What Are Business Ethics? Definition, Overview, and Examples

Updated May 17, 2023

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A woman smiles and looks off in the distance, next to text that says, "What are the types of business ethics?" and the following list:

Caring
Respect
Trustworthiness
Integrity
Loyalty
Fairness

Most businesses implement business ethics in their workplace to ensure employees are all following the same moral code. This allows businesses to maintain employee welfare and create a positive reputation. In this article, we'll look at what business ethics are, why they are necessary, examples of common business ethics, and how to apply them in your workplace.

What are business ethics?

Business ethics are a set of moral principles that businesses use as a guideline to determine what is right, wrong, and appropriate or inappropriate in the workplace. Every employee, even those in prominent positions like the CEO, must follow the designated business ethics. This helps ensure that every member of staff feels they are equal and treated as such. Individuals can also have their own set of business ethics to follow to ensure they remain professional in the workplace.

Why are business ethics important?

Every business, no matter the size, should identify ethical guidelines. Having set guidelines that everyone is aware of ensures businesses won't be held responsible for any immoral, unprofessional, or even illegal behaviour from employees. This creates a better reputation for the business and encourages new employees and investors to join the company.

Similarly, employees that feel appreciated are more likely to be loyal and stay with the company long term. Feeling appreciated encourages employees to produce higher-quality work and collaborate with their team more effectively. Team members that are on the same page about the company's business ethics are more productive and contribute to creating a positive work environment.

What are the types of business ethics?

Business ethics is a diverse field of study, but most businesses follow these fundamental principles when creating their guidelines:

Caring: Although your personal life and work life should often remain separate, businesses must realize their employees, investors, and consumers are human beings. Employees are happier when their employers care about their well-being and take steps to foster positive work environments. Business ethics are just one of the many ways you can show your employees you have their best interest at heart.
Respect: There is a longstanding belief that we must respect our elders or superiors, but business ethics dictates respect for everyone. Businesses should emphasize respect for their employees and customers by using proper communication, listening to differing opinions, and thinking before speaking to avoid an argument.
Trustworthiness: Many businesses trust employees to handle sensitive information, deal with finances, or work directly with customers. Employees should thus ensure they act in a trustworthy manner at all times to do their job effectively.
Integrity: Having integrity may seem like a personal ethic, but every employee should work with integrity. This means trying to do the right thing in every situation by working in a way that will benefit every employee and the business, not just yourself.
Loyalty: Remaining loyal to your company or staff is important in ensuring the business maintains a positive reputation. This could include not posting negative comments about the company, not working with the business' competitors, or not gossiping about other employees.
Fairness: Equality in the workplace is important as everyone deserves fair treatment. Although different employees may have different rankings or backgrounds, businesses must ensure every employee, investor, and consumer feels welcome and equal.

How to establish business ethics

Every business should establish its business ethics by creating a code of conduct document that outlines every principle. When you hire a new employee, you should go over this document with them and ensure they have their own copy to refer to whenever they want.

Examples of ethical behaviour at work

Every business will use the fundamental business ethics we mentioned earlier to create its own principles. But business ethics may vary depending on the industry. Here are some common examples of how companies can apply these business ethics practically:

Put customers' needs first

Companies that work in customer service should train employees to prioritize customer needs as long as it does not result in the unethical treatment of employees. This ensures that every customer that enters the store or office leaves happy and wants to return.

Respect customer information

In a similar vein, businesses should encourage every employee to respect customer information. Depending on the industry, this can include payment information, health information, or purchase history. Sharing any customer information unnecessarily can not only be disrespectful but in some cases, illegal. Ensure every employee is aware of local laws, such as the Personal Information Protection and Electronic Document Act (PIPEDA) that protects patient information, as well as the company's moral code.

Prioritize workplace diversity

As fairness and integrity are two main business ethics principles, prioritizing workplace diversity is vital, especially since it is a law in Canada under the Employment Equity Act (EEA) and the Canadian Human Rights Act (CHRA). No business can discriminate against employees based on their nationality, ethnicity, religion, age, sex, sexual orientation, marital status, or disability. Businesses should also ensure that employees are also treating one another respectfully, regardless of their background.

Take care of company property

Most jobs require employees to use certain equipment, technology, tools, and supplies. As employers provide these resources, employees should take care of them and maintain them so other employees can use them too.

Respect coworkers

Even if you disagree with another colleague's perspective or ideologies, every employee needs to respects one another. In the Canada Labour Code, there are Workplace Harassment and Violent Prevention Regulations that every business must follow. So, it's both morally and legally important that employees respect everyone they interact with within the workplace.

Follow the dress code

Dress codes vary greatly in different workplaces and industries, but employees must remember to respect their company's dress code. Having a dress code ensures every employee presents themselves in a professional manner at work.

Report conflicts of interest

When an employee makes self-serving decisions, such as accepting gifts from a customer or getting an unqualified relative a job, it can hurt the business or other employees. Businesses need to create rules that will limit conflicts of interest, and if other employees notice this behaviour, they should point it out.

Be transparent

Transparency and clear communication are vital in the workplace. Lying to employees can be upsetting and may encourage them to feel like they can also lie. This will likely create a hostile work environment. Encouraging employees to clearly communicate their wants and needs ensures everyone is on the same page and allows them to be more open and honest.

Examples of unethical behaviour at work

When discussing business ethics and how to apply them to your workplace, it's also important to discuss what unethical behaviour looks like so you can avoid it. Here are some examples of what unethical behaviour at work can look like:

Lying: Mutual trust between upper management and employees is vital for a successful workplace. Lying will break that trust, and it's hard to get back. It can also put employees off the job. For example, if a manager promises an employee a promotion and it never happens, they're likely to feel discouraged and may start performing poorly.
Misusing company time: Employees may stray from their work by talking to coworkers, using their phones, or taking longer breaks. As tempting as this can be, it is a misuse of company time. This is unethical as the employee still gets paid for the time they were not working.
Creating a hostile workplace: Management or other employees may create a hostile workplace, sometimes without even realizing it. They can do this in several ways, like micro-managing, gossiping about other employees, or creating a competitive environment that pits people against each other. It's important to prevent or change a hostile work environment if it arises because those conditions are not conducive to high-quality work or job satisfaction.
Ignoring conflicts of interest: Conflicts of interest in the workplace can be unethical and contribute to a hostile workplace. If an employee notices a coworker or manager acting in a way that seems like a conflict of interest, they should report it.
Taking sides in an employee argument: Employees will argue or disagree at times, but ethically, management should remain neutral. It is the manager's responsibility to hear both sides of the story and come to a solution that works best for both parties and the business.