Ethics in Business: How Important Are They?
Ethics. Very rarely does a single word bring up so many different connotations, definitions, and even, applications.
Yet, are “ethics” really so subjective that so many people have so many different ideas of what the word even means, much less how to apply “ethics?”
And what about ethics in business?
If ethics can “be” so many variations of concept for various people, is it even possible to set an ethical standard for businesses, business leaders, and business behavior?
What determines whether a business is ethical or unethical?
Undoubtedly, if a business behaves “unethically” it is more evident to the masses – and easier to recognize — than is determining a business is “ethical.”
One strong definition of ethics for business that can be found online is from AACA Global:
“Ethics concern an individual’s moral judgements about right and wrong. Decisions taken within an organisation may be made by individuals or groups, but whoever makes them will be influenced by the culture of the company. The decision to behave ethically is a moral one; employees must decide what they think is the right course of action. This may involve rejecting the route that would lead to the biggest short-term profit.”
What are the benefits to a business that practices ethical behavior? [H4]
Don’t you appreciate ethical behavior? When others act and behave ethically? Would it not stand to reason then, that your customers and clients would also appreciate the same? And that when they experience ethical behavior of and by and business that they feel more comfortable sharing and promoting that business or organization to others?
That answer is fairly obvious, of course!
But what are the specific benefits of ethical behavior by a business or organization?
- Customers feel valued and appreciated—producing more sales both in the short and long-term
- Employees feel more valued and appreciated by a business or organization they feel practices “ethics” as well; this makes them more loyal and in turn, they too perform better for the organization
- Messages transmitted and published by the business — either internally or externally — are more authentic and thus, resonate more and better with customers and clients
- Products and services are produced and delivered that will likely, perform better initially and over time
- Transactions go smoother because there is less manipulation or conflict resolution required
- The business develops a reputation of ethical behavior and performance that not only attracts more customers and clients but also, more and higher-quality employees
- If a business so chooses to try and attract investors, it is easier when the business already has a reputation for having a strong ethical foundation
As you’ve probably noticed—at the heart of ethical practice by a business is the overall benefit to reputation. Reputation can most certainly make or break a business.
Have you considered whether your business is ethical or behaves ethically? Do you have a Code of Ethics? If not, why?
Thus, anything that betters the reputation of a business would certainly be of value. Meaning, the value of ethics in business, ethical behavior by a business or organization, and a long-standing commitment to ethics, is one of the smartest decisions a business and its leaders can make.