What are the three 3 types of business ethics?
What are the three 3 types of business ethics?

What are the three 3 types of business ethics?

Business ethics, a subject that has gained significant importance in the corporate world over the past few years, plays a crucial role in how a company conducts its business. Business ethics, at its simplest, refers to the application of ethical values to business behaviour. It offers a framework for determining what is right or wrong, fair or unfair, and just or unjust in business situations. To better understand this concept, it is essential to recognize the three fundamental three 3 types of business ethics: descriptive ethics, normative ethics, and applied ethics.

Descriptive Ethics

Descriptive ethics, as the name suggests, involves describing, characterizing, and studying the morality of people, an organization, a culture, or a society. It is concerned with what people believe to be moral and ethical. In the business context, descriptive ethics involves studying the ethical standards, behaviours, and decision-making processes of businesses. It’s about understanding the ethos of business practice and noting how these practices vary across different cultures, organizations, or societies.

For instance, a company may use descriptive ethics to understand the ethical behaviours of its employees, the ethical standards across different departments, or even to observe the ethical practices in a different industry or country.

Normative Ethics

While descriptive ethics is about what is, normative ethics is about what ought to be. It determines how things should be and what people ought to do. It’s the study of ethical action and involves establishing a framework for defining right and wrong behaviour. It revolves around creating or evaluating ethical standards and guidelines for what constitutes good or bad practices.

For example, a company may establish a code of conduct based on normative ethics that sets out the values and behaviours expected of its employees. This can include guidelines on how to interact with customers, how to handle conflicts of interest, and how to conduct themselves professionally, among other things.

Applied Ethics

Applied ethics is the practical application of ethical considerations. It involves examining specific controversial issues using a framework provided by normative ethics. It takes the principles established by normative ethics and applies them to real-world situations.

In a business context, applied ethics could involve examining questions like: Is it ethical for a company to use certain marketing practices? Is it ethical to outsource labour to countries with lower labour standards? Is it ethical to use customer data for business gain? Such questions help businesses make decisions that are both beneficial and ethically sound.

 The Importance of the Three 3 Types of Business Ethics in Today’s Business Environment

Business ethics guide corporations in their quest to conduct their operations responsibly and ethically. Understanding and implementing the three 3 types of business ethics—descriptive, normative, and applied ethics—is crucial to corporate sustainability and success. Let’s delve deeper into why these three types are integral to the business world.

Importance of Descriptive Ethics

Descriptive ethics provides an understanding of the moral landscape within an organization and across industries or cultures. By recognizing and studying moral beliefs, behaviours, and processes, businesses can gain insights into what drives decision-making, interpersonal relationships, and ethical conduct.

Understanding descriptive ethics is crucial as it:

  • Provides a realistic view of the existing ethical culture, helping businesses identify areas of strength and improvement.
  • Offers a greater understanding of stakeholders’ moral expectations, crucial for maintaining healthy relationships with employees, customers, and the broader community.
  • Enables businesses to benchmark against industry standards, encouraging ethical competitiveness and innovation.

Importance of Normative Ethics

Normative ethics set the standard for ethical behaviour, acting as a guiding framework for right and wrong within a business. This can manifest in the form of a company’s code of ethics or ethical guidelines.

The importance of normative ethics includes:

  • Providing clear standards and expectations helps to reduce ambiguity and conflicts in decision-making.
  • Enabling a consistent approach to ethical challenges across the organization.
  • Enhancing the company’s reputation by demonstrating a commitment to a high ethical standard.

Importance of Applied Ethics

Applied ethics translates theory into practice. It uses the principles established by normative ethics and applies them to real-world situations that a company might face.

Key benefits of applied ethics are:

  • Guiding decision-making in complex, real-world ethical dilemmas. This helps businesses maintain their ethical standards even when navigating uncharted territories.
  • Fostering ethical awareness and critical thinking among employees, encouraging them to make ethical choices.
  • Helping to ensure legal and ethical compliance in operations, reducing the risk of fines, sanctions, or reputational damage.

In a rapidly evolving business landscape, the importance of descriptive, normative, and applied business ethics cannot be overstated. By understanding what is, setting standards for what ought to be, and effectively applying these standards in practice, companies can make sound, ethical decisions. This, in turn, fosters a positive organizational culture, enhances corporate reputation, and contributes to sustainable success. These three types of ethics are interconnected and, when used together, form the backbone of a robust and resilient ethical business framework.

The Benefits of Implementing the Three 3 Types of Business Ethics

Business ethics, in its varying forms of descriptive, normative, and applied, is far more than a corporate compliance measure. It’s a strategic approach that yields tangible and intangible benefits, contributing to the overall growth and sustainability of an organization. Let’s explore some of these benefits in detail.

Benefits of Descriptive Ethics

Descriptive ethics, with its focus on describing and understanding the moral landscape of a business environment, provides numerous benefits:

  • Cultural Insight: It offers a clear insight into the existing ethical culture, helping businesses comprehend their strengths and areas of improvement. This understanding can guide initiatives to foster a more ethical work environment.
  • Benchmarking and Innovation: Observing the ethical practices of other companies can spur innovation, encouraging a business to refine and enhance its own ethical strategies.
  • Risk Mitigation: Understanding the moral behaviours and decision-making processes within an organization can help in identifying potential ethical risks before they manifest as bigger issues.

Benefits of Normative Ethics

Normative ethics, which outlines the moral framework for appropriate conduct, delivers several key benefits:

  • Consistent Decision-Making: With clear ethical guidelines, businesses can ensure consistency in their decision-making process. This can eliminate ambiguity and potential conflicts, leading to a more harmonious working environment.
  • Enhanced Reputation: A strong and visible commitment to high ethical standards can significantly enhance a company’s reputation, leading to improved stakeholder trust and loyalty.
  • Employee Alignment: By defining what is considered right and wrong behaviour, employees can align their actions with the company’s ethical expectations, promoting a culture of integrity and responsibility.

Benefits of Applied Ethics

Applied ethics, the practical application of ethical principles to real-world scenarios, also yields significant benefits:

  • Problem-Solving: By applying ethical considerations to real-world dilemmas, businesses can make decisions that are both ethical and effective. This can lead to better problem-solving and decision-making outcomes.
  • Legal Compliance: The practical application of ethics often aligns with legal requirements, helping businesses stay compliant and avoid legal penalties.
  • Improved Stakeholder Relationships: When stakeholders see a company consistently making ethical decisions, it can foster trust and strengthen relationships, benefiting the business in the long run.

The three 3 types of business ethics – descriptive, normative, and applied – are interdependent and work together to create a comprehensive ethical framework for a business. Implementing these types of ethics in a balanced and consistent manner can yield immense benefits. From fostering a culture of integrity to enhancing a company’s reputation and decision-making abilities, the rewards of ethical adherence are manifold. Therefore, businesses today should not merely view ethics as an obligation, but as an essential strategy for long-term success.

Illustrating the three 3 Types of Business Ethics through Real-World Examples

The concepts of descriptive, normative, and applied business ethics can often be better understood through real-world examples. Let’s delve into each type with a practical example.

Example of Descriptive Ethics

Consider a multinational corporation that wants to expand its operations into a new country. Before doing so, the company conducts extensive research to understand the ethical standards, practices, and behaviours prevalent in the new market. They might study local companies, business practices, laws, and cultural nuances to get a detailed picture of the ethical landscape.

In this scenario, the multinational corporation is employing descriptive ethics. The information gathered will guide them in navigating the new environment and making decisions that align with local ethical expectations, helping to minimize cultural conflicts and misunderstandings.

Example of Normative Ethics

An IT company has a detailed code of conduct that outlines how employees should behave in various scenarios. The code includes guidelines on maintaining data privacy, handling conflicts of interest, dealing with harassment issues, and more. Regular training sessions are conducted to ensure that every employee understands and adheres to this code.

In this case, the IT company is using normative ethics. By establishing a clear framework for right and wrong behaviour, the company is creating a culture of integrity and responsibility. This not only guides employees’ actions but also reinforces the company’s commitment to ethical conduct.

Example of Applied Ethics

A clothing manufacturing company, as part of its ethical policy, decides not to outsource its labour to countries with poor working conditions and low wages. This is a real-world ethical issue that the company navigates using the principles established by its normative ethics.

In making this decision, the company is using applied ethics. By applying its ethical guidelines to a specific situation, it ensures that its actions are both practical and morally sound. This not only avoids potential harm to vulnerable communities but also strengthens the company’s reputation as an ethical business.

These real-world examples illustrate the significance of the three 3 types of business ethics in guiding and shaping a company’s actions. Descriptive ethics provide the necessary insights into the moral landscape, normative ethics establish a framework for ethical behaviour and applied ethics ensure that this framework is effectively translated into real-world actions. By implementing all three types, companies can build a robust ethical culture that drives success and fosters trust among stakeholders.

Risk Factors Associated with the Three 3 Types of Business Ethics

While the three 3 types of business ethics – descriptive, normative, and applied – provide crucial guidance for businesses, there can be potential risk factors or challenges associated with them if not managed correctly. Let’s delve into the risk factors tied to each type of business ethics.

Risk Factors of Descriptive Ethics

Descriptive ethics provides insights into what is considered ethical within a specific cultural or organizational context. However, the following risk factors may arise:

  • Relativism: A major risk factor in descriptive ethics is the potential to slide into ethical relativism, where any practice is justified if it is considered normal within a certain culture or organization. This can lead to the acceptance of unethical practices if they are considered ‘the norm.’
  • Misinterpretation: Understanding the ethical practices of different cultures or industries is a complex task, and there’s a risk of misinterpretation, leading to flawed strategies or decisions.
  • Resistance to Change: If unethical practices are deeply ingrained in an organization’s culture, there may be significant resistance to change, making ethical improvements difficult.

Risk Factors of Normative Ethics

Normative ethics involves setting standards for what is considered ethical behaviour. However, it’s not without its potential risks:

  • Inflexibility: If strictly adhered to, normative ethics can lead to inflexibility, preventing a company from adapting quickly to new ethical dilemmas or challenges.
  • Overemphasis on Compliance: There’s a risk that employees may focus solely on adhering to the rules rather than understanding the ethical principles behind them. This can lead to a ‘check-box’ mentality where ethics is about compliance, not understanding.
  • Inconsistent Application: If the ethical standards are not consistently applied, it can lead to perceptions of favouritism or unfairness, undermining the integrity of the ethical framework.

Risk Factors of Applied Ethics

Applied ethics involves the application of ethical principles to real-world scenarios. Despite its practicality, it may present these risks:

  • Subjectivity: Different individuals may have different interpretations of how ethical principles should be applied in specific situations, leading to inconsistencies and potential conflicts.
  • Unintended Consequences: Even with the best intentions, the application of ethics can sometimes lead to unintended negative consequences. For example, a decision made to protect customer privacy might inadvertently limit the company’s ability to provide personalized services.
  • Resource Intensive: Applying ethical principles to every decision can be time-consuming and resource-intensive, which can be challenging, especially for smaller businesses.

While each of the three 3 types of business ethics plays a crucial role in promoting ethical behaviour, it’s important for organizations to be aware of and mitigate these potential risk factors. By doing so, they can ensure that their ethical framework is not just robust but also adaptable, consistent, and reflective of their core values. This balanced approach to business ethics enables organizations to effectively navigate ethical dilemmas, foster a culture of integrity, and build stronger, more trusting relationships with their stakeholders.

Top Tips for Implementing the Three 3 Types of Business Ethics

Implementing the three 3 types of business ethics – descriptive, normative, and applied – in your business can contribute greatly to its success and reputation. To make the most of these ethical considerations, here are some valuable tips for businesses.

Tips for Descriptive Ethics

  • Conduct Thorough Research: Regularly conduct ethical audits to understand the current ethical climate of your organization. This can help you identify areas for improvement.
  • Embrace Diversity: Respect and understand diverse cultural and societal norms, especially if you are a multinational business. This helps ensure your operations are respectful and inclusive.
  • Stay Current: Ethical norms can evolve over time. Make sure to stay updated with the latest ethical trends and standards in your industry and locality.

Tips for Normative Ethics

  • Develop a Comprehensive Code of Ethics: A comprehensive and clear code of ethics helps in setting expectations for ethical conduct. Make sure it covers a wide range of scenarios and is easily accessible to all employees.
  • Provide Training: Regular ethical training sessions can ensure employees understand and apply the established norms properly. Encourage open discussions about ethics and create a safe space for employees to express their concerns.
  • Leadership Commitment: Leaders must set an example by adhering to the company’s ethical standards. Leadership’s commitment to ethics can encourage similar behaviour throughout the organization.

Tips for Applied Ethics

  • Encourage Ethical Decision-Making: Promote a culture where employees feel comfortable making ethical decisions. Provide them with resources and support to navigate complex ethical dilemmas.
  • Be Transparent: Transparency in your decision-making process fosters trust among employees and stakeholders. If an ethical guideline influences a decision, communicate that clearly.
  • Continual Review: Regularly review your ethical practices to ensure they are working effectively. Be willing to adjust your approach as needed based on feedback and changing circumstances.

The implementation of descriptive, normative, and applied ethics is not a one-time event, but an ongoing process that requires commitment, vigilance, and adaptability. With the above tips, businesses can effectively integrate these three types of ethics into their operations, leading to an ethically responsible and sustainable business model. Remember, the ultimate goal is to create a culture where ethics is not just a concept, but a guiding principle in every decision and action.

Useful Tricks for Implementing the Three 3 Types of Business Ethics

Implementing the three 3 types of business ethics – descriptive, normative, and applied – is not just about creating rules and procedures, but about cultivating an ethical culture. To help businesses in this journey, here are some practical tricks that can facilitate the effective implementation of these ethics.

Tricks for Descriptive Ethics

  • Use Surveys and Interviews: To truly understand your organization’s ethical climate, consider conducting anonymous surveys or interviews with employees at different levels. This can provide valuable insights into the actual ethical behaviours and beliefs in the organization.
  • Leverage Case Studies: Studying the ethical scenarios faced by other businesses in your industry can provide valuable lessons. These case studies can help you understand what to do or what to avoid in certain situations.
  • Create a Feedback Loop: Encourage open and honest feedback from employees about the ethical culture of the organization. This can help identify gaps or issues that may not be apparent from a management perspective.

Tricks for Normative Ethics

  • Involve Employees in Developing the Code of Ethics: Employees are more likely to follow a code of ethics that they have had a hand in creating. This can also ensure that the code is practical and relevant to the daily challenges faced by your team.
  • Use Clear and Simple Language: Avoid legalistic jargon or vague principles in your code of ethics. The clearer and more straightforward your guidelines, the easier it will be for employees to understand and follow them.
  • Regularly Update the Code of Ethics: Ethical norms can change over time, and your code of ethics should reflect these changes. Regular updates can keep your ethical standards relevant and effective.

Tricks for Applied Ethics

  • Integrate Ethics into Decision-Making Processes: Rather than treating ethics as a separate consideration, integrate it into your regular decision-making processes. This can ensure that ethical considerations are always at the forefront.
  • Provide Practical Examples: When training employees on applied ethics, use practical examples and real-world scenarios. This can help them understand how to apply ethical principles in their work.
  • Encourage Ethical Leadership: Leaders play a crucial role in promoting applied ethics. Encourage leaders to model ethical behaviour and support their team members in making ethical decisions.

While implementing the three 3 types of business ethics can seem daunting, these tricks can simplify the process and enhance the effectiveness of your ethical framework. By fostering an environment where ethics is an integral part of everyday work, businesses can build a culture of integrity, improve their reputation, and achieve long-term success. Always remember that the goal is not just to be ethical in name, but to live and breathe these values in every aspect of your business operations.

What are the three 3 types of business ethics?
What are the three 3 types of business ethics?

Frequently Asked Questions about the Three 3 Types of Business Ethics

The realm of business ethics is complex and ever-evolving, often leading to numerous questions. Below are some frequently asked questions about the three 3 types of business ethics: descriptive, normative, and applied, along with their answers to provide a deeper understanding.

What is the difference between the three 3 types of business ethics?

Descriptive ethics involves observing and understanding ethical behaviour as it is, in a given cultural or organizational context. Normative ethics, on the other hand, focuses on establishing the standards or norms for ethical behaviour. Applied ethics is about applying these norms to real-world scenarios and making ethical decisions.

How can a company ensure the effective implementation of these three types of ethics?

Companies can effectively implement these three types of ethics by conducting regular ethical audits, developing a clear and comprehensive code of ethics, providing regular ethical training to employees, and fostering an environment that encourages ethical decision-making.

Can a company choose to implement only one type of business ethics?

While a company could technically focus on just one type of business ethics, it wouldn’t provide a comprehensive approach to ethical conduct. The three types are interconnected and all are necessary for a balanced and effective ethical framework.

How does the application of these types of ethics affect a company’s relationship with its stakeholders?

When a company effectively applies the three types of ethics, it can foster trust and strengthen relationships with stakeholders. Stakeholders are more likely to engage with a company that they perceive as ethical and responsible.

How can a company adapt its ethical framework to changing ethical norms and standards?

By staying updated with the latest trends and standards in business ethics, and regularly reviewing and updating its own ethical framework accordingly, a company can ensure that its approach to ethics remains relevant and effective.

What role do leaders play in promoting these types of business ethics?

Leaders play a critical role in promoting business ethics. They can set an example by adhering to the company’s ethical standards and supporting their team members in making ethical decisions. They can also influence the ethical culture of the organization through their actions and decisions.

Can business ethics contribute to a company’s profitability?

Yes, business ethics can contribute to a company’s profitability. An ethical company can earn a good reputation, foster customer loyalty, attract and retain top talent, avoid legal issues, and make effective and responsible decisions, all of which can contribute to long-term profitability and success.

Business ethics, in its three types – descriptive, normative, and applied – is a complex yet crucial aspect of modern business operations. By understanding and addressing these frequently asked questions, companies can better navigate the ethical landscape and create a culture of integrity and responsibility.


In today’s corporate environment, understanding and applying the three 3 types of business ethics — descriptive, normative, and applied — is fundamental to maintaining a good reputation, fostering a positive work environment, and ensuring long-term success. By considering what is, what should be, and how ethical guidelines can be applied in specific situations, businesses can make sound decisions that are aligned with their values and uphold their commitment to ethical conduct.

Remember, the strength of a business ethical framework is not only determined by the quality of its guidelines but also by the consistency of its application and the commitment of its people to uphold these principles. So, while ethics may seem abstract at times, they are undoubtedly grounded in the real world, influencing every decision and action in the business sphere.