What Are the Different Challenges in Business Ethics?

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  • Written By: Marlene Garcia
  • Edited By: Daniel Lindley
  • Last Modified Date: 09 April 2014
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Challenges in business ethics commonly include balancing responsibility to shareholders with social responsibility to the community and employees. Decisions that balance corporate profit against compensation to workers might also present challenges related to business ethics, especially during an economic downturn. Other challenges might revolve around philanthropic activities that contribute to the economic good of the community. These challenges might also involve legal compliance with laws and regulations.

Executive pay and the distribution of wealth might prompt discussion about the challenges in business ethics. Some critics say multimillion dollar bonuses and benefit packages for executives should be linked to actual contributions to the company. The ratio of pay between upper-level management, shareholders, and lower-level employees might create challenges for business ethics.

Working conditions and outsourcing represent additional challenges company owners might face. In some firms, executives who successfully increase profits by moving operations overseas might be rewarded, even though it puts people out of work. If employee pay and benefits are cut while executives receive bonuses based on the savings, it might be classified as an ethical dilemma. Both situations typically bring up challenges in business ethics.


Ethics might also involve attempts to hire employees who share company values regarding the environment and dealing with customers. Challenges in business ethics include identifying and recruiting workers without regard to sex, age, or ethnic background. Once hired, a company operating ethically usually attempts to share power and leadership through training programs. Training might include giving employees tools to solve ethical dilemmas on the job.

In the area of compliance, challenges in business ethics might include going beyond adherence to laws and regulations. For example, a firm might follow environmental law because it is required, but an ethically responsible company might improve the environment because it’s the right thing to do as a corporate citizen. The company operating within a strict code of ethics typically makes decisions that improve the community instead of decisions based solely on profits.

Other issues that crop up as ethical concerns might center on conflicts of interest and corruption. News stories about some large corporations cheating investors in high-profile scandals have often brought business ethics to the forefront. Other instances might involve political contributions in an attempt to sway regulators to relax compliance laws.


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