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7
Ethics in business 
7.1 Businesses and ethics 
Ethics in business: 
'The application of ethical values to business behaviour'. 
Businesses also have ethical values, based on the 
norms
and 
standards
of 
behaviour
that their leaders 
believe will best help them express their identity and achieve their objectives. Some of these ethical 
values may be 
explicit
; for example, expressed in a mission statement or in employee training 
programmes. Others may be 
unwritten
rules and customs
that form part of the organisation's culture: 
'the way we do things around here'. 
Business life is a fruitful source of 
ethical dilemmas
because its whole purpose is material gain, the 
making of profit. Success in business requires a constant, avid search for potential advantage over others 
and business people are under pressure to do whatever yields such advantage.
The table below summarises 
three elements
to ethics. 
Element 
Explanation 
I
Ethics concern an 
individual
's professional responsibility to act. 
DO
Ethics concern the 'real world' practical actions an individual can take. It is important to 
consider 
how
an individual acts and not always 
what
they do.
BEST
Ethics concern 
choices
between different courses of action. These may involve taking a 
course of action which is less unpalatable than another. 
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PART F: PROFESSIONAL ETHICS IN ACCOUNTING AND BUSINESS 
 
500
 
7.1.1 An issue of trust 
Whatever the situation, there is a public expectation (especially regarding professionals) that organisations 
will act ethically. This is known as the 
'Trust me'
model and was the case for many years when most 
businesses were owned by families. Times have now changed and most companies are now run by 
directors and mangers rather than fathers and sons and the model changed to 
'Involve me'
as more 
evidence was needed of their ethical credentials. 
In recent times, trust in business has fallen and increasingly more evidence is required to demonstrate it. 
The