CHAPTER 1
PRINCIPLES OF BUSINESS ETHICS
Ethics form the foundation for international economic activities. Ethical guidelines are essential in
making business decisions. Business professionals have responsibilities to make decisions based
upon ethical principles. In the 21st
century, the role of ethics in international business transactions and
interactions will receive more attention.
Materials in this volume will help teachers and students to learn about, explore, and discuss ethics
and ethical issues in international business.
Principles of Business Ethics is the theme of this chapter in the Business Ethics volume. The theme is of
interest to learners and teachers of English around the world. The focus of these lessons is on the
development of language skills needed to think, discuss, and write about business ethics. The
students‘ skills will improve as interest and personal involvement in the materials and the topic
increases.BACKGROUND INFORMATION
Why discuss international business ethics? According to Donaldson, societies can and do have the
right to expect business to function ethically. People in every country in the world make an
agreement with business to carry out the necessary work to provide goods and services to society:
"All productive organizations can be viewed as engaging in an implied contract with society.‖
"Corporations must have bestowed upon them by society.... authority to own and use land and
natural resources. In return, society has the right to expect that productive organizations will enhance
the general interests of consumers and employees. Society may also expect that corporations honor
existing rights and limit their activities to accord with the bounds of justice" (1989, p. 6).
So, under this ‗social contract‘ between society and business, what rules guide business? What are the
minimal duties of business professionals? Should an international code of business ethics be
adopted? If so, what should such a code contain?
Most companies have a Code of Conduct that guides workplace behaviors. A Code of Conduct is a
description of what practices are expected of employees in the company. If employees follow the
rules of the Code of Conduct, they succeed in their jobs; if employees violate the Code of Conduct,
they may lose their jobs.
More and more companies conduct international transactions as a part of their daily operations.
International situations are particularly prone to ‗gray areas‘ because norms and practices that guide