Role of ethical behavior by participants in the world market-based economy


Religion and Ethics


May, 2021


The important role of ethical behavior by participants in the world market-based economy has been known for a very long period. Adam Smith, the father of economics, said every man as long as the law of justice is not violated, is left to work towards his personal interest in his own way. The ethical failures show the destructiveness of unethical behavior. Recently, the role of ethical failures in contributing to the global financial crisis of 2008-2009 has demonstrated that the viability of the entire global economic system relies upon market participants observing certain basic ethical standards. The rate at which market innovation proceeds make it extremely difficulty, Therefore, for an effective market system, moral and ethical are necessary. Partly in response to the ethical failures that have plagued business in recent years, there has been a resurgent interest in spirituality and religion in the workplace, after a long period in which “…religion and spirituality have been literally exorcised from modern forms of institutional organization. In 1997, Business Ethics devoted a special issue to religion and business ethics. In 1999, the Academy of Management created a “Management, Spirituality and Religion” interest group with the stated purpose “to encourage professional scholarship between management, spirituality and religion.” In 2004, a publication by Business and Professional Ethics on an issue majoring on Christian perspectives on business ethics. Some academic journals like Journal of Management, Business Spirit Journal and Spirituality and Religion majored to explore the intersection of business affairs and religion. A number of scholarly articles have addressed the issues of workplace spirituality and the integration of religion with business practice.

Religion is one of the more frequently mentioned determinants of the moral values that underpin ethical standards. The major world religions have moral teachings and in various ways indicate disapproval of unethical actions. Most religious practices teach that God observes human actions and is accountable for their actions. Therefore, it is logical to assume that adherents to a religion would be less tolerant of unethical behavior. This assumption has been called into question, however, by high-profile CEOs such as Bernard Ebbers of WorldCom and Ken Lay of Enron who were outspoken Christians at the time that the corporations that they directed were being destroyed by the consequences of unethical business practices. Also, some empirical research has failed to find a strongly positive relationship between religious belief and ethical attitudes. For example, Clark and Dawson find that the religious, defined as those who have high scores on the Intrinisic/Extrinsic Revised Scale of religiousness developed by Gorsuch and McPherson, have lower levels of ethical sensitivity. Kidwell, Stevens and Bethke in a survey of 50 male and 50 female business managers detect no significant differences in the ethical judgments of respondents based on either frequency of church attendance.

Despite interest in the influence of religion on economic activity by early economists like Adam Smith, modern economists have done little research on the subject. In light of the apparent religious fervor in many parts of the global economy, economists’ seeming lack of interest in studying how religious cultures enhance or retard the globalization of economic activity is especially surprising.

What is business ethics?

Business is described as an activity done by humans to produce or acquire wealth where he buys and sells goods. Business ethics and values are important for the successful development of a business organization. Ethics in business refer to a code of standard by which one can determine what is wrong and what is right for the business enterprise. Fairness, integrity, commitment to agreements, broadmindedness, considerateness, importance given to human esteem and self-respect and many such principles determine business ethics.

Business ethics generally deals with what is right or wrong in the business, attention to business ethics is necessary during times of fundamental change as the moral values that were not taken seriously are strongly questioned at that time’. It is business ethics that enables the leaders and employees to act in times of crisis and confusion in the business. Business ethics is a method of dealing with unclear business problems:

Managerial misbehavior

Managerial misbehavior includes illegal and unethical practices involved in the management of an organization.

Moral mazes

It is a part of business ethics which deals with the ‘moral mazes of management’. It includes ethical problems, such as conflicts of interest, misconduct of contracts and agreements and the illegal use of resources. After the birth of the social responsibility movement in 1960, business ethics has become a management discipline. This movement helped solve various social problems, such as poverty, crime and illiteracy by using the finance of business class people.

What is the importance of ethics in business?

Business ethics is something other than an idea used to upgrade the reputation of a company. Business ethics are the simple establishment of success and ethics ought to be applied from the specific minute a firm opens itself. Business ethics really comprises the activities of people working inside organizations.

Individual behavior and business ethics

The individuals who think that rules do not generally apply to them regularly view the topic of ethics as theoretical or relative. Laws and regulations apply to everybody, as do principles of good and bad conduct. Every individual’s activities inside the organization influences both the individual and the whole association. At the point when an individual behaves morally and responsibly, it helps the whole association.

Pioneers set the style for ethics in their associations. Tragically, a few individuals in the more elite classes of the company order choose to act dishonestly and unethically, however it is a reality of business and same when considering life. Consequently, it is vital for a business to be cautious about the individuals they promote within the organization. At the point when the imperfect kinds of individuals are set to be promoted in an association, it shows something specific that exploitative conduct is not just endured, it is appreciated. Organizations appearing to be high class can’t bear to have pioneers who have negative attitudes towards ethics.

Social responsibility

Corporate social duty is an expression vigorously utilized in the world of businesses. Corporate social duty alludes to business practices and activities that will benefit the society and not simply the organization.

For example, organizations that pay attention to vitality proficiency and activities that provide an advantage to nature are trying out social responsibilities. So are organizations that have incredible labor practices. Corporate social duty is a fundamental piece of business ethics and ought to be applied by all firms, regardless of whether expansive or little.

Corporate social duty includes every person inside an organization participating in offering back to the organization. Along these lines, the whole organization is adding to society and behaving ethically. To comprehend the significance of ethics in business, it’s critical to acknowledge how business ethics influence those included. Moral and unethical conduct specifically impacts the association as well as the community and society on the loose

What are the ethical and moral issues in business today?

In the complex global business environment of the 21st century, companies of every size face a multitude of ethical issues. Businesses have the responsibility to develop codes of conduct and ethics that every member of the organization must abide by and put into action. Fundamental ethical issues include concepts such and integrity and trust, but issues that are more complex include accommodating diversity, decision-making, compliance and governance.

Fundamental Issues

The most fundamental or essential ethical issues that businesses must face are integrity and trust. A basic understanding of integrity includes the idea of conducting your business affairs with honesty and a commitment to treating every customer fairly. When customers perceive that a company is exhibiting an unwavering commitment to ethical business practices, a high level of trust can develop between the business and the people it seeks to serve. A relationship of trust between you and your customers may be a key determinant to your company’s success.

Diversity Issues

According to the HSBC Group, “the world is a rich and diverse place full of interesting cultures and people, who should be treated with respect and from whom there is a great deal to learn.” An ethical response to diversity begins with recruiting a diverse workforce, enforces equal opportunity in all training programs and is fulfilled when every employee is able to enjoy a respectful workplace environment that values their contributions. Maximizing the value of each employees’ contribution is a key element in your business’s success.

Decision-Making Issues

According to Santa Clara University, the following framework for ethical decision-making is a useful method for exploring ethical dilemmas and identifying ethical courses of action: “recognizes an ethical issue, gets the facts, evaluates alternative actions, makes a decision and tests it and reflects on the outcome.” Ethical decision-making processes should center on protecting employee and customer rights, making sure all business operations are fair and just, protecting the common good and making sure individual values and beliefs of workers are protected.

Compliance and Governance Issues

Businesses are expected to fully comply with environmental laws, federal and state safety regulations, fiscal and monetary reporting statutes and all applicable civil rights laws. The Aluminum Company of America’s approach to compliance issues states, “no one may ask any employee to break the law, or go against company values, policies and procedures.” ALCOA’s commitment to compliance is underpinned by the company’s approach to corporate governance; “we expect all directors, officers and other Alcoans to conduct business in compliance with our Business Conduct Policies.”

The American Journal of Economics and Sociology © 2007 American Journal of Economics and Sociology, Inc.
Adam Smith, Wealth of Nations (Random House, Inc., 1937), 651, emphasis added.

David Kim, Dan Fisher and David McCalman, “Modernism, Christianity, and Business Ethics: A Worldview Perspective,” Journal of Business Ethics Online First 90 (2009), (accessed March 29, 2009), p. 1.

Business Ethics Quarterly, 7 (1997).

The Academy of Management, 2003

Business and Professional Ethics Journal, 23 (2004).

See Anusorn Singhapakdi, Janet K. Marta, Kumar C. Rallapalli, and C. P. Rao, “Toward an Understanding of Religiousness and Marketing Ethics: An Empirical Study,” Journal of Business Ethics 27 (2000): 305-19; Kam-hon Lee, Dennis P. McCann and Mary Ann Ching, Journal of Religion and Business Ethics, Vol. 1 [2009], Art. 5


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