Business Ethics

In this chapter, we define business ethics as the principles and standards that determine acceptable conduct in business organizations. The acceptability of behaviour in

business is determined by customers, competitors, government regulators, interest

groups, and the public, as well as each individual’s personal moral principles and values. For example, the Competition Bureau of Canada announced on August 18,

2003, that Akzo Nobel Chemicals BV pleaded guilty in the Federal Court of Canada

and was sentenced to fines totalling $2.9 million for its part in conspiracies to fix

prices in the market for an important animal feed additive and a chemical used in

numerous commercial and consumer products.2

Many consumers and social advocates believe that businesses should not only

make a profit but also consider the social implications of their activities. We define

social responsibility as a business’s obligation to maximize its positive impact and

minimize its negative impact on society. Although many people use the terms social

responsibility and ethics interchangeably, they do not mean the same thing. Business

ethics relates to an individual’s or a work group’s decisions that society evaluates as

right or wrong, whereas social responsibility is a broader concept that concerns the

impact of the entire business’s activities on society. From an ethical perspective, for example, we may be concerned about a health care organization or practitioner overcharging the provincial government for medical services. From a social responsibility

perspective, we might be concerned about the impact that this overcharging will have

on the ability of the health care system to provide adequate services for all citizens