What is Business Ethics?

About thirty years ago, a hearty laugh would follow the combination of the words “military” and “intelligence.” “That’s a contradiction in terms!” was the reflexive reply, masking the scars that the atrocities of the Vietnam War had inflicted on the country.

No longer an option of last resort for young people, the military (according to surveys conducted by Harris and Forbes) is one of our most admired institutions. The modern warrior is a highly intelligent and effective ambassador of war and peace.

Today, the combination of the words “business” and “ethics” elicits more of a cry than a laugh. While the atrocities and stupidity of a few marred the reputation of the military in the past, the greed of many – consumers, bankers, politicians, and Wall Street titans to name a few – fueled the destructive forces of the Great Recession ravaging the country in the present.

Business, unlike the military, is not a profession. Anyone can go into business and participate in economic activity. To understand what business ethics really is, we need to explore this unique combination of words.

Business is economic activity and the science of economics is the study of how human beings actually behave in valuing and exchanging goods. Ethics, then, is the study of how human beings ought to behave in that same activity.

What a fascinating combination! Aligning what we actually do and what we ought to do. This is the essence of effective ethical leadership: getting your people to do what they ought to do. Business ethics should be as powerful to your success as military intelligence is to victory on the battlefield today. You can’t win in the market without it!