What is Ethics? Definition, Branches, Characteristics, Nature, Sources, Dilemma

  • Post last modified:10 August 2023
  • Reading time:27 mins read
  • Post category:Business Ethics
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What is Ethics?

Ethics can be defined as a set of principles that helps in segregating fair from unfair. In other words, it is a branch of philosophy that deals with standards for right and wrong behaviour of individuals.

Ethics is a moral philosophy that guides individuals to decide what is wrong or right, good or bad and what comprises desirable behaviour in a particular set of social circumstances. In other words, it is a formal study of moral standards and conduct. The word ethics has been derived from the word ethos, which implies culture.

Ethics Definition

According to Peter F. Drucker, there is only one ethics, one set of rules of morality, one code: that of individual behaviour in which the same rules apply to everyone alike.The following are some popular definitions of ethics given by management experts:

According to Philip Wheel Wright, ethics is the branch of philosophy which is the systematic study of selective choice, of the standards of right and wrong and by which it may ultimately be directed.

Branches of Ethics

There are three branches of ethics, which are explained as follows:

Normative Ethics

It is the main branch of ethics that deals with how individuals decide upon the right and appropriate moral action or deed that they should take. Eminent philosophers such as Socrates and John Stuart Mill contributed largely to this branch of ethics.

Normative ethics can further be divided into three categories:

Deontological Ethics

As per this ethical theory, certain actions are right or wrong in their own and involve absolute ethical standards that are required to be maintained. Therefore, to make correct moral choices, an individual requires understanding of his/her moral duties and about the rules that exist to regulate those duties.

It can be simply understood as when an individual follows his/her duty, he/she is behaving morally. On the other hand, in case of failing to follow the duty, he/she is behaving immorally.

However, some philosophers argue that though, certain underlying notion of right or wrong constrain our actions; in particular circumstances they might be overridden. For example, there could be a strong moral constraint against killing someone, however in the time of war, this constraint could be overridden.

Teleological Ethics

This theory defines that consequences of an action play an important role in determining what to do and what not to do. Therefore, this theory determines the rightness of an action in terms of goals or purposes. In other words, it is the outcome or result that determines what is right, instead of the input or actions.

In order to make correct moral decisions, an individual needs to evaluate which action may result into what outcome. If someone makes choices which result in the correct consequences, then he/she is acting morally. On the other hand, if the made choices result in the incorrect consequences, then he/she is acting immorally.

Virtue Ethics

This theory does not give any rule that people should follow. Instead, this ethic-based theory focuses more on developing good character traits, such as kindness and generosity among people. According to this theory, if people have good and strong character traits, they will make correct decisions in their lives.

Virtue theory also emphasises over the need of learning how to break bad character habits, such as greed and anger. It is important to get rid of these bad character traits as they stand in the way of becoming a good person.


This branch of ethics explores the scope of moral values in the life of individuals. It answers fundamental philosophical questions about ethical theory.

Applied Ethics

This branch deals with the study of applying theories in everyday life. For example, applied ethics asks questions such as “Is it right to have gender inequality at the workplace?”

Ethical Relativism

Ethical relativism denies the existence of any fixed universal truths on ethical theories. It rejects the concept that there are any valid moral principles, theories, standards, or values. Thus, it believes that everything is subjective.

Ethical relativism is further classified into:

  • Conventionalism: A particular set of ethics or moral principles are valid only within a given culture and for a certain period of time.

  • Subjectivism: Every individual decision determines the validity of moral principles.

The ethical relativism says that the standards of a society define what morally correct behaviour is. Ethics are set according to the directives of that society for a particular period of time. Thus, if an individual follows the standards of that society then he/she is behaving ethically.

However, here it is not necessary that the same ethical standards would apply on other societies too. Therefore, a behaviour that is considered ethical in one society might be considered unethical in another.

Similarly, ethical standards change over time. For example, certain practices of the 18th century that were considered as ethical at that time might not be the part of the ethical standards of the 20th century.

Characteristics of Ethics

Ethics are concerned with setting the moral standards and norms of human behaviour. In an organisation, employees are expected to possess highly defined ethics. This is a strong ethical base of employees that ensures high productivity of both the employees and the organisation.

Thus, it is important for an organisation and its employees to have a deep insight into the characteristics of ethics:


Ethics are said to be related to the true thoughts and actions of an individual or organisation. Maintaining authentic practices is of utmost importance for any organisation. On the contrary, fraudulent acts done in the present may bring huge losses to an organisation in the future.

Satyam Scandal is an example of fraudulent practices of a company that misled the market by misrepresenting its accounts. The profits and cash balances were inflated wrongly to show the company’s good health.


It implies that organisational information should be correct on ethical grounds and without any mistake. In addition, there should be transparency in every part of the information. This in turn leads to consistent and quality processes, increased operational efficiency and high accountability.


Ethics should be clear and objective in nature. For example, ethically, an individual’s action should always be seen as right or wrong regardless of the situation or consequences. If an organisation has objective ethics in place, it would help employees to easily adopt the organisation’s ethical values without any hindrance.


The ethical values of an organisation prompt employees to become accountable for their actions. This in turn helps the organisation to carry out its practices ethically.

Nature of Ethics

Ethics lay emphasis on doing the right things. It is an enquiry into the truth and not into what people believe is not true.

The nature of ethics is explained in the following points:

  • The notion of ethics is applicable only to human beings as they possess the freedom of choice, i.e., alternatives and resources of free will. They can only make a decision about the degree of ends they wish to follow and the means to realise the ends.

  • Ethics is a vast study of social science wherein methodical knowledge about moral and ethical behaviour is gained.

  • Ethics is associated with human conduct, which is voluntary and not at all obligatory by circumstances or any other human beings. It can be implied that at the basic level, ethics deal with moral verdict regarding the directed human behaviour.

  • Ethics is a normative science that involves the incoming of moral standards that control right and wrong conduct.

Sources of Ethics

Ethics of an individual are formed from almost arbitrary variety of sources, such as memories related to childhood upbringing; fundamental life experiences; religious beliefs; discussions with family, colleagues and friends; and ethical teachings of philosophers.

The following are some sources from which an individual draws ethics:

Religious Beliefs

There are diverse religions across the world. All these religions are in accordance with certain ethical principles. Practically, all the world’s religions teach and guide an essentially analogous code of ethics that highlight or stress on values like respect for others and their rights, selflessness, etc.

So, in all phases of life, be it business or personal situations, a highly religious person is expected to act in ethical ways.


It is the culture that sets guidelines and acts as a deciding factor to certain behaviour as acceptable and others as undesirable or objectionable. Culture refers to a set of values, guidelines and standards transferred across generations and acted upon to produce a behaviour that falls under acceptable limits.

These rules and codes of conduct play an imperative role in formulating values as individuals identify their behaviour with the culture of the group they belong to.

Legal System

Laws are framed by the legal system of a state or country. They act as a regulator to guide human behaviour within a social framework. These laws act as ethics for they incorporate ethical standards.

Discussions With Others

Individuals engage in various discussions during the day, such as telephonic conversations, food time conversations, gossiping, etc. Usually, these discussions make individuals draw a conclusion and set it as a source of ethics.

Ethical Philosophers

Philosophers such as Plato, Aristotle, Kant and Bentham have given various ethical theories that influence the ethics of individuals to a large extent.

Ethics Vs Morality

Ethics and morality are used interchangeably in day-to-day business practices, but their inherent meanings are different. Both ethics and morality help an individual to distinguish between right and wrong.

The morals of an individual refer to his/her personal feelings and principles, while ethics define rules and regulations imposed by the external environment, such as code of conduct defined by employers, religious groups, government, etc.

For example, a defence lawyer is responsible for defending his/her clients as per professional ethical codes, even if the lawyer does not find the client innocent.

The ethics and morality can be distinguished on various parameters such as their origin, definition, source of origin, requirement, flexibility, accessibility and so on.

Table presents this difference.

OriginOriginated from a Greek word ethos, which means character.Originated from Latin word mos, which means customs.
DefinitionEthics can be defined as the codes of conduct that are acceptable to civilised human groups and cultures and are applicable to certain human actions.Morality can be defined as a system of principles that determines the right or wrong conduct by an individual.
Source of originEthics develop from external sources such as social system.Morality develops from internal sources; for example, from individual’s own beliefs and principles.
RequirementEthics are imposed by the society.Morality is driven by inner self-belief.
FlexibilityEthics have a moderate degree of flexibility as they are totally dependent on a social system for applicability.Morality is firm in nature but can change only if there is a change in the individual’s belief.
Distinction Between Ethics and Morality

Ethics Vs Law

Usually, anything defined legal is considered to be ethical, but it is not true. For example, breaking promises and lying are considered in most of the societies to be unethical but would be considered legal if terms and conditions were documented beforehand.

In management context, there exists a relationship between ethics and law, in fact, in some situations, they even overlap each other. For instance, in some situations, something perceived as illegal is also considered unethical, or something assumed as unethical is considered legal; or something considered ethical may be illegal otherwise.

Law is defined as a perpetual set of rules that are published, accepted, enforced and universally applied. It frames mandatory rules for citizens to behave in a particular manner in the society. The legal and legislative system of a country frames laws that are established and enforced by the ruling government.

On the other hand, ethics are defined as the rules of conduct acceptable to specific human groups and culture and applicable to certain human actions. Ethics determine ethical codes for how an individual must interact and behave with others in a society.

Ethics and laws can be differentiated on different parameters such as their definition, source of origin, guiding principles, etc.

Table differentiates between ethics and law:

DefinitionEthics are the rules of conduct acceptable to a particular group or culture.Law is a set of rules framed by a government to maintain legal balance in a society and provide security to its citizens.
Source of originEthics originate from the self-awareness of individuals to decide what is right and what is wrong.Law originates due to law enforcement by a government on citizens.
CodificationEthics are the codification of morals that an individual should be adhering to.Law is the codification of ethics that are developed to maintain law and order.
PunishmentThe violation of ethics is not punishable.The violation of law is a punishable offence.
Guiding principlesPersonal beliefs, values and morals of individuals are the guiding principles for developing ethics.Ethics prevalent in a country are the guiding principles for framing laws there.
Distinction Between Ethics and Law

A classic example to explain the difference between ethics and law is of driving. An individual driving under the permissible speed limit and in adherence to traffic rules reflects his/her ethical values.

On the other hand, an individual wearing his/her seat belt and lowering his/ her car speed on noticing traffic police represents his/her fear of legal action that could be taken for the violation of traffic rules.

Ethical Dilemmas

In the discussion so far, you must have understood that ethics are defined as the rules of conduct that determine the behaviour of an individual or a group within a society. An organisation, in spite of operating ethically, may face a number of complex situations called ethical dilemmas.

A business professional often comes across ethical dilemmas that arise out of conflicting interests while making tough choices.

Ethical dilemmas can be defined as complex situations that involve conflict of moral interests while choosing from available alternatives. An individual in an ethical dilemma may have a number of questions in his/her mind.

Some of them are:

  • What should I do?
  • What is right and what is ethical?
  • What will be the consequences of my actions and decisions?
  • What kind of damage or benefit will result from the chosen way?
  • Would I be individually accountable if something went wrong?
  • Who will protect me in case of any legal complications?

In the case of an ethical dilemma, various alternatives are developed for taking a particular decision. In such a case, there may be confusion regarding assigning at the best decision. To overcome this confusion,suggestions are taken from the stakeholders. The alternative that is accepted by the majority is finally selected.

A business professional can deal with a situation of ethical dilemma by applying:

  • Principled thinking resulting into ethical reasoning

  • Moral creativity to argue with stakeholders

  • Negotiating skills to articulate with stakeholders claiming unethical interests

  • Self-moral values identification to set the standards of ethical and unethical

Case Study: Ban on Tobacco Ads by the Government of India

On 6 February 2001, the Government of India sparked a major controversy across the country when it announced that it would very soon ban tobacco companies from advertising their products and sponsoring sports and cultural events.

The intention of such a ban was to discourage adolescents from consuming tobacco products. Further, through such bans, the government would be able to launch an ‘anti-tobacco programme’. This decision was met with much angry oppositions and debates throughout the country not only over the ethical aspects of the government’s moral policing but also over the achievability of the intent itself.

With regards to the proposed government ban, the strong reaction of Suhel Seth, CEO, Equus Advertising, was: The ban does not have teeth. It is a typical knee-jerk reaction by any Government to create some kind of popularity for itself. The Legislation has not been thought thorough.

Further, in reaction to the government’s decision, ITC Ltd. announced: It would voluntarily withdraw from all of the sponsorship events, irrespective of the legal position on the subject.

ITC’s statement in view of the proposed government ban was: It believes that this action on its part will create the right climate for a constructive dialogue that will help develop appropriate content, rules and regulations to make the intended legislation equitable and implementable.

The issue was complex in nature as the dispute involved ethical and commercial considerations. On one hand, there was the harmful effect of tobacco that has proved fatal for human life. Thus, from an ethical view, the government, being responsible for the welfare of its citizens, needed to discourage the habit of tobacco consumption. However, on the other hand, the government also needed to take into consideration the commercial benefits of tobacco. The tobacco industry is considered a key contributor to the State Exchequer.

This was evident from the stats that depicted that during the year 2000-01, it contributed about ₹8000 crores in excise revenue. This was considered extremely essential in view of the economic crisis that the government faced at that time. In light of the above statements, there were several questions that came up, such as “What approach must the government take— ethical or commercial?” or “Is it right for the government to interfere in the matters of personal choice in the first place?”

To make the issue more complex and debatable, there were also questions such as “Was the objective achievable at all?” or “Was it equitable?” The answers to these questions lay in understanding the opinions of both sides, that is, those in favour of and those against such bans. The ban was not unusual if some of the international precedents analysed.

For example, in countries like France, Finland and Norway, similar bans on tobacco ads had already been imposed. People supporting these bans were of the view that these resulted in breach of people’s privacy and personal choice and decision making.

However, others were of the opinion that the government had the right to intervene in the overall interest of the citizens. They mentioned examples of drugs, like cocaine, which is banned around the world.

In 1981, the Supreme Court (of Appeal) in Belgium gave the verdict that a ban on tobacco advertising was not unconstitutional. Further in 1991, the French Constitutional Council gave the verdict that the French ban on tobacco ads was not unconstitutional as it intended to protect public health without restricting the freedom of trade.

There were many precedents of restrictions being imposed on the advertising of dangerous or potentially dangerous products, e.g., pharmaceutical products, firearms, etc., even if they were available in the market.

Article Source
  • De George, R. (1982). Business ethics. New York: Macmillan Pub. Co.

  • Grace, D. & Cohen, S. (1995). Business ethics. Australia: Oxford University Press.

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