Business ethics as we define the term is “the ethics underpinning business”, so in order to appreciate the ethics we need to understand the different schools of philosophy on which the fundamentals of ethics are based. The fundamentals of business ethics are about the mapping of the value set into the management decisions of the business. Business ethics begins with the premise that subjective concepts like ethics and morality are consistent with the economist’s notion of rational self-interest. The problem is applying this premise to the business and to corporate management and employee behaviour. Businesses usually codify the value set into a code of ethics.
Business ethics has two aspects: one involves the specific situations in which ethical controversy arises; the other concerns the key principles of behaviour that can be applied both within the firm and across the family of stakeholders. Business ethics is not necessarily a new phenomenon. In 18th and 19th century, for example, business transactions were largely conducted on the principle of caveat emptor, a principle carried through to the 21st century. The onus is on the purchasers of goods and services to assure themselves that the products they tended purchasing were of the quality for which they would hope, and the vendor’s duty was simply to fulfil a few legal obligations