Business Law Ethics And Business Decision Making

Last Updated: 17 May 2021
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The need for an organization to embrace ethical approach in conducting its business into competitive and dynamic business environment is an approach for managing high risk involve in contemporary business. Decisions that are vital and adequate in the business to reach its organizations goals are reached when stakeholders and members of the organization’s management do those things that are rights and which it is lawful and moral for them to put in place.

Ethical practice in workplace is all about doing those right and moral business practices that tends to engender the acceptance of organization to its customer and members of the public. According to Zablow (2006), “There is growing evidence that a broad cross-section of stakeholders, including shareholders, regulators, law enforcement, leaders, insurance underwriters, analysts and bond raters are willing to reward organizations that have a proven commitment to integrity”.

The above quote goes to show there are rewards and advantages associated when an organization follows and practice the business ethics associated with the kind of business that is operated. Indeed the set objectives of the business organization cannot be achieved unless the employees of the business enterprise demonstrate the appropriate ethical behaviors in the execution of assigned duties, ultimately enhancing the corporate image of the business outfits in the environment where it operates (NIM, 2005).

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Sometimes what constitute ethical practice is usually interpreted subjectively. What is good to an individual may turn out to be not too pleasant. Moral and ethic (Ethos) usually steams from societal cultural practice. Ethical practices are what constitute values that are generally accepted by the society. This is also applicable to business ethical practices. What is right practice that is generally accepted by all stakeholders in an industry goes a long way in acting as a pointer to how the ethical business practice of such business is coined. This write up will give an exploratory insight on how business ethics aid organizational decision-making.

Business Ethics

Ethics are those practices that are regarded as good, based on moral law. Business ethics thus involve moral laws that pertain to the following;

  1. A high sense of self awareness and management involving time management, life goals programming, personal grooming and consciousness, human relations, striving for excellence, and self discipline.
  2. A high sense of responsibility and loyalty towards ones own roles, towards superiors and subordinates, towards company customers and suppliers, towards the acquisition and use of other resources, and those directed towards one’s own family, community and country.
  3. A high sense of probity in dealing with confidential matters, handling company finances, in very different situations, and
  4. A high sense of accountability for authority and roles played, for resources utilized, and for the time spent in building up the business operations (NIM, 2005).

Involves choosing a pathway among alternatives. Organization make decisions which are routine, daily in nature, operational or strategic in nature; which has to do with the corporate or organizational plan on how to operate and carry out its function in order to effectively and efficiently attain its objectives and goals.

These decisions sometimes result in consequences that are not favorable to the organization.  Sometimes the organization stands to pay dearly for embarking on the wrong decision, or making a nice decision at the wrong time. Business organizations engage in decision making in every aspect of its operations. This include organizational managerial decision making on planning, organizing, directing, staffing, coordinating, reporting and budgeting.

How Business Ethics Aid Organization in Its Decision Making Process

Most business actions and choices, decision and judgments have ethical aspects. These, thus, involve specifically ethical values to help people or affect their lives negatively, or indicate their character, or all of them combined. For instance, “hiring and firing, choosing suppliers, setting prices, establishing objectives, allocating resources, determining dividends, disciplining workers, planning schedules, awarding contracts…all of these involves ethical choices” (Sternberg Elaire 2000).

When employees of a business organization engage in doing the right practices, these tend to make the business to grow in its operations and achieve its organizational objectives and goals. Right decision-making brings about this desired height for the organization. Thus, it becomes necessary that an organization engage its employee in conducting their official duties inline with the ethical standard in place. In this view, Zablow (2006) argues that each new employee to a business organization should be met with a specific ethics message from the organization’s management.

This should include a discussion of organizational culture and values, prescriptive models for ethical behavior (code of ethics), internal ethics support, zero tolerance for unethical conduct, reward / incentives for ethical behavior, confidential reporting mechanisms, and the organization’s support and commitment to its ethics program. When employees are all engross in conducting their official functions based on ethical standard set in the business the right decisions who be attained in most cases.

Following ethical practices remove in business favoritism, nepotism, bribery, self-centered decision, and transactions based on clandestine motives that tend to inhibit the growth of such business. Rightful decisions are easily reached when members of a business organization engage in ethical practice. Through ethical principles, decision makers in a business organization reach the right decisions. Those principles that aid organization’s decision, that are independent and ultimate to business ethics, include:

  1. Principle of solidarity: where business decision makers foresee the need and imbibe in the promotion of the well-being of all human being;
  2. Principle of rationality: where business decision makers should always strive to act intelligently;
  3. Principle of fairness or impartiality: where decision makers in business should apply the same standards in judging their own actions, those of other people, and even people dear to them;
  4. Principle of efficiency: decision makers should not only try to fulfill good intensions, but must endeavor to use effective means;
  5. Principle of refrain from willing harm to others: decision makers should never choose decision that would directed harm others;
  6. Principle of role responsibility: decision makers should note that they do not have all responsibility for all aspects of human well being. They should therefore, be committed to roles, capacities, and give responsibility for certain aspects of the well being of certain people (Elegido, 1996).

When decision makers acknowledges the aforementioned principles associated with business ethics they tend to come up with the right decision that would contribute positively to improving the conducive internal working environment, external relationship with customers and other stakeholders to the business, and growth of the business.

Building Decision Framework Through Business Ethical Model

Business ethics aid up organizational decision-making through the provision for decision makers the course of action to follow. Business ethics are guideline for doing the right thing. Thus, it constitutes a path through which decision makers can follow in arriving at the right decision. According to Zablow (2006), “…decision-making methodologies provide an organizational framework for determining the facts of a given situation; identifying the alternatives and consequences of each contemplated actions; choosing a course of action; implementing the decision; and evaluating its outcome”.

The structural framework of business decision, weather routine decision, operational decisions, and technical decisions would determine the implementation would be and what course it will take. Thus, when the wrong framework is built around a decision, even when it is an effective and genuine one it tends not to attain the set targets outlined by the decision maker. Business ethics, thus, provide the right decision path to follow by laying the framework for which the decision maker should follow to arrive at the right decision.

Reaching the Right Decision on How to Solve Business Ethical Problems

As earlier mentioned in the introductory part, what constitute moral and the right way to do things to one individual may not be accepted by another. Thus, through business ethics the right decisions are raised in solving ethical problems.

Sternberg (2000) has it that “an ethical decision model clearly sets out that principle of business ethics to help business both in identifying and actually resolving business ethics problems”. Ethical model can aid business reach decision in solving its ethical problem by clarifying and making explicit the ambiguity on conceptual issues. This thus, helps business to avoid wasting its resources on spurious problems and unwarranted guilt.


Making the right decision goes a long way to safe an organization from wastages and unnecessary cost. Business ethics provides the right framework and path on which decision makers in an organization formulates and implement right and effective decisions.  Business ethics, thus, is significant in illuminating the real situation in a business, and what alternate course of action might be taken and it goes ahead to indicate that information that is relevant and those to be ignored in the organization decision-making process.


  1. Elegido, J. M. (1996), Fundamentals of Business Ethics: A Developing Country Perspective. Spectrum Books
  2. NIM (2005) “Business Ethics and Social responsibility (SMPE 203)” Nigerian Institute of Management (Chartered).
  3. Sternberg Elaine (2000) Just Business: Business Ethics in Action Second Edition
  4. Zablow, Robin J. (2006), “Creating and Sustaining an ethical Workplace” Risk management, Volume 53, Issue 9, Sep. ABI/INFORM Global P.26

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Business Law Ethics And Business Decision Making. (2018, Jan 10). Retrieved from

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