The definition of “what is business ethics” varies, depending on the knowledge and scope of one defining it. Here we shall try as much as possible define and also simplify the meaning of business ethics so as to enhance better understanding and to give guidelines on how to set your own business ethics as a businessman.
Firstly, Business Ethics can be defined as the set of moral rules and regulations that constitute how businesses operate, how business decisions are made and how people are treated. In business, as well as the customers and also the employee.
It can also on the other hand be the principles that guide the way a business behaves. The same rules that determine an individual’s actions also apply to the business. Acting in an ethical way involves distinguishing between “right” and “wrong” and then making the “right” choice
It is pertinent to know that the management of a business is the one saddled with the responsibility of instituting the business ethics, in which must be strictly adhere to by the employee and also the management itself.
Haven known that Business ethics is the underlying framework for carrying on a business by adhering to the generally accepted standards of “right” behavior, attention is also needed to be brought to the fact that a business with no genius and standard business ethics is liable to an untimely liquidation.
This would go in line with the saying that “one who fails to plan, plans to fail”.
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Let’s take a look at the essence and importance of setting business ethnics.
Ethics in Leadership
As it has been discussed earlier that the management team sets the standard on how the entire company runs it activities on a day-to-day basis.
When the prevailing management philosophy is based on ethical behavior and practices, leaders within an organization can direct employees by example and guide them in making decisions that are not only beneficial to them as individuals, but also to the benefit and well-being of the organization as a whole.
Building on a good foundation of ethical behavior helps create long-term positive effects for a company, including the ability to attract and retain highly talented individuals and building and maintaining a positive reputation and goodwill within the community.
Running a business in an ethical manner from the top (management) to the down (employee) builds a stronger bond between individuals on the management team, further creating stability within the company.
When management is leading an organization on a good ethical manner, employees are prompt to follow in those footsteps. Employees will make better decisions in less time with business ethics as a guiding principle; this increases level of productivity and overall employee morale.
When employees complete work in a way that is based on honesty, the whole organization benefits from it. Employees who work for a corporation that demands a high standard of business ethics in all aspects of operations are more likely to perform their job duties at a higher level and are also more inclined to stay loyal to that organization.
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Business Ethics Benefits
The importance of business ethics on the overall business organization reaches far beyond employee loyalty and morale or the strength of a management team bond. As with all business initiatives, the ethical operation of a company is directly related to profitability in both the short and long term.
The reputation of a business from the surrounding community, other businesses and individual investors is paramount in determining whether a company is a worthwhile investment. When consistent ethical behavior comes, it increases positive public image and reputation.
If a company’s reputation is less than perfect based on the perception that it does not operate ethically, investors are less inclined to buy stock or otherwise support its operations of such company.
To retain a positive image, businesses must be committed to operating on an ethical foundation as it relates to treatment of employees, respect to its environment and fair market practices in terms of consumer treatment and price.