Modern business world is fraught with scandals that indicate the need for a better and more thorough understanding and application of business ethics. During the recent economic crisis, managers, company owners and other actors were revealed to conduct questionable, oftentimes illegal transactions as means to acquire more wealth. This has lowered the perception of businesses, managers and company owners in the public's eye, sowing distrust and suspicion about the, mostly, legitimate business practices (Noddings, 2013; Fromm, 2013; Niebuhr, 2013).
The concept of ethics has been incorporated into the business strategy for a long time. However, it cannot be denied that the need for success, which is the main motivator of business often requires managers and other actors to perform actions that can only be described as unethical. The expansion of the conciousness about the importance of ethics in business, however, has permeated almost all segments of industry in the developed world and managers are increasingly scrutinized if they do not adhere to the ethical norms and principles. There is, however, a significant gap between theory and practice, leaving ample room for dubious activities Sand ethically questionable business decisions (Noddings, 2013; Fromm, 2013; Niebuhr, 2013). It is the purpose of this paper to delineate the main theories of ethical conduct and identify the existing gaps in knowledge and practice that make it possible for managers and business owners to circumvent them.
2. Theory of ethical conduct
2.1. Basic principles
The main goal of ethics is to determine how and why people act, to determine the rules of morality, which are usually called ethical code or ethical principles. These principles encompass the rules and policies with which one governs behavior. From a practical standpoint, ethics can be defined as a codex of moral principles and values which govern the behavior or an individual or a group with respect to what is good and bad (Noddings, 2013; Fromm, 2013; Niebuhr, 2013).
The origin of the word ethics comes from the greek word ethos, which means custom, temper, and is usually used to signify the research of morality. The main goal of ethics is to familiarize one with its basic principles, but also to allow one to take a critical stance towards the existing moral codes – in other words, to determine what is wrong and then act on changing that particular code (Noddings, 2013; Fromm, 2013; Niebuhr, 2013)....
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