Rarely is there the individual who does not encounter an ethical or moral dilemma at some point in his or her business life. Business ethics should be distinguished from the philosophy of business, the branch of philosophy that deals with the philosophical, political, and ethical underpinnings of business and economics. Business ethics have the unappealing conflict of often being contrary to what is legal.
Modern ethics is first and foremost, the science that allows to consider human relationships, as well as to evaluate the behavior of people in terms of generally accepted norms. And when people learn early on that being unethical is okay, then to expect them to do otherwise in the workplace is foolhardy at best.
It deals with issues regarding the moral and ethical rights, duties and corporate governance between a company and its shareholders, employees, customers, media, government, suppliers and dealers. The cases of Enron and Sathyam makes a point that ethics and profits are opposed to each other, as when an organisation is ethical it makes short term profit and if the organisation is unethical it makes huge profit.
When a company has tough competitors in a limited or static market; it may engage some unethical practices just to be in business or to protect their profits. Ethical policy should address how all corporate activities are undertaken, monitored and verified to ensure that they comply with legal guidelines and ethical standards.
No matter how hard the management of a business tries to set and maintain high standards of professional ethics, these conflicts do surface at some point of time or the other. There are three major types of ethical issues that arise in a business they are, face to face ethics, corporate policy ethics and functional area ethics.