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Understandingethicsandmoralityinbusiness

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Understanding ethics and morality in business
By: Bahaudin Mujtaba | 2:08pm EDT April 22,
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You probably have read much about the basics of ethics, leadership, stewardship, morality and
social responsibility. Accordingly, you have most likely formed a good understanding of them
based on your experiences and thoughts.
However, most people do not really take the time to understand the true meaning of values, ethics
and morality.
Values are core beliefs or desires that guide or motivate our attitude and actions. What one values
drives his or her behavior. Some people value honesty or truthfulness in all situations; others
value loyalty to a higher degree in certain situations.

Dr. Bahaudin G. Mujtaba

Professor of management, Nova
Southeastern University at the College
of Business and Entrepreneurship

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Ethics is the branch of philosophy that theoretically, logically and rationally determines right from
wrong, good from bad, moral from immoral and just from unjust actions, conducts and behavior.
Some people de@ne ethics simply as doing what you say you will do or walking the talk.

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www.business.nova.edu/faculty.cfm/mujtaba
mujtaba@nova.edu

Overall, ethics establishes the rules and standards that govern the moral behavior of individuals
and groups. It also distinguishes between right and wrong conducts. It involves honest
consideration to underlying motive, to possible potential harm and to congruency with established
values and rules.

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Applied ethics refers to moral conclusions based on rules, standards, code of ethics and models
that help guide decisions. There are many subdivisions in the @eld of ethics; some of the common
ones are descriptive, normative and comparative ethics. Business ethics, more speci@cally, deals
with the creation and application of moral standards in the business environment.
Morals are judgments, standards and rules of good conduct in the society. They guide people
toward permissible behavior with regard to basic values.

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Consider the following dilemma and how the terms values, ethics and morals apply.
A thief named Zar guarantees that you will receive the agreed upon con@dential information from
your competitor in @ve days. Zar is professing a value he will deal with you honestly because
you, as the customer, are very important to his business. When Zar has delivered the proper
documents within the agreed upon time (@ve days), one can say that Zar has behaved ethically
because he was consistent with his professed values.
The following year, you ask Dar, who is a competitor to Zar, to do the same thing. He makes the
same promise as Zar by professing the same values. Five days later, Dar only delivers part of the
information, which is not totally accurate, and at the same time, blackmails you for more money.
Dar says that if does not get more money, he will go to the authorities and the competitor to
report this business dealing.
One can say that Dar has behaved unethically because his actions were not consistent with his
professed values. And, you can conclude that all three parties involved in stealing insider
information have acted immorally as judged by majority of the population.
Overall, values are professed statements of ones beliefs, ethics is delivering on ones professed
values and morals are actions of good conduct as judged by the society that enhance the welfare
of human beings.
With an understanding of values, ethics and morals while using ethical principles, a business
owner or leader can form a framework for eective decision-making with formalized strategies.
The willingness to add ethical principles to the decision-making structure indicates a desire to

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Understandingethicsandmoralityinbusiness

The willingness to add ethical principles to the decision-making structure indicates a desire to
promote fairness, as well as prevent potential ethical problems from occurring.
Corporate ethics programs are part of organizational life, and organizations can use such sessions
to further discuss the meaning of values, ethics and morals in the context of their businesses.
Organizational codes of ethics should protect individuals and address the moral values of the @rm
in the decision-making processes.
Corporate codes of ethics are not merely manuals for how to solve problems; they are tools that
can empower everyone in the organization to say, I am sorry, that is against our policy or that
would violate our companys code of ethics.
Doing so will increase the personal commitment of employees to their companies because people
take pride in the integrity of their corporate culture.

Dr. Bahaudin G. Mujtaba is professor of management for Nova Southeastern University at the
College of Business and Entrepreneurship. He has served as a certi@ed management development
specialist and trainer. He is the author of Managerial Skills and Practices for Global Leadership
and Coaching and Performance Management: Developing and Inspiring Leaders, published by
ILEAD Academy, LLC.

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