Background: What is Business Ethics?

What Is Business Ethics?

Its usually weird when I tell people I teach business ethics. They are confused: aren't successful business people successful because they are greedy? And isn't ethics about caring about other people? So how could those two concepts go together? I hope to show by the end of this course that such a response misunderstands both the nature of business and ethics.

Part of the confusion is that people assume that a business ethics course is more or less me warning you about the badness of business scandals or corruption, such as Enron's accounting scandal and eventual bankruptcy in 2001, or Bernard Madoff's investment ponzi scheme that was discovered in 2008. But these are examples of fraud, and intentionally breaking the law, and in this class I'm not interested in talking about things that are obviously a bad idea (although business ethics is interested in the kinds of organizational cultures that lead to fraud and illegal activity). 

And what if your question is about how not to break the law when the legal requirements are not obvious? For example, if you have a question about when to amortize something verses when to depreciate it. Well, don't ask me, ask your accounting professor! I might be able to guess, but she will know.

So what is this class about? What do we study when we study business ethics? Well, I gave you two definitions of ethics - the formal one (ethics is the study of if and how to justify moral judgments), and my personal one (ethics is the study of human well-being). If you extend my personal definition of ethics to business ethics, you have what I think is a very good definition: business ethics is the study of how business activity affects human well-being.

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