Business Ethics: History and Psychology

In our modern society, no diplomatic, political or economic relations can exist without implying the norms of the common ethics. 

Any manager should understand what does the concept of ethics rely on. That is impossible to do without the study of corporate psychology. Thus, a modern leader must also be a psychologist.

Ethics (from Greek ethos - custom, temper) - the doctrine of morality. The term "ethics" was first used by Aristotle to denote practical philosophy, which should give an answer to the question of what we should do in order to act correctly and moral.

Such concepts as justice, honor, dignity, freedom, responsibility, have an existential meaning when talking about ethics. They are vital for human existence and are filled not with abstract, but with real life norms. For the assertion of these values, people often sacrificed their lives.

Business ethics appeared around the time people started exchanging goods. The objective was to ensure an equivalent and satisfying exchange. Ethics have become an important detail of trade ever since.

This term came to be popular in the US throughout the 70s and 80s. It happened when simple people started organizing  protests against unethical enterprises. After that, the government started the legal reglementation of business ethics, which has progressively expanded around the globe. 

In 2000, The UN Global Compact introduced the worldwide business ethics guidelines. 

Nowadays,  industrialized countries pay more attention to business ethics throughout their management practice. The importance of the human factor, the psychological methods of stimulating labor, even such “details” as the style of communication between the leader and subordinate and the changing of the language of communication are highly valued. 

The art and success of business communication is largely determined by the ethical standards and principles that the leader applies in relation to his subordinates. They determine which corporate behavior is ethically acceptable and which is not. 

These norms relate primarily to how and why orders are issued in the management process. When the manager doesn’t take into account the ethics of business communication between the leader and subordinate, most employees feel uncomfortable and morally unprotected. The attitude of the leader towards his subordinates affects the whole nature of business communication, largely determines the team’s moral and psychological climate. It is at this level that moral corporate standards and patterns of behavior are formed.

The modern manager is very different from the traditional one, mostly concerning the style of his behavior. When communicating with employees, he avoids rude words, shouts, he is always friendly, always smiles, tries to address his employees by name, knows how to listen attentively to every subordinate and even dresses like them. He does not reduce his activity only to the control of quality, but strives to maintain a high level of trust within the working group. This ensures the strength of ties between its members, forms a sense of pride in its staff, creates an opportunity for the employees to show their creative abilities, prevents and successfully resolves conflicts.

If you are in the position of a director, manager, or even employee, it would be healthy to make a list of ethical rules that you would categorically not violate. Keep this list in a place where you can see it, and check it frequently. If you are the head of a company, make the list public, read it at a full staff meeting, so that every employee knows what are the business ethics rules of that place. 

Keeping yourself and others conscious of this set of rules will help you all not to be pushed out of the ethical boundaries of your company.

This way, the decisions you’ll have to take will be easier, because you’ve already analysed the pros and cons and established that you won’t do it.