There’s no asking why business ethics is important because it is the standard of morality in the operation of a business. There’s a strict code of conduct for how professionals should behave and work and this is important because no matter how great the service or product a business or startup offers, without business ethics all effort to convert a prospect might be in vain. In this article, we will give you 7 reasons why business ethics are important.
What is Business Ethics
To properly understand what business ethics is and why it is important. We’ll start by defining it. The Oxford Standard English dictionary defines Ethics as the moral principles that govern a person’s behaviour or the conducting of an activity. Basically, ethics is a set of principles or rules that set the standards of what is acceptable and what isn’t.
Applying this definition of Ethics to business, we can say that business ethics are a set of rules outlined by a business or organization on behaviours that are acceptable in the operation of the business. Although Law has laid down the conduct for human behaviour, businesses can outline acceptable behaviours applicable to their own operations. In terms of dealings between two or more businesses, business ethics studies the manner of approach and how transactions are to be carried out between the businesses or organizations involved.
In this scenario, business ethics policies focus on controversial subjects such as; insider trading, corporate governance, discrimination, fiduciary, corporate social responsibilities, bribery and so on. The aim of these policies is to promote integrity and transparency among businesses.
Principles of Business Ethics
Business ethics came into the limelight in the 1970s and now with the internet at the fingertips of almost everyone, businesses and organizations have taken business ethics to a whole new level. Organizations and businesses have become more conscious of how they deal with consumers because technology has made it easier for disgruntled customers/consumers to publicize ethical missteps. This has made many businesses invest heavily in business ethics.
Business ethics has principles that professionals must stick to. For a professional to be competitive and ambitious isn’t a bad thing, in fact, it is an important factor in becoming successful, yet, they must be regulated by some basic principles as listed below:
1. Honesty: Employees are compelled to be honest. They must not give false information or mislead others by selective omissions, partial truth, overstatements or any other means.
2. Integrity: Integrity is important to the success of a business. To maintain Integrity, you’ll need moral courage to do the right thing regardless of the situation.
3. Loyalty: Employees must be loyal to the business by not trying to sabotage the business and executives must be able to make an independent professional judgement and as well as respect and safeguard the legitimate interest of their business and colleagues lawfully.
4. Fairness: Employees must care for and respect others, and their actions must be just.
5. Accountable: Employees must be transparent and be able to take full responsibility for their duties.
6. Healthy competition: The competition between two or more organizations and their Employees should be healthy. None should resolve to illegal means or methods to rival a competitor.
7. Respect for the rule of law: Every business or organization must respect the laws that govern the region where they operate in.
7 Reasons why Business Ethics is important
What qualifies as business ethics in history has changed over time. Most Organizations and businesses have invested heavily in their ethics by creating ethics management programmes to instil good business ethics in their employees so that the organization will have a good image in the public’s eye.
Here are 7 reasons why Business Ethics is Important:
1. An ethical business attracts investors: A business that is known for its good reputation will attract investors because of its acceptance by the public.
2. It increases employee retention: An organization that demonstrates business ethics will make the employees want to stay and do their job effectively.
3. Good business ethics increases productivity: In an organization where good business ethics is observed, employees will do their job effectively.
4. Good business ethics creates loyal customers: Another major reason why business ethics is important is that it will make customers fond of the organization and will always refer to the organization first when they are in need of a product or service.
5. Good ethics increases the popularity of the organization: Customers who have experienced the ethics of an organization will consciously or unconsciously refer their friends to the company, and gradually the organization becomes more popular. This is because a positive image of the company has been stamped in the mind of the customer, thereby speaking good words of the organization to others interested in similar services.
6. Good business ethics enhances partnership: When an organization invest in their business ethics, they gain positive recognition from other businesses and organizations thereby fostering a good business partnership between the organizations involved.
7. Builds Character: When good business ethics is practised, it slowly becomes a norm in the organization and employees become more positively minded. The continuous practice of business ethics will then influence the personal character of the employee.
Conclusion
When business ethics is given top priority, the organization and the employees gain massively. Business ethics will make employees valuable to their employers, and the organization will in turn make good profits and will be able to compensate their employees well.
