In case your interest is piqued by the term, let us help explain. Business ethics are the rules that govern what a company or an individual in a given industry should do, and how they interact with others within their given industry or community. In simplest terms, it’s about doing what’s right for society as well as yourself- your company and its employees.
Ethics are important because they affect how people feel about the industry and related companies- if unethical practices are viewed positively, more unethical actions could be perceived to be acceptable because people believe it comes with success. So, when an individual or company is violating business ethics, it can have a negative impact on its reputation.
These days, knowing that a company is ethical and fair-minded can be what can set it apart from its competitors. Companies with ethical practices tend to be more stable and successful in the long run. When employees are happy and feel respected, they can be more productive and will want to stay with the company for a long time.
Ethics are therefore important to consider in terms of business leadership. In an age where it’s easy to do unethical things without thinking about the societal implications, it’s easier than ever to find yourself on the wrong side of business ethics if you don’t put a strong emphasis on them from the beginning.
What Does Ethical Mean?
When it comes to a company’s ethical behavior, what that means is that they abide by a code of ethics. This code is often developed by the board of directors or some other group, and is similar in nature to a company’s mission statement or its core values. These are instructions, or rules, that the company goes by to ensure that it and its employees do what is right.
It’s important to note that while a company may have a code of ethics, and many do, it’s also possible for unethical practices to exist in spite of this. If a few employees are willing to violate their ethical standards with impunity, it could still happen. It takes strong leadership from the top in order for a company’s code of ethics to be put into practice. When there is little or no leadership from the top about ethical behavior, the integrity of the entire organization will suffer over time.
Why Should You Care About Business Ethics?
Ethics are important no matter what industry you’re in, but they’re especially important in business. If your company isn’t making honest and ethical decisions, it can be difficult to make money and be successful despite working hard and having good products or services. The main reason that this is important is because of how people perceive things from a distance, whether it’s across a border or through the media. Ethical practices tend to be more respected and commonly viewed as positive than unethical practices. So, if a company is being badly perceived for its ethical behavior, it will have a much harder time recruiting new employees in the long run.
Businesses that use ethics as part of their leadership are also able to take steps to insure that their customers feel respected and satisfied with what they’re buying- which will bring them back and keep them coming back. Ethically-run businesses won’t lose customers over matters like price or service. They’ll only lose people who are completely unhappy with their circumstances- people who refuse to buy from them again because they find the situation unsatisfactory in some way.
Ethics are important to business in many other ways, as well. For example, if you’re looking to do business with an individual or company overseas, it’s important to know whether they’re following ethical practices. Many countries have different ethical standards than the U.S., so if you’re not careful, you could end up doing business with a nation or person that has deplorable practices in place. This can create a burden on the local community of that country that might otherwise not be there- especially if your company is known for its unethical behavior and is seen as an example of it here in the U.S.
What Are the Main Types of Business Ethics?
Ethics can be broken down into many different types, including:
Social Responsibility/ Corporate Social Responsibility (CSR): This is similar to ethical practices in that it means that a company knows how to act ethically and responsibly towards the environment and their community. CSR might include providing affordable goods or services to the elderly, helping local charities, recycling waste for energy and other things like that. There’s also a part of CSR called being “corporate citizens,” which entails a company being aware of its impact on the communities it operates in. That’s about as far as it goes- but business ethics go much further than this type of CSR.