Next video:
Loading the player...

Business ethics is the system of laws and guidelines by which business professionals and corporations operate in a fair, legal and moral fashion. It’s a broad topic, covering everything from a corporation’s responsibilities to the public (corporate social responsibility), to specific laws prohibiting illegal practices in the workplace.

When ethical guidelines are followed, trust develops between workers and management, as well as between the public and the corporation. Thus, business ethics lead to a more productive workplace.

Most corporations have a policy limiting the size of gifts given to customers to a small monetary amount. For example, you can give a customer a dozen golf balls, but not a new set of golf clubs. This is to prevent kickbacks or bribes. If the customer is going to do business with you, it’s because your product or service is needed, not because you gave them incentives outside the core business of the company.

The Foreign Corrupt Practices Act was created in 1977 in response to a rash of U. S. companies bribing foreign government officials to award contracts to their businesses. The act forbids corporations and business executives from paying money or other valuables to foreign governments and officials in order to secure business. 

Related Articles
  1. Financial Advisor

    Asset Manager Ethics: Acting Professionally and Ethically

    To aid managers in understanding the requirements for ethical and professional behavior, we offer some basic guidelines.
  2. Personal Finance

    Standards and Ethics for Financial Professionals

    Learn basic principles of financial standards, and unethical behavior of a financial professional's career and how these circumstances should be handled.
  3. Investing

    How to Use Ethical Investing to Invest in Your Beliefs

    These steps will help you invest ethically without jeopardizing your financial goals.
  4. Investing

    Socially Responsible Mutual Funds

    It is possible to avoid unethical investments and still profit from mutual funds. Find out how!
  5. Small Business

    The 3 Moral Types Managing Your Money

    Your financial fate is influenced very substantially by whether your broker or firm is immoral, amoral or moral.
  6. Financial Advisor

    Ethical Issues For Financial Advisors

    Explore some common ethical dilemmas investment professionals may face, and find help and guidance on how you can tackle them.
  7. Investing

    A Financial Advisor’s Top Ethics-Based ETFs

    A growing method of practicing SRI is through a strategy called ethical investing, where an investor actively eliminates ETF funds based on their ethics.
Trading Center