What does the term "business ethics" encompass in the context of the exam?

The term "business ethics" encompasses principles that guide behavior and decisions in business situations. This concept involves a framework of moral values and standards that govern the conduct of individuals and organizations in the business environment. It is about making choices that are not only profitable but also fair, just, and responsible, taking into account the impact on stakeholders, including employees, customers, suppliers, and the community.

In essence, business ethics provides a foundation for addressing complex issues that arise in the course of business operations. It encourages companies to consider the larger consequences of their decisions and to operate transparently and honestly, fostering trust and long-term relationships with stakeholders.

This understanding is critical for fostering an ethical culture within an organization, leading to better decision-making and reputation management, which, in turn, can positively influence profitability and sustainability in the long run.