Business Ethics: The Importance Of Business Ethically

The importance of doing business ethically

If you want to test a man’s character, give him power – Abraham Lincoln

What a profound statement this is! This quote really encapsulates the essence of what we are about to discuss further.

As per the Webster’s dictionary Ethics is defined as a set of principles of right conduct, or a system of moral principles. Business ethics can be defined as a set of standards, norms and principles that essentially guide an organization’s conduct of its activities, internal relations and interactions with its external stakeholders. Business ethics fundamentally mirror the values of business, one of whose aim is to determine the primary purposes of an organization.

We are discussing a topic as important as

The guiding principle that leads an individual applies to business as well. When one conducts in an ethical way it involves distinguishing between “right” and “wrong” and then ultimately making the right choice.

When a business is known for its dealing with honesty with all the stake holders, both internally and externally; it is more likely to become successful.

The importance of the ethics in business can be further elaborated as below:

Ethical Management practices yields recruitment of the best talent for the organization’s requirements

It is a known fact that when a business is managed well, employees usually feel that they are being treated fair and this can help the company to employ and maintain excellent employees, which is critical for the organization’s ultimate success.

Ethical behavior can only attract customers towards the organization boosting the sales and profits

Consumers are quite touchy when it comes to business who practice business ethically and that only yields into higher sales and profits. Also they generally tend to endorse such brands or the company.

If one is looking to sustain the business for a long term, only ethical practices help you achieve

And the wealth maximization concept states that the main objective of any business is to increase and maximize the wealth of the shareholders to ensure long term survival of the business.

Such businesses those are not linked to unethical practices may always seek attractive investments from investors and this behavior by the investors will maximize stock prices of the business which has a direct impact on the wealth maximization concept.

It always begins at the top

Ethics must begin at the top of every organization. It is a leadership issue and the CEO must set the example – Edward Hennessey

With strong leadership that is based on strong ethics and moral values, every stake holders/ employees tend to adopt similar set of values and in such instances the direction taken by the organization towards achieving their goal results into a common vision and such guiding principles usually lasts for generations into the organization

There are no shortcuts

It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently – Warren