intellectual property alienation, charity as gift, biopiracy etc., are broadly neglected. The term ethics connotes different thing to people oriented differently. There are arguments from virtue, deontological, utilitarian and pragmatic schools of thought about ethics. The differences are not just a matter of talking about the same thing in different ways. Rather, these different ways of talking about ethics seem to be talking about different things, about different ways of imagining ethics itself. Like discussions of ethics in any other fields, business ethics too should be treated along the percepts of various established, neglected and emergent schools of ethical thought. Business ethics is assumed to be something that does not really trouble basic assumptions about the normal practices of business. Instead of looking at the politics the corporate firms play in modifying rules of accounting practices, diluting labour laws, weakening regulatory mechanisms etc., and it tends to look at the ethical collapse of firms like Enron and Arthur Anderson as if it were isolated instances of individuals slipping away from their ethical responsibilities. Further, Business ethicists often foreclose the goal of being ethical. They attempt to convince that being ethical serves a strategy of image management or sustained profit making. Others hold being ethical and making profit are equally valid goals of firms, some others claim being ethical is just for the sake of being ethical. Further, Ethics, when remodeled as business ethics it suffers the fate of business expediency thus business ethicists prepare themselves for unambiguous quick and standard answers while ethics is not a matter of stable solutions but one of endless openness and difficulty and beyond the limits of normativity.
Discussion on ethics in business is necessary because, business can go 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’ Business does not operate in vacuum. Firms and corporations operate in the social and natural environment. By virtue of existing in the social and natural environment, business is duty bound to be accountable to the natural and social environment in which it survives. Irrespective of the demands and pressures upon it, business, by virtue of its existence is bound to be ethical, for at least two reasons: one, because whatever the business does affects its stakeholders . and two, because every juncture of action has trajectories of ethical as well as unethical paths wherein the existence of the business is justified by ethical alternatives it responsibly chooses One of the conditions that brought business ethics to the forefront is the demise of small scale, high trust and face-to-face enterprises and emergence of huge multinational corporate structures capable of drastically affecting everyday lives of the masses.
Ethics, the search for ‘a good way of being’ for a wise course of action, as it could be practiced by business firms is called business ethics Ethics in business deals with the ethical path business firms ought to adopt. Afflicting the least suffering to humans and the nature in its entirety, achieving the greatest net benefit to the society and economy enriching the capability of the system in which it is functioning ., being fair in all its dealings with its proximate and remote stakeholders , being prepared to correct its mal-habits and nurturing an enduring virtuous corporate character in totality, can be called business ethics. It is often suggested from extended utilitarian/ consequentialist position that businesses can often attain short-lived gains by acting in an unethical fashion; however, such behaviours tend to undermine the economy over time. For those who uphold the principles of virtue ethics, all that matters is corporations maintaining character of honesty, fairness and humaneness than being ethical for the sake of better consequences. On the other hand experts of deontological ethics and virtue ethicspostulate that what matters is the motive to be ethical than the consequential fallout Jacques Cory, a noted business ethicist observes, “companies should behave ethically and be profitable in parallel, and even if ethics diminishes the profitability of the company, they should still behave ethically”. Seen from the Kantian Ethical perspective Business has to consider its remote and proximate stakeholders as ends in themselves and not merely as means toward some other end. . A business becomes ethical by assuming the responsibility of ‘’’translating’’’ the abstract ethical injunctions into series of obligations. However, while translating, we do not just abide by the ‘’’a priori’’’ ethical injunctions or codes rather respond to the situation in its contextual singularity pragmatically choosing the best alternative course of response from the multiple possibilities. In other words, ethics is a matter of 'responsibility in the experience of absolute decisions made outside of knowledge or given norms' .
Business ethics (also known as Corporate ethics) is a form of applied ethics or professional ethics that examines ethical principles and moral or ethical problems that arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals in business and business organizations as a whole. Applied ethics is a field of ethics that deals with ethical questions in many fields such as medical, technical, legal and business ethics.
Characteristically, business ethics can be both normative and descriptive. It is said to be normative because it takes the practical task of arriving at moral standards through advocating good habits a business firm should necessarily acquire, duties it should follow, virtues it should maintain and the overall utility it should maximize. It is sometimes evaluated as descriptive ethics because it outlines ethical belief patterns of various business firms and explain them. The range and quantity of business ethical issues reflects the degree to which business is perceived to be at odds with economic as well as non-economic social and environmental values.
Business ethics being part of the larger social ethics, always been affected by the ethics of the epoch. At different epochs of the world, people, especially the elites of the world, were blind to ethics and morality which were obviously unethical to the succeeding epoch. History of business, thus, is tainted by and through the history of slavery history of colonialism and later by the history of cold war. The current discourse of business ethics is the ethical discourse of the post-colonialism and post-world wars. The need for business ethics in the current epoch had begun gaining attention since 1970s . Historically, firms started highlighting their ethical stature since the late 1980s and early 1990s, as the world witnessed serious economic and natural disasters because of unethical business practices. The Bhopal disaster, and the fall of Enron are instances of the major disasters triggered by bad corporate ethics. It should be noted that the idea of business ethics caught the attention of academics, media and business firms by the end of the overt Cold War . Cold Wars, seen through pages of history were fought through and fought for American business firms abroad. Ideologically, promotion of firms owned by American nationals were presented as if it were freedom and the local resistance against the excess of American firms were labeled as communist upraising sponsored by the Soviet Block. .Further, even legitimate criticism against unethical practice of the firms were presented as if it were infringement into the 'freedom' of the entrepreneurs by activists backed by communist totalitarians . This scuttled the discourse of business ethics both at media and academics. . Overt violence by business firms have decreased to a great extent in the democratic and media affluent world of the day, though it has not ceased to exist. The war in Iraq is one of the recent example of overt violence by the liberal western states on the behalf of oil business interests.
See also: corporate abuse, corporate crime.
Cases: accounting scandals, Enron, WorldCom, Satyam
‘Human resource management’ occupies the sphere of activity of recruitment, selection, orientation, performance appraisal, training and development, industrial relations and health and safety issues where ethics really matters. The field since operate surrounded by market interests that commodify and instrumentalize everything for the sake of profit claimed in the name of shareholders, it should be predictable that there will be contesting claims of HR ethics . Predictably, ethics of human resource management is a contested terrain like other sub-fields of business ethics. Business Ethicists differ in their orientation towards labour ethics. One group of ethicists influenced by the logic of neoliberalism propose that there can be no ethics beyond utilizing human resources towards earning higher profits for the shareholders . The neoliberal orientation is challenged by the argument that labour well being is not second to the goal of shareholder profiteering . Some others look at human resources management ethics as a discourse towards egalitarian workplace and dignity of labour .
The Discussions on ethical issues that may arise in the employment relationship, including the ethics of discrimination, and employees’ rights and duties are commonly seen in the business ethics texts While some argue that there are certain inalienable rights of workplace such as a right to work, a right to privacy, a right to be paid in accordance with comparable worth, a right not to be the victim of discrimination, others claim that these rights are negotiable. Ethical discourse in HRM often reduced the ethical behavior of firms as if they were charity from the firms rather than rights of employees . Except in the occupations, where market conditions overwhelmingly favour employees, employees are treated disposable and expendable and thus they are defenselessly cornered to extreme vulnerability The expendability of employees, however, is justified in the the texts of ‘business morality’ on the ground the ethical position against such an expendability should be sacrificed for ‘greater merit in a free market system’(Machan, 2007: 68). Further, it is argued since because ‘both employees and employers do in fact possess economic power’ in the free market, it would be unethical if governments or labour unions ‘impose employment terms on the labor relationship’ (Machan, 2007:67). There are discussions of ethics in employment management individual practices, issues like policies and practices of human resource management, the roles of human resource (HR) practitioners, the decline of trade unionism, issues of globalizing the labour etc., in the recent HRM literature, though they do not occupy the central stage in the HR academics. It is observed that with the decline of labour unions world over, employees are potentially more vulnerable to opportunistic and unethical behavior. . It is criticized that HRM has become a strategic arm of shareholder profiteering through making workers into ‘willing slaves’ . A well cited article points out that there are ‘soft’ and a ‘hard’ versions of HRMs, where in the soft-approach regard employees as a source of creative energy and participants in workplace decision making and hard version is more explicitly focused on organizational rationality, control, and profitability. . In response, it is argued that the stereotypes of hard and soft HRM are both inimical to ethics because they instrumentally attend to the profit motive without giving enough consideration to other morally relevant concerns such as social justice and human wellbeing . However, there are studies indicating, long term sustainable success of organizations can be ensured only with humanely treated satisfied workforce .
Market, obviously, is not inherently ethical institution that could be lead by the mythical ‘invisible hand’ alone; neither, it can be alluded that market is inherently unethical. Also, ethics is not something that could be achieved through establishment of procedures, drawing codes of ethics, or enactment of law or any other heteronomous means, though their necessity could remain unquestioned .However, though market need not be the cause of moral or ethical hazards it may serve an occasion for such hazards. The moral hazards of HRM would be on increase so much as human relations and the resources embedded within humans are treated merely as commodities .
All of the above are also related to the hiring and firing of employees. An employee or future employee can not be hired or fired based on race, age, gender, religion, or any other disciminatory act.
Marketing Ethics is a subset of business ethics. Ethics in marketing deals with the principles, values and/or ideals by which marketers (and marketing institutions) ought to act .Marketing ethics too, like its parent discipline, is a contested terrain. Discussions of marketing ethics are focused around two major concerns: one is the concern from political philosophy and the other is from the transaction-focused business practice . On the one side, following ideologists like Milton Friedman and Ayn Rand, it is argued that the only ethics in marketing is maximizing profit for the shareholder. On the other side it is argued that market is responsible to the consumers and other proximate as well as remote stakeholders as much as, if not less, it is responsible to its shareholders. The ethical prudence of targeting vulnerable sections for consumption of redundant or dangerous products/services, being transparent about the source of labour (child labour, sweatshop labour, fair labour renumeration), declaration regarding fair treatment and fair pay to the employees , being fair and transparent about the environmental risks, the ethical issues of product or service transparency (being transparent about the ingredients used in the product/service - use of genetically modified organisms, content, ‘source code’ in the case of software), , appropriate labelling, , the ethics of declaration of the risks in using the product/service (health risks, financial risks, security risks etc.), , product/service safety and liability, respect for stakeholder privacy and autonomy, the issues of outsmarting rival business through unethical business tactics etc., advertising truthfulness and honesty, fairness in pricing & distribution, and forthrightness in selling etc., are few among the issues debated among people concerned about ethics of marketing practice.
Ethical discussion in marketing is still in its nascent stage. Marketing Ethics came of age only as late as 1990s . As it is the case with business ethics in general, marketing ethics too is approached from ethical perspectives of virtue, deontology, consequentialism, pragmatism and also from relativist positions. However, there are extremely few articles published from the perspective of 20th or 21st century philosophy of ethics .
One impediment in defining marketing ethics is the difficulty of pointing out the agency responsible for the practice of ethics. Competition, rivalry among the firms, lack of autonomy of the persons at different levels of marketing hierarchy, nature of the products marketed, nature of the persons to whom products are marketed, the profit margin claimed, and everything relating the marketing field does make the agency of a marketing person just a cog in the wheel. Deprived of agency, the hierarchy of marketing hardly lets one with an opportunity to autonomously decide to be ethical. Without one having agency, one is deprived of the ethical choices.
Marketing ethics is not restricted to the field of marketing alone, rather its influence spread across all fields of life and most importantly construction of ‘socially salient identities for people’ and “affect some people’s morally significant perceptions of and interactions with other people, and if they can contribute to those perceptions or interactions going seriously wrong, these activities have bearing on fundamental ethical questions” . Marketing, especially its visual communication, it is observed, serve as an instrument of epistemic closure restricting worldviews within stereotypes of gender, class and race relationships.
See also: memespace, disinformation, advertising techniques, false advertising, advertising regulation
Cases: Benetton.
This area of business ethics usually deals with the duties of a company to ensure that products and production processes do not cause harm. Some of the more acute dilemmas in this area arise out of the fact that there is usually a degree of danger in any product or production process and it is difficult to define a degree of permissibility, or the degree of permissibility may depend on the changing state of preventative technologies or changing social perceptions of acceptable risk.
See also: product liability
Cases: Ford Pinto scandal, Bhopal disaster, asbestos / asbestos and the law, Peanut Corporation of America.
Knowledge and skills are valuable but not easily "ownable" as objects. Nor is it obvious who has the greater rights to an idea: the company who trained the employee, or the employee themselves? The country in which the plant grew, or the company which discovered and developed the plant's medicinal potential? As a result, attempts to assert ownership and ethical disputes over ownership arise.
Cases: private versus public interests in the Human Genome Project
Ethics and Technology The computer and the World Wide Web are two of the most significant inventions of the twentieth century. There are many ethical issues that arise from this technology. It is easy to gain access to information. This leads to data mining, workplace monitoring, and privacy invasion.
Medical technology has improved as well. Pharmaceutical companies have the technology to produce life saving drugs. These drugs are protected by patents and there are no generic drugs available. This raises many ethical questions.
The issues here are grouped together because they involve a much wider, global view on business ethical matters.
While business ethics emerged as a field in the 1970s, international business ethics did not emerge until the late 1990s, looking back on the international developments of that decade. Many new practical issues arose out of the international context of business. Theoretical issues such as cultural relativity of ethical values receive more emphasis in this field. Other, older issues can be grouped here as well. Issues and subfields include:
Foreign countries often use dumping as a competitive threat, selling products at prices lower than their normal value. This can lead to problems in domestic markets. It becomes difficult for these markets to compete with the pricing set by foreign markets. In 2009, the International Trade Commission has been researching anti-dumping laws. Dumping is often seen as an ethical issue, as larger companies are taking advantage of other less economically advanced companies.
This vaguely defined area, perhaps not part of but only related to business ethics, is where business ethicists venture into the fields of political economy and political philosophy, focusing on the rights and wrongs of various systems for the distribution of economic benefits. John Rawls and Robert Nozick are both notable contributors.
Business ethics can be examined from various new perspectives, including the perspective of the employee, the commercial enterprise, and society as a whole. Very often, situations arise in which there is conflict between one or more of the parties, such that serving the interest of one party is a detriment to the other(s). For example, a particular outcome might be good for the employee, whereas, it would be bad for the company, society, or vice versa. Some ethicists (e.g., Henry Sidgwick) see the principal role of ethics as the harmonization and reconciliation of conflicting interests.
Philosophers and others disagree about the purpose of a business ethic in society. For example, some suggest that the principal purpose of a business is to maximize returns to its owners, or in the case of a publicly-traded concern, its shareholders. Thus, under this view, only those activities that increase profitability and shareholder value should be encouraged, because any others function as a tax on profits. Some believe that the only companies that are likely to survive in a competitive marketplace are those that place profit maximization above everything else. However, some point out that self-interest would still require a business to obey the law and adhere to basic moral rules, because the consequences of failing to do so could be very costly in fines, loss of licensure, or company reputation. The noted economist Milton Friedman was a leading proponent of this view.
Some take the position that organizations are not capable of moral agency. Under this, ethical behavior is required of individual human beings, but not of the business or corporation.
Other theorists contend that a business has moral duties that extend well beyond serving the interests of its owners or stockholders, and that these duties consist of more than simply obeying the law. They believe a business has moral responsibilities to so-called stakeholder, people who have an interest in the conduct of the business, which might include employees, customers, vendors, the local community, or even society as a whole. Stakeholders can also be broken down into primary and secondary stakeholders. Primary stakeholders are people that are affected directly such as stockholders, where secondary stakeholders are people who are not affected directly such as the government. They would say that stakeholders have certain rights with regard to how the business operates, and some would suggest that this includes even rights of governance.
Some theorists have adapted social contract theory to business, whereby companies become quasi-democratic associations, and employees and other stakeholders are given voice over a company's operations. This approach has become especially popular subsequent to the revival of contract theory in political philosophy, which is largely due to John Rawls' A Theory of Justice, and the advent of the consensus-oriented approach to solving business problems, an aspect of the "quality movement" that emerged in the 1980s. Professors Thomas Donaldson and Thomas Dunfee proposed a version of contract theory for business, which they call Integrative Social Contracts Theory. They posit that conflicting interests are best resolved by formulating a "fair agreement" between the parties, using a combination of i) macro-principles that all rational people would agree upon as universal principles, and, ii) micro-principles formulated by actual agreements among the interested parties. Critics say the proponents of contract theories miss a central point, namely, that a business is someone's property and not a mini-state or a means of distributing social justice.
Ethical issues can arise when companies must comply with multiple and sometimes conflicting legal or cultural standards, as in the case of multinational companies that operate in countries with varying practices. The question arises, for example, ought a company to obey the laws of its home country, or should it follow the less stringent laws of the developing country in which it does business? To illustrate, United States law forbids companies from paying bribes either domestically or overseas; however, in other parts of the world, bribery is a customary, accepted way of doing business. Similar problems can occur with regard to child labor, employee safety, work hours, wages, discrimination, and environmental protection laws.
It is sometimes claimed that a Gresham's law of ethics applies in which bad ethical practices drive out good ethical practices. It is claimed that in a competitive business environment, those companies that survive are the ones that recognize that their only role is to maximize profits.
As part of more comprehensive compliance and ethics programs, many companies have formulated internal policies pertaining to the ethical conduct of employees. These policies can be simple exhortations in broad, highly-generalized language (typically called a corporate ethics statement), or they can be more detailed policies, containing specific behavioral requirements (typically called corporate ethics codes). They are generally meant to identify the company's expectations of workers and to offer guidance on handling some of the more common ethical problems that might arise in the course of doing business. It is hoped that having such a policy will lead to greater ethical awareness, consistency in application, and the avoidance of ethical disasters.
An increasing number of companies also requires employees to attend seminars regarding business conduct, which often include discussion of the company's policies, specific case studies, and legal requirements. Some companies even require their employees to sign agreements stating that they will abide by the company's rules of conduct.
Many companies are assessing the environmental factors that can lead employees to engage in unethical conduct. A competitive business environment may call for unethical behavior. Lying has become expected in fields such as trading. An example of this are the issues surrounding the unethical actions of the Saloman Brothers.
Not everyone supports corporate policies that govern ethical conduct. Some claim that ethical problems are better dealt with by depending upon employees to use their own judgment.
Others believe that corporate ethics policies are primarily rooted in utilitarian concerns, and that they are mainly to limit the company's legal liability, or to curry public favor by giving the appearance of being a good corporate citizen. Ideally, the company will avoid a lawsuit because its employees will follow the rules. Should a lawsuit occur, the company can claim that the problem would not have arisen if the employee had only followed the code properly.
Sometimes there is disconnection between the company's code of ethics and the company's actual practices. Thus, whether or not such conduct is explicitly sanctioned by management, at worst, this makes the policy duplicitous, and, at best, it is merely a marketing tool.
To be successful, most ethicists would suggest that an ethics policy should be:
Ethics officers (sometimes called "compliance" or "business conduct officers") have been appointed formally by organizations since the mid-1980s. One of the catalysts for the creation of this new role was a series of fraud, corruption and abuse scandals that afflicted the U.S. defense industry at that time. This led to the creation of the Defense Industry Initiative (DII), a pan-industry initiative to promote and ensure ethical business practices. The DII set an early benchmark for ethics management in corporations. In 1991, the Ethics & Compliance Officer Association (ECOA) -- originally the Ethics Officer Association (EOA)-- was founded at the Center for Business Ethics(at Bentley College, Waltham, MA) as a professional association for those responsible for managing organizations' efforts to achieve ethical best practices. The membership grew rapidly (the ECOA now has over 1,100 members) and was soon established as an independent organization.
Another critical factor in the decisions of companies to appoint ethics/compliance officers was the passing of the Federal Sentencing Guidelines for Organizations in 1991, which set standards that organizations (large or small, commercial and non-commercial) had to follow to obtain a reduction in sentence if they should be convicted of a federal offense. Although intended to assist judges with sentencing, the influence in helping to establish best practices has been far-reaching.
In the wake of numerous corporate scandals between 2001-04 (affecting large corporations like Enron, WorldCom and Tyco), even small and medium-sized companies have begun to appoint ethics officers. They often report to the Chief Executive Officer and are responsible for assessing the ethical implications of the company's activities, making recommendations regarding the company's ethical policies, and disseminating information to employees. They are particularly interested in uncovering or preventing unethical and illegal actions. This trend is partly due to the Sarbanes-Oxley Act in the United States, which was enacted in reaction to the above scandals. A related trend is the introduction of risk assessment officers that monitor how shareholders' investments might be affected by the company's decisions.
The effectiveness of ethics officers in the marketplace is not clear. If the appointment is made primarily as a reaction to legislative requirements, one might expect the efficacy to be minimal, at least, over the short term. In part, this is because ethical business practices result from a corporate culture that consistently places value on ethical behavior, a culture and climate that usually emanates from the top of the organization. The mere establishment of a position to oversee ethics will most likely be insufficient to inculcate ethical behaviour: a more systemic programme with consistent support from general management will be necessary.
The foundation for ethical behavior goes well beyond corporate culture and the policies of any given company, for it also depends greatly upon an individual's early moral training, the other institutions that affect an individual, the competitive business environment the company is in and, indeed, society as a whole.
As an academic discipline, business ethics emerged in the 1970s. Since no academic business ethics journals or conferences existed, researchers published their papers in general management outlets, and attended general conferences, such as the Academy of Management. Over time, several peer-reviewed journals appeared, and more researchers entered the field. Especially, higher interest in business topics among academics was observed after several corporate scandals in the earlier 2000s. As of 2009, sixteen academic journals devoted to various business ethics issues existed, with Journal of Business Ethics and Business Ethics Quarterly being considered the leading A+ outlets.
The International Business Development Institute, a global non-proft organization, is a self-regulated organization that represents 217 nations and all 50 United States offering a Charter in Business Development (CBD) that focuses on ethical business practices and standards. The Charter is administered and directed by top Harvard, MIT, and Fulbright Scholars, and it includes graduate-level coursework in economics, politics, marketing, management, technology, and legal aspects of business development as it pertains to business ethics. [1] IBDI also oversees the International Business Development Institute of Asia [2] which provides individuals living in 20 Asian nations the opportunity to earn his or her CBD or CIBD Charter.
The historical and global importance of religious views on business ethics is sometimes underestimated in standard introductions to business ethics according to Dr. Todd Albertson author of The Gods of Business book. Particularly in Asia and the Middle East, religious and cultural perspectives have a strong influence on the conduct of business and the creation of business values.
Examples include:
Business ethics should be distinguished from the philosophy of business, the branch of philosophy that deals with the philosophical, political, and ethical underpinnings of business and economics. Business ethics operates on the premise, for example, that the ethical operation of a private business is possible -- those who dispute that premise, such as libertarian socialists, (who contend that "business ethics" is an oxymoron) do so by definition outside of the domain of business ethics proper.
The philosophy of business also deals with questions such as what, if any, are the social responsibilities of a business; business management theory; theories of individualism vs. collectivism; free will among participants in the marketplace; the role of self interest; invisible hand theories; the requirements of social justice; and natural rights, especially property rights, in relation to the business enterprise.
Business ethics is also related to political economy, which is economic analysis from political and historical perspectives. Political economy deals with the distributive consequences of economic actions. It asks who gains and who loses from economic activity, and is the resultant distribution fair or just, which are central ethical issues.