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It applies to all aspects of business conduct and is relevant to the conduct of individuals and entire organizations. Business ethics refers to contemporary organizational standards, principles, sets of values and norms that govern the actions and behavior of an individual in the business organization. Interest in business ethics accelerated dramatically during the 1980s and 1990s, both within major corporations and within academia. For example, most major corporations today promote their commitment to non-economic values under headings such as ethics codes and social responsibility charters.
Adam Smith said, “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. Governments use laws and regulations to point business behavior in what they perceive to be beneficial directions. Ethics implicitly regulates areas and details of behavior that lie beyond governmental control.
Maintaining an ethical status is the responsibility of the manager of the business. Business ethics reflect the norms of each historical period. As time passes, norms evolve, causing accepted behaviors to become objectionable.
Business ethics and the resulting behavior evolved as well. The term ‘business ethics’ came into common use in the United States in the early 1970s.