International Business

Why ethics matters

As pursued in this book, ethics deals with the identification, assessment and selection of values to be used as standards for judgment and guidelines for action. Values lie at the heart of all decisions, providing the normative basis for choosing among alternative conclusions and courses of action. As a term, “ethics” is commonly misused to signify some ideal but unrealistic standard that bears little relationship to practical daily decisions. In reality, ethical analysis offers a way to examine the values that do guide daily decisions in all aspects of human life. Decisions involve choice, and choice is guided by values. Ethics matters because its methodologies offer a way to identify, understand and consciously choose among the values embodied in different judgments and actions. The fundamental importance of ethics stems from the belief that intentional, informed choice produces the best decisions and outcomes.

Explicit considerations of ethical choice often appear absent from many discussions of politics, economics and business. Yet decisions made in these fields inherently involve choices among competing and sometimes conflicting values. When the political system exacts retribution for actions adjudged wrong, some value standard determines what punishment a person justly deserves, and why. When economics traces the flow of scarce resources, some value standard determines the allocation of those resources among individuals based on distributive justice choices such as equality, contribution, effort or need. When business seeks to obtain or retain a public charter to operate within a host country, some value standard determines whether those operations offer sufficient public good to merit approval by the sanctioning authorities.

The important role of ethical choice often escapes notice because the common use of instrumental terms can obscure the value standards that actually guide political, economic and business decisions. For example, nation-state actions typically find justification in the pursuit or preservation of the “national interest, ” but the exact nature of that interest, or what values are sacrificed on its behalf, are seldom specifically identified