What is the Importance of Business Ethics?
The importance of business ethics should be obvious throughout every area of the business. When a business is known for dealing honestly with all people, from its employees and customers to shareholders and vendors, it is often more likely to become successful. While ethics is a subjective topic that may mean different things to different people, it's still very important in all types of corporate settings.
Business ethics play an important role in hiring and business management practices. The first people hired should be aware of the company's values and ethics practices, so as the company grows and expands, those practices continue to be upheld. When a business is managed well, employees will usually feel that they are being treated fairly; this can help the company to hire and retain excellent employees, which is instrumental to its overall success.
Of course, the importance of business ethics goes beyond the direct relationship between its employees and management team, extending out to how the company deals with the local community and its social responsibility. A business that behaves in an ethical way as a member of the community will often find that the community offers its support in return, which can also be invaluable to the success of the company. This may be done by assisting with community events, donating funds in support of local charities, or simply behaving honestly in dealings with other local businesses.
Business ethics are also important in financial matters. This becomes clear when the business is dealing with people such as vendors and shareholders. A business that does not behave with integrity may have difficulty conducting business, as vendors who supply the materials it needs might not be willing to extend credit, while shareholders might no longer be willing to invest their money. While the initial profits might be high, the appearance of ethical problems within the business can make investors uncomfortable risking their money.
Customers who do not feel as if they are being treated fairly by a business will often not hesitate to do something about it. Social networks have made sharing negative information about a company much easier, and customers do not hesitate to do so. It does not take much bad press for sales to decline. This principle works in the opposite direction as well, however: customers who feel as if they are dealt with honestly are more likely to tell their friends to visit the business.
Latte31-I agree. I think that business ethics training should be offered in college as well as when one starts working for a company.
A company with strong corporate ethics with its customers will also have strong ethical values with its employees as well.
They will not hide the problems of the company to its employees and they will also not inflate the company in order to raise the stock price.
Ethics in business also require disclosure of relationships and an open book policy for the employees.
There are basically no secrets kept from the employees and all employees know where they stand. There are also no personal relationships allowed with supervisors and subordinates because this would cloud their ethical judgment.
Honesty and integrity is the cornerstone of any business ethics practices and are the values found in most business ethics books.
Moldova- Wow what a great story. I agree that ethical business practices are important because it allows customers to trust your company and keep them coming back.
Once a customer has developed a certain level of trust within a company most customers will stay loyal because they appreciate the high level of corporate ethics.
The example of the car dealership is a good one pertaining to ethical business practices. Because they honored their word you will probably never go to another dealership again.
They may have lost a few thousand dollars but they know in the long run their reputation is worth far more than that. They also stand out because the car industry has a strong negative perception among customers but this ethical business will definitely stand out.
Ethical values are important because corporate ethics says a lot about the organization. An ethical business is honest in every aspect of their business.
They also focus on offering the best possible product or service to their customers and stand behind their products or services.
They also keep the promises that they make regardless of how it affects the business. For example, my husband was looking for a Buick Enclave the specifications of the car totaled about $41,000 which was the agreed upon price with the dealer.
The dealer made a mistake and outfitted a much higher end model with the additional equipment but this car was $47,000 because it had all of the upgrades.
When the dealer realized that they added the upgrades to the wrong model they told my husband that they would get the model that he wanted within two days or they would honor the $41,000 price on the upgraded model.
Well, the dealer called and they could not obtain the model that my husband wanted so they did honor the price and gave my husband the $47,000 model for the $41,000 price.
This company has business ethical practices in place that will make us lifelong customers because they are honest and do their best to serve their customers. It is rare to find a company with such ethical business practices.
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