The Importance and Advantages of Good Business Ethics
A business should have a positive influence on its immediate surroundings and the people that live in the community by creating jobs and playing a significant role in the economical and social welfare of the community. The effect of unethical practices by a business will create a bad reputation and distrust among the employees and the community.
Businesses with integrity and high ethical standards establish long lasting relationships with the customers they deal with. Many business make the mistake of putting profit before customer satisfaction, while they might get away with it initially and appear successful, in the long run, the business is bound to fail as no customer wants to feel short-changed. It is important that a degree of transparency in all dealings be present and ambiguity be eliminated. This is because even if the transaction was fair, the presence of hidden expenses will generate distrust leading to bad will.
The business administrators have a duty to the shareholders, employees, and the community; Therefore, they need to keep to an ethical approach in all dealings. It is important that set ethical standards be made part and parcel of the companies' culture and included in all dealings associated with the business.
Companies with good ethical policies earn:
• Marketing advantages over their competitors. Customers readily invest in the companies through shares and also want to establish long lasting business relations with the company.
• The performance of employees improves with good ethical policies present in a company. Morale is high and employees feel obligated to put in their all to continue to make it a success.
• Reputation management: a bad reputation is created by unethical behavior which will eventually lead to a scandal. A scandal will result in falling stock prices, anxiety, and low morale among employees as well as government and public scrutiny and inquests.
• Legal and financial incentives: companies known for their high ethical standards and education of employees on ethical polices are provided with strong legal and financial incentives by regulatory bodies.
Individual opinion of what is ethical varies, hence the importance for the company to set standards that represent and are applied throughout the organization. The Human resource team is the starting point of ethical reformation in an organization. The careful selection and training of the human resource team is necessary if they are to train other employees on ethics. Sound ethical policies in a company create a unified and morally sound approach to business practice.
"If you have integrity, nothing else matters. If you don't have integrity, nothing else matters." — Alan K. Simpson