Ethics refers to the moral principles that guide a person’s behavior. Ethics act as a benchmark for deciding whether an action or decision is good or bad. Managers find that they routinely have to make decisions that require ethical judgments, since many decisions can potentially harm others.
A person typically takes on ethical positions early in life, due to the influence of family, colleagues, schooling, and religious institutions. There are many ethical positions that a person can take in varying degrees. For example:
Everyone is entitled to privacy.
Everyone should be treated fairly.
One should be honest in dealings with others.
One should take a course of action that does the least harm to others.
One should treat others as one would want to be treated.
The exact mix of positions followed will depend on the individual – we do not all possess exactly the same standards. This also means that people may use different approaches to developing a reasoned judgment for how to deal with an ethically challenging situation.
Whatever the mix of ethical positions may be, a person is more likely to follow it when there are clear advantages to doing so. For example, having a strong code of ethics allows a businessperson to enjoy a higher level of customer and employee loyalty and a stronger public reputation, while also reducing the probability of being targeted by lawsuits.