Role of Government in Business Ethics

Most businesses are started for two reasons: to meet a need that’s not being met, and to make money. When a business can do both, it’s a wonderful thing. However, if a business wants a more robust bottom line, sometimes it looks for ways to cut corners. If those cuts don’t affect the quality of the goods and services, that’s great.

But when the product starts to suffer and people are put at risk, this is where problems can arise. This approach can also cause problems internally. If a company expects its employees to perform their jobs in a way that might cause a conflict legally or morally, a business’ ethical reputation could be in jeopardy.

Business Ethics Defined 

Business ethics are the rules and principles that determine what is morally right and wrong in a business atmosphere. It’s the unspoken agreement that a business will conduct itself fairly and within the established rules. Many businesses operate within the proper ethical guidelines, without the need for an outside agency to step in.

However, there are also many instances in which the government has entered into the situation and has forced a company to adhere to more ethical standards. Most of the government regulatory agencies that exist do so, because a company or an entire industry has ranked profits over their workers or the environment.

Legal But Not Ethical

There are business practices that are legal but aren’t necessarily ethical. Charging $500 for a pill that cost 50 cents is legal, but ethically, it could be questioned, especially if the price point creates a challenge for those who need the medication. Providing miners with required equipment is legally compliant, but if say, the oxygen masks are shoddily made or ventilation equipment is not as up-to-date or maintained as it could be, ethically that could be a problem. Governmental agencies such as the Food and Drug Administration and The Occupational Safety and Health Administration keep businesses within legal and ethical standards.

Why Business Ethics Are Important

People do business with other people and businesses they trust. A business that is known for dealings that are fair and ethical fare better over the long haul than those who operate using less ethical practices. Although a business might be able to get away with fooling its customers for a time, eventually the underhanded operations are revealed and the company is as best vilified, at worst driven out of business.

Unethical practices can involve how a business treats its customers, but can also carry over into how the company treats its employees. For example, a business that underpays its customers while showing record profits can find themselves on the wrong side of public opinion. This can have a negative impact on a business; bottom line. Ironically, increasing profits is often the reason that unethical practices were started in the first place.