Business Ethics

A business is a productive organization—an organization whose purpose is to create goods and services for sale, usually at a profit. Business is also an activity. One entity (e.g., a person, an organization) “does business” with another when it exchanges a good or service for valuable consideration. Business ethics can thus be understood as the study of the ethical dimensions of productive organizations and commercial activities. This includes ethical analyses of the production, distribution, marketing, sale, and consumption of goods and services (see also Donaldson & Walsh 2015).

Questions in business ethics are important and relevant to everyone. This is because almost all of us “do business”—i.e., engage in a commercial transaction—almost every day. Moreover, many of us spend a major portion of our lives engaged in, or preparing to engage in, productive activity, on our own or as part of productive organizations. Business activity shapes the world we live in, sometimes for good and sometimes for ill.

Business ethics is a huge field. Philosophers from Aristotle to Rawls have defended positions on topics which can be understood as part of business ethics. At present, there are at least five journals devoted to the field (Business Ethics Quarterly, Business Ethics: A European Review, Business & Society, Business & Society Review, Journal of Business Ethics), and work in business ethics appears in mainstream philosophy and social science journals as well.

This entry summarizes important research on central questions in business ethics, including: In whose interests should firms be managed? Who should manage them? What do firms owe their workers, and what do workers owe their firms? What moral rules should guide firms’ engagement with customers? Should firms try to solve social problems? What responsibility do they have for the behavior of their suppliers? What role should firms play in the political process? Given the vastness of the field, of necessity certain questions in business ethics are not addressed here.

• 1. Varieties of business ethics
• 2. Corporate moral agency
• 3. The ends and means of corporate governance
  • 3.1 Ends: shareholder primacy or stakeholder balance?
  • 3.2 Means: control by shareholders or others too?
• 4. Popular frameworks for business ethics
• 5. Firms and consumers
  • 5.1 What should be for sale?
  • 5.2 Product safety and liability
  • 5.3 Advertising
  • 5.4 Sales and negotiation
  • 5.5 Pricing
• 6. Firms and workers
  • 6.1 Hiring and firing
  • 6.2 Pay
  • 6.3 Meaningful work
  • 6.4 Whistleblowing
• 7. The firm in society
  • 7.1 Corporate social responsibility
  • 7.2 Firms, governments, and political CSR
  • 7.3 International business
• 8. The status of business ethics
• Bibliography
• Academic Tools
• Other Internet Resources
• Related Entries

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