Ethical management refers to a concept of corporate management that not only fulfils economic objectives and legal responsibilities that are obligatory for an enterprise, but also is able to meet the ethical expectations that are created and imposed by social norms that are related to the conduct of business operations. In essence, ethical management are a set of ethical principles that the management of a corporate entity should adhere to while formulating policies and strategies that are targeted towards the growth of the firm and at the same time ensuring that they are able to satisfy the established expectations that arise out of ethical ideas that hold a hegemony within the context of any given society.
The origins of ethical management are complicated and there seems to be no single individual or a group of theorists who formulated the notion of ethical management. It could be said that the idea of ethics playing a major role in the process of making policies possessing long-term effects has been in existence ever since the notion of ethics has emerged in the realm of philosophy. Indeed, ancient philosophers belonging to the Greco-Roman and Chinese traditions provided seminal contributions to how leaders leading important positions should base their decisions on certain ethical standpoints which are characteristic of the society that they belong to. Further developments in human thought, especially the rise of Abrahamic religions like Christianity and Islam, embedded the necessity of abiding by ethics whenever the opportunity presented itself for a leader to make significant decisions.
Given that for the longest period of time in human thought the philosophy of ethics has been a dominating feature, it goes without saying that ethics or in the very least ethical considerations played a huge role in shaping the worldview of notable historical figures. Even when religious orthodoxy and superstition were being questioned in the Age of Enlightenment, the notion of ethics assumed a secular character and leaders during that time were still being held to the common ethical standards that were in vogue. Even though thinkers like Machiavelli had advocated for an ambivalence towards ethical matters regarding politics (and other important affairs in general), the need to always abide by the right and just standards of decision-making and management in order to court support of the population has maintained the relevance of ethical management. In this age, management when maintaining their ethics in their decision-making process are held to be legitimate and are thus subject to social praise and admiration.
As mentioned above, in today’s time, ethical management can have a variety of uses and utilities by various corporate entities which could help them in promoting their prestige and entrenching themselves as elements in the industry who tend to uphold and even the professional ethics held in common within the context of that industry. Ethical management is also useful for establishing the legitimacy and validity of authority, as it would influence subordinates and employees to believe that the managerial decisions are correct as long as they are made in keeping with the current iteration of ethical standards. Thus, ethical management can be used to earn internal authority and stability while accruing social prestige and recognition as an asset to be used in future events and contingencies.
One of the major criticisms levelled against the idea of ethical management is its practicality and it being not related to the realities of a competitive market. It is not possible for always being able to adhere to an established set of ethical principles when there is tough competition and quick decisions have to be taken in order to ensure that the firm is able to emerge out of the competition in a victorious fashion. Thus, it is not always possible or even desirable to abide by ethics when the question of the firm’s very survival is at stake. Therefore there is a wide discrepancy existing between what should be and what actually exists. However, it is also important to note that proponents of ethical management have recognized the complexities and competitive realities inherent in a free market and in counter to these criticisms they advocate that management should in the very least strive to adhere to the ethical notions of management as much as possible and practicable.
Ethical management is a component of the wider theory of business ethics, where the conduct of business operations are thought to be conceived of as actions that are in line with generally accepted ethical principles adapted to the needs and conditions of managing a going-concern. Hence, ethical management could said to be the management aspect of business ethics which lays down a number of principles for managers to follow and uphold even as they are managing the conduct and proceedings of their enterprise’s operations within the industry of which it is a part of.