Economic Ethics

Deciding ethical issues in a global economic context may be more complicated than in an earlier age, but the main concepts and terms still apply.

Ethics strives to answer questions such as “How should I/we decide and act?” Ethics looks for norms, values, and virtues in order to distinguish what is good and bad. Ethical behavior strives to enable a life in dignity for all. Ethics encompasses all sectors of life such as family ethics, medical ethics, political ethics, or environmental ethics.

Economic ethics, as one major domain of ethics, looks for value-based responsible decisions and actions in all economic activities. It considers norms, values, and virtues in the production, trade, consumption, and recycling of goods and services. Economic ethics includes three levels: the micro (small) level of individuals, private households, and small groups; the meso (middle) level of companies and organizations; and the macro (large) level of states, international institutions, and the economic systems as such.

Business ethics is mainly understood as ethical decisions within companies and in the relationships between companies and their stakeholders and the broader society. In North American and British areas, the term economic ethics is rather used for the macro level and business ethics for the meso and the micro levels, whereas in continental Europe and Asia, economic ethics is often used for all three levels.

Corporate social responsibility (CSR) looks specifically at the effects of business on society, in addition to the classical role within the company and its shareholders. CSR includes mandatory requirements such as economic profitability and legal obligations but also voluntary measures such as ethical codes and standards above mandatory obligations up to philanthropic social engagement. There are multiple concepts and “no consensus definition of CSR” (Crane, McWilliams, Matten, Moon, & Siegel, 2008, p. 569). CSR is enlarged to corporate social and environmental responsibility. Corporate sustainability, corporate citizenship, and socially responsible investments are related concepts. In new theoretical and practical developments, corporate social responsibility, corporate social and environmental responsibility, corporate sustainability, corporate citizenship, and socially responsible investments are integrated in a holistic view of companies' responsibility within the broader, comprehensive term corporate responsibility.

Governance and corporate governance are key dimensions within economic and business ethics looking at the governing structures of a company or an institution such as the role of shareholders, board and management, sharing and control of power, transparency and accountability of decisions. Leadership ethics and responsible leadership are part of governance ethics.

Three types of ethics are distinguished in all these fields of ethics: Descriptive ethics describes existing norms and decisions (what is) with empirical methods. Normative ethics looks for normative orientation/benchmarks/values (what should be). Meta-ethics includes the theories and methodologies in the field of ethics.

Three levels encompass all these fields of ethics: Individual ethics deals with individual decisions and actions, interpersonal ethics with direct decisions and actions between persons, and structural ethics with decisions and direct actions through institutional, legal, and structural instruments.