Business ethics look to implement right business policies and practices keeping in mind the subjects which may lead to a controversy in an argument.
Under the umbrella of business ethics, the issues which can be included are corporate governance, fiduciary duties, insider trading, bribery, differentiation and discrimination.
Business ethics are mentioned in the laws, which provide the basic framework which can be followed by businesses to attain approval by public.
If we have look at what business ethics is all about, it aims at ensuring that an elementary trust level exists among the customers or consumers and the other players in the market in conjunction with the business. Let us consider an example in this reference, if there is a portfolio manager he must pay equal attention to the portfolio of his family members or be it a small investor or an extremely rich client. If such kind of behaviour is put in to practice, it ensures that the general public receives a fair treatment.
Business ethics were conceptualised in the 1960s when organisations and corporations felt that the society is becoming more consumer based and is very much aware and concerned about the responsibility towards the corporate world, the environmental issues and the social issues and the causes. In that decade, the main focus was on social issues.
Business ethics have evolved since then and have become like a moral code of conduct differentiating between the right and the wrong. Business ethics make an attempt to prove as a reconciliation between what should be done by a company on a legal basis versus continuing to maintain the business’s advantage over its competitors. Many business concerns show business ethics in many different ways.
Business ethics principles
There a specific set of principles that govern the ideal behaviour based on ethics and if they lack, it may lead to the downfall of many businesses and the people connected with them, who actually sound very talented and intelligent.
The business ethics principles are:
- Leadership-To integrate all principles and then take informed decisions about the personal and professional spheres of life.
- Accountability-Be committed to follow ethical rules and ensure that others are also following them.
- Integrity-To follow the principles of honesty and trust each other and do what is right ethically.
- Mutual Respect-To respect each other’s space, dignity, privacy and empathy.
- Honesty-Good and bad aspects of anything relating to the business should be communicated in the same way.
- Respect the law-based on ethics, the leader should try to follow the law as much as possible and not exploit a loophole to their advantage.
- Responsibility-Make employees take responsibility of their work.
- Transparency-A company should be transparent about its progress, changes, salary and organization structure etc. to its stakeholders like the shareholders, employees and their family members etc.
- Compassion-All the elements which are in direct contact with the business like the employees, the business partners, customers etc. should be a matter of concern and their well-being should be taken into consideration.
- Fairness-Everyone should be given the same opportunity and treated equally.
- Loyalty-The leaders should be committed to the company and its employees and maintain confidentiality.
- Concern for the environment-A business concern should be functioning in such a way so that it does not raise environmental concern.
Business ethics and their importance
Business ethics defines a specific code of conduct which governs the behaviour of employees of an organisation from the lower level executives, to the middle management level employees to the new trainees and interns of the company. If all employees take decisions based on ethics the company also earns a good reputation on ethical grounds. The reputation of such a company is ever growing and the company can reap the following advantages:
- Brand awareness and its expansion
- Better negotiation ability
- Better trust in the product or service the company offers
- Better customer retention and its growth
- Attract best talent
- Attract good investors
Overall, the company revenue increases manifold.
