Req 3c — Business Ethics

What Are Business Ethics?

Ethics are the principles that help you decide what is right and what is wrong. In business, ethics guide how a company treats its customers, employees, competitors, and community. Business ethics are the rules — written and unwritten — that ensure a company acts honestly, fairly, and responsibly.

Every business decision has an ethical dimension. Should we use cheaper materials even if they are lower quality? Should we raise prices during a shortage? Should we lay off workers to increase profits? There is often a tension between what is most profitable and what is most ethical, and how a business navigates that tension defines its character.

Why Ethics Matter in Business

Trust Is the Foundation of Commerce

Customers buy from businesses they trust. Employees work harder for companies they respect. Investors put money into organizations they believe will act responsibly. When a business behaves unethically, it erodes trust — and once trust is lost, it is extremely hard to rebuild.

Reputation Is a Business Asset

A company’s reputation is one of its most valuable assets. A single scandal — a product recall, a fraud case, an environmental disaster caused by negligence — can destroy decades of goodwill. Ethical behavior protects that reputation.

The Law Is Not Enough

Many things are legal but not ethical. A company might find a loophole that lets it avoid paying taxes, or it might use deceptive advertising that technically does not break any law. Just because something is legal does not mean it is right. Ethical businesses go beyond what the law requires and ask, “Is this the right thing to do?”

Ethics in Action: Common Dilemmas

Here are some real-world ethical situations businesses face:

Honesty in Advertising

Is it ethical to show a product looking better than it actually is? To make claims that are technically true but misleading? Ethical businesses advertise honestly, even when exaggeration might boost short-term sales.

Treatment of Employees

Is it ethical to pay workers the absolute minimum, schedule them unpredictably, or avoid offering benefits? Companies that treat employees well tend to have lower turnover, higher morale, and better customer service.

Environmental Responsibility

Is it ethical to cut costs by dumping waste or using polluting processes, even when it is technically legal? Ethical businesses consider their environmental impact as part of every decision.

Data Privacy

Is it ethical to collect, sell, or misuse customer data? In the digital age, companies hold enormous amounts of personal information. How they use (or protect) that data is a major ethical issue.

Fair Competition

Is it ethical to copy a competitor’s product, spread false information about a rival, or use monopoly power to crush smaller businesses? Fair competition keeps the free enterprise system healthy.

How the Scout Law Connects

The Scout Law is essentially a code of ethics. Many of its points translate directly to business:

• Trustworthy — Keep your promises to customers and business partners.
• Loyal — Stand by your employees and community, not just your bottom line.
• Helpful — Create products and services that genuinely solve problems.
• Friendly — Build positive relationships with everyone you do business with.
• Kind — Consider the impact of your decisions on others.
• Obedient — Follow the law and your industry’s standards.
• Brave — Make the right choice even when it costs you money.

Building an Ethical Business Culture

Ethics in business does not happen by accident. Companies that consistently behave ethically usually have:

• A written code of ethics that employees at all levels are expected to follow
• Training programs that help employees recognize and handle ethical dilemmas
• Open communication — employees feel safe reporting concerns without fear of retaliation (called whistleblower protection)
• Leaders who model ethical behavior — ethics starts at the top

You have explored the ethical side of business. Now let’s compare two very different ways to run a business — on the street and on the screen.