In a business ethics context, how do normative ethics and descriptive ethics differ?

• A. Descriptive ethics observes how firms actually behave.
• B. Normative ethics prescribes how firms should behave.
• C. Normative ethics observes how firms actually behave.
• D. Descriptive ethics prescribes how firms should behave.

Answer: (B)

In business ethics, you distinguish what ought to be from what is. Normative ethics prescribes how firms should behave, outlining duties, values, and standards that guide action. Descriptive ethics explains how firms actually behave, describing real practices, beliefs, and norms without judging them as right or wrong. So normative ethics would say firms ought to be honest, fair to stakeholders, and transparent, while descriptive ethics would examine whether firms currently act that way in practice. This is why the correct statement is that normative ethics prescribes how firms should behave—the other options mix up which approach describes or prescribes behavior.