Why is business ethics so important? Is it not enough to comply with the letter of the law and the rules of society? What are the advantages for the company?
These are all interesting questions. Many business owners think that maximizing profits is the company’s primary obligation. Other owners feel that operating a business in a transparent and ethical manner is also important. Both business management and business ethics are about making the right decisions. Does one have to exist to the exclusion of the other?
I don’t think so, and here are the reasons why managing a business ethically is important:
1 It sends the right message to customers and clients. With all the options available today, who wants to do business with a dubious company and with ethical challenges?
two It is the right example for company employees. The temptation to cut shortcuts or behave in an illegal, immoral or unethical manner is reduced if employees are familiar with the company’s code of ethical conduct and the certainty of its application.
3 – It can make the company a desirable place to work. Recruiting and retaining high-quality employees is much less expensive than managing a turnstile, where people come and go in large quantities.
4 It establishes a prism through which a company sees not only normal business transactions, but the handling of extraordinary events or crises. When all options are considered, ask “What is the right thing to do?” ultimately, it becomes the basis for action.
5 It provides a clearer focus for the company. This clear focus is not only found in day-to-day tactical operations, but also in the company’s strategic planning.
6 Helps protect the company’s interests. Ethical behavior does not always isolate a company from lawsuits, negative publicity or other negative and costly conditions, but it can certainly reduce the odds or mitigate the damage.
7 It helps to protect the interests of everyone with whom the company comes into contact. Will suppliers become more reliable if they know they will be paid on time? Will regulatory agencies be more useful and flexible? Will customers trust you more? There is an obvious likelihood that the previous answers will become “Yes” with a company that is considered highly ethical than with one that is not.
8 It promotes mutual respect and integrity. This can happen both within the company and with those with whom the company deals.
9 It promotes responsibility. This can occur not only within the ranks of employees, but also with key executives and owners.
10 It can yield a reputation in the market that can be beneficial and sustainable. Isn’t that a desirable condition for any company? If not, it certainly should be.