Business Ethics for the 21st Century

The study of business ethics and public policy is central to Lamar University’s online Bachelor of Business Administration (BBA) in General Business degree program. Ethical decision-making has always been at the core of responsible business practices. Yet, the current state of social justice movements, economic volatility, uncertainty, privacy concerns and circumstances surrounding the pandemic make ethics more important than ever.

How Are Modern Business Ethics Changing?

Business ethics do not exist in a vacuum. They reflect the cultural, social, environmental and economic conditions of the times.

In modern times, these conditions are in constant flux. Climate change drives environmental ethics. Mass events and crises like the COVID-19 pandemic drive awareness of factors like economic inequities, unequal access to healthcare, and political divisions. Incidents of police brutality, like the killing of George Floyd, spur civil unrest and social movements for racial justice and criminal justice reform.

As public opinions, morals and values evolve, so do business ethics. For instance, taking advantage of loopholes in tax law to minimize a corporation’s tax liability was once considered smart business. Nowadays, this approach comes with connotations of economic injustice, greed and a perpetration of economic inequity.

Modern consumers and employees alike expect a lot out of a company in terms of corporate responsibility. Consumers choose the companies they support based on their demonstrated values. Talented employees often choose where they will work based on values alignment.

These days, businesses that do not stand in solidarity with the Black Lives Matter movement can expect censure from a large part of the populace. A social media platform that fails to address racist content may see employees going on strike in protest and users terminating their accounts.

The list goes on. All these factors and changing conditions play into a company’s evolving code of ethics, the set of moral principles that guides its business operations.

How Are a Company’s Ethics Judged by the Public?

A company’s ethics and social values live in its policies, messaging and actions. This means the public gives weight to what a company says, to a degree. But many people base their opinions more on what a company does. How it spends money, where it advertises, where it obtains goods and services, and how it supports social justice causes all inform the public’s view.

The way a business treats its employees during the pandemic also has clear ethical implications and can drastically affect public opinion. Taking a financial hit to keep staff employed during shutdowns demonstrates empathy and commitment to the workforce. If layoffs are inevitable, resource allocation to rehire staff quickly also shows investment in the workers.

Conversely, a company that puts employees second to profits during a crisis demonstrates a lack of commitment to its human capital. When its approach is at odds with stated ethics, the public will lose trust in its messaging, with its reputation and brand loyalty taking a hit in the long term.

Do Technology and Data Privacy Influence Business Ethics?

How companies use and share personal data is under public scrutiny. Companies that give the impression of misusing or profiting from personal data without clear consent stand to lose the trust of their customers. Of course, poor data security leading to data breaches can have the same impact on public trust.

Again, the root is in ethics and how a corporation stands by its set of values and policies. Establishing and maintaining public trust involves clearly communicating those values to consumers, employees and other stakeholders. A company’s operations and actions also must reflect and support those values.

Data privacy policies should be crystal clear and transparent, allowing consumers to control exactly how companies will use their information. Access to a product or service should not be contingent on a customer’s consent to data use. Respecting consumer privacy and autonomy garners trust.

America may be slow to pass comprehensive legislation and regulations regarding data privacy, and the European Union has already done so through the General Data Protection Regulation (GDPR). Any company doing business or even having an online presence in Europe must comply with these regulations.

It is important for business leaders to consider their ethical choices carefully. Companies with a large degree of influence can use their platforms and influence to drive social change based on ethics, raising the bar for corporate social responsibility across industries.

Learn more about Lamar University’s online BBA in General Business program.


Sources:

Acuity: Business Ethics in the 21st Century

Volkov: Ethical Business Decisions in the COVID-19 Crisis

Forbes: How Much Do a Company’s Ethics Matter in the Modern Professional Climate?

European Commission: Data Protection in the EU

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