Why you should imbibe good business ethics in your organisation

June 2, 2017 | by | 0 Comments

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The general concept of ethics is hard to define as there is no absolute (agreed upon) definition of what ethics means.However,ethics can be seen as the base rules by which we live. It is seen by some as knowing the right and wrong and doing the right. It can also be seen as the morally acceptable standard in the society by which we do things.

Business ethics is therefore, knowing the right and the wrong and doing the right in the workplace, this is in relation to our products and services, relationships with one another in the workplace including all stakeholders. It is the moral compass that guides managers and business leaders in their daily business operations.

Business ethics has become a specialised discipline just like many other management disciplines like public relations, which was given birth to because of the need for positive public image of an organisation and human resources that was born out of the need for better management of an organisation human assets. So also came business ethics out of the need for more guidance of business leaders to ensure their business dealings is in tune with commonly acceptable standard in the society and does not hurt others. There are so many reasons why you should give attention to business ethics in your organisation as discussed here:

Attracts more Investments

By giving attention to strong business ethics, your organisation is positioned to attract more investment than those with low ethical values. Most investors avoid investing in businesses with bad ethical value, which may return to hunt the business thereby affecting their investment at the end. Been convinced as an investor that your organisation had strong morals, pledging to do business in responsible and ethical manners, gives them the confidence to invest their money in your organisation with the assurance that your organisation is utilising the money in a business that align with their own ethical or moral standard.

Apart from satisfying their conscience, some investors avoid investing in firms with unethical practices as a way of influencing a change of their behaviour and instead invest more in organisation with high ethical standard as way of encouraging them to grow and stay in business while making it hard for businesses with low ethical standard to remain in business.

Attracts more Customers

There is no business if they are no customer that needs your services or products. The importance of ethics in dealing with your customers, which are your most valued stakeholders, cannot be overemphasised. Giving attention to ethical standard in your business dealings with your customers gives them a good impression of your organisation.This will make them to trust you even when there is an upward review of your prices or perhaps sometimes, there are little lapses in your services. Imbibing business ethics in dealing with customers promotes positive relationships.

Standard ethical behaviour towards your customers is to do the right for them even when doing otherwise could have benefited you more in the immediate. This should be like a natural thing and not because of legal concerns. Customers are more informed and smarter now than ever and can quickly detect when you want to defraud them. For your organisation to succeed therefore, you need to build trust and confidence with your customer by imbibing strong business ethics.

Customers are also attracted to products from firms that imbibe business ethics standard in sourcing for their raw materials, productions processes and labour activities.

Attracts Talents and retain them

Some research provides some evidence that suggest many organisations without clear business ethics have difficulty in attracting and retaining talents. Majority of workers, particularly in the US consider business ethics as important in an organisation they work for and prefers to be paid less in an ethical organisation than higher pay in any organisation with unethical practices.

Some researchers stated that organisations with high ethical standard have low employee turnover while those with low business ethics have employee high turnover. Because employees like to work in ethical organisations, imbibing business ethics attracts more employees desiring to work in your organisation thereby helping your firm to acquire the best talent at minimal cost of recruitment. It also helps to keep existing employees, which increase productivity and reduce employee turnover.

Compliance with regulations

Imbibing business ethics within your organisation position your firm to be less at risk of breaching regulations and been penalised. Business ethics ensure early detection of violations, which can be reported or handled.

It takes an organisation with business ethics to report any potential violation of regulations. It is considered a criminal offence if violations are reported in your business dealing with some organisations. However, penalties for organisations that made frantic efforts to act ethically can be reduced according to the guideline of some agencies.

Protection of reputation

Ethical standard protects the reputation of the organisation as it guides both employees and employers in their behaviours outside of the business environment. Reputation is an important asset, which can hardly be rebuilt once lost. Keeping to the business ethics of the organisations helps to protect the organisations’ reputation. Unethical practices destroy firms’ reputation and make it unattractive to important stakeholders, which can affects growth and profits.

Category: Business

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