Business ethics refers to the standards for morally right or wrong conduct in business. It is a well-founded standard of right and wrong that prescribes what humans ought to do, usually in terms of rights, obligations, benefits to society, fairness, or specific virtues.
Often, business ethics involve a system of practices and procedures companies put in place to help build trust with the consumer. It guides executives, managers, and employees in their daily actions and decision-making. Also, Company’s actions that have legal, environmental, and social repercussions are guided by business ethics in deciding the best way to handle such issues.
Business ethics studies appropriate business policies and practices regarding potentially controversial subjects, including corporate governance, insider trading, bribery, discrimination, corporate social responsibility, fiduciary responsibilities, and much more. The law often guides business ethics, but at other times business ethics provide a basic guideline that businesses can follow to gain public approval.
Usually, every profession has its own ethics. There are ethics in the medical profession, the legal profession, journalism, Engineering, etc. Each profession has guiding principles everyone that operates in the profession is expected to abide by.
Below, are the principles of business ethics.
- Leadership: The conscious effort to adopt, integrate, and emulate the other 11 principles to guide decisions and behavior in all aspects of professional and personal life.
- Accountability: Holding yourself and others responsible for their actions. Commitment to following ethical practices and ensuring others follow ethics guidelines.
- Integrity: Incorporates other principles—honesty, trustworthiness, and reliability. Someone with integrity consistently does the right thing and strives to hold themselves to a higher standard.
- Respect for others: To foster ethical behavior and environments in the workplace, respecting others is a critical component. Everyone deserves dignity, privacy, equality, opportunity, compassion, and empathy.
- Honesty: Truth in all matters is key to fostering an ethical climate. Partial truths, omissions, and under or overstating don’t help a business improve its performance. Bad news should be communicated and received in the same manner as good news so that solutions can be developed.
- Respect for laws: Ethical leadership should include enforcing all local, state, and federal laws. If there is a legal grey area, leaders should err on the side of legality rather than exploiting a gap.
- Responsibility: Promote ownership within an organization, allow employees to be responsible for their work, and be accountable for yours.
- Transparency: Stakeholders are people with an interest in a business, such as shareholders, employees, the community a firm operates in, and the family members of the employees. Without divulging trade secrets, companies should ensure information about their financials, price changes, hiring and firing practices, wages and salaries, and promotions are available to those interested in the business’s success.
- Compassion: Employees, the community surrounding a business, business partners, and customers should all be treated with concern for their well-being.
- Fairness: Everyone should have the same opportunities and be treated the same. If a practice or behavior would make you feel uncomfortable or place personal or corporate benefit in front of equality, common courtesy, and respect, it is likely not fair.
- Loyalty: Leadership should demonstrate confidentially and commitment to their employees and the company. Inspiring loyalty in employees and management ensures that they are committed to best practices.
- Environmental concern: In a world where resources are limited, ecosystems have been damaged by past practices, and the climate is changing, it is of utmost importance to be aware of and concerned about the environmental impacts a business has. All employees should be encouraged to discover and report solutions for practices that can add to damages already done.
Every successful organization anchors its business around ethics and core values. Defined ethics programs establish a code of conduct that drives employee behavior. When all employees make ethical decisions, the company establishes a reputation for ethical behavior. Its reputation grows, and it begins to experience the benefits a moral establishment reaps. Some of the benefits include:
- Brand recognition and growth
- Increased ability to negotiate
- Increased trust in products and services
- Customer retention and growth
- Attracts talent
- Attracts investors
It is crucial, therefore, that every organization should strive for high ethical standard as it not only enhances business growth but also provide business sustainability.