Business ethics fundamentally operates along two primary dimensions: normative and descriptive.
According to defining principles, business ethics refers to contemporary organizational standards, principles, sets of values and norms that govern the actions and behavior of an individual in the business organization. The field of business ethics explores these concepts through different lenses, leading to its two main dimensions.
Understanding the Two Dimensions
To fully grasp business ethics, it's crucial to understand these distinct but related dimensions:
Normative Business Ethics: What Should Be
This dimension focuses on establishing ethical guidelines, principles, and standards that should govern business conduct. It's concerned with defining right and wrong behavior in the business world and determining how individuals and organizations ought to act.
- Focus: Moral principles, values, duties, and rights in a business context.
- Goal: To provide frameworks for ethical decision-making and evaluate business practices against these standards.
- Key Activities: Developing codes of conduct, creating ethical policies, applying ethical theories (like utilitarianism, deontology, virtue ethics) to business dilemmas.
- Practical Insight: When a company debates paying a living wage versus the minimum wage, they are engaging in normative ethics by considering what they should do based on their values and principles.
Descriptive Business Ethics: What Is
This dimension focuses on examining and describing the ethical practices, beliefs, and behaviors that actually exist within companies, industries, and the business world at large. It is an empirical approach, analyzing how ethical decisions are made and the factors influencing behavior, without necessarily making moral judgments.
- Focus: Actual ethical practices, beliefs, and behaviors observed in business.
- Goal: To understand and explain ethical phenomena in organizations, including ethical lapses and successes.
- Key Activities: Conducting research on corporate culture, studying how employees perceive ethical issues, analyzing historical cases of ethical or unethical behavior, surveying public attitudes towards business ethics.
- Practical Insight: A researcher studying why employees in a particular industry engage in common unethical practices (like padding expense reports) is working within the realm of descriptive ethics – observing and explaining what is happening.
Key Differences Summarized
| Feature | Normative Business Ethics | Descriptive Business Ethics |
|---|---|---|
| Question | What should be? What is right/wrong? | What is? What is happening? |
| Approach | Prescriptive (telling how to act) | Empirical (observing and explaining) |
| Goal | Guide behavior, set standards | Understand behavior, analyze practices |
| Discipline | Philosophy, Ethics | Sociology, Psychology, Business Research |
By considering both the normative (how business should be conducted ethically) and descriptive (how business ethics is practiced in reality) dimensions, a comprehensive understanding of the role and challenges of ethics in the business environment can be achieved.
