The Importance of Good Morals and Ethics in Business
While it's true that every company's goal is to make a profit, being a good member of society that you are, it should go without saying that the company should always adhere to its own set of morals and ethics. This article will discuss the importance of good morals and ethics in business.
Having morals and ethics is not only important for the business, but it's important for the people who work there as well. The importance of good morals and ethics is one of the most contentious topics in the business world today. It's never been more important for businesses to put principles and values before profits.
What does morals, ethics, and values mean?
Morals are defined as principles concerning the distinction between right and wrong or good and bad behavior. Ethics can be described as standards of behavior that guide us in making moral judgments. Values, on the other hand, are considered more broad than morals. They may include religious beliefs or deeply held personal convictions that influence how we act in business and our personal life.
What does it mean to put value above all else? In business, this means putting the needs of your customers, employees, and clients before anything else. It means treating people with kindness and respect regardless of their social class or educational background.
Importance of Good Morals and Ethics in Business
Why ethics should be important to businesses — even if it doesn't seem like a glamorous or exciting topic — and how small changes in behavior can lead to huge differences in outcomes.
1. Ethics is about the business and its stakeholders:
Ethics is not morality, the latter being a comfortable sentiment toward which we may be willing to act. It is a matter of self-interest. Morality, on the other hand, means simply to wish your neighbor well and so feels good about him. The former is what you ought to do, the latter what you should do.
Many people think of business as being in opposition to ethics. They forget that businesses are often one of society's largest stakeholders — they need to care for just as much as any other citizen. It takes a fully engaged organization to produce a fully engaged worker.
It requires an organization that is dedicated to the purpose of its existence. Most organizations are not organizations in this sense. Most people tend to think of their organization as something apart from them. They see themselves as employees, members, or customers.
Businesses cannot afford not to be ethical — they need to be concerned with how their actions affect the lives of others and what they can do to improve their reputation. The more they invest in ethics, the more money they can save on problems caused by unethical practices, such as poor quality and unaffordable insurance, lawsuits and higher levels of employee turnover. If a company behaves badly, it can cause significant damage to its reputation — and that's bad news for everyone involved!
2. A company's reputation matters:
Business ethics is the reputation of a company, not just in the present, but also in the future. The more a business invests in ethics, the more profitable it will be and thus be able to invest even more. It's useful to think about a business as an extension of its employees. If people want to do business with your company, they're going to want to know that it has good ethics.
Therefore, one of the first questions asked at job interviews is often What was your biggest failure and how did you handle it?. It's not just important to treat your employees well, it's also necessary to do so to keep them happy and satisfied. If a company is seen as unethical, this can damage its reputation even if customers are pleasantly surprised by its service.
3. Ethics trumps money:
Despite what conservative talking heads may say (or think), a business cannot be equated with a person. It's not a living entity and it cannot act on its own. A business considers the actions of its employees when making decisions and is subject to both the law and the public's perception about how those actions affect its stakeholders — both of which are extremely important factors in determining how well it does.
With that in mind, consider some of the following examples: During an economic recession, a business might consider laying off employees as a way to reduce costs. If this action has a positive impact on profits, then it's probably a good idea — right? Well, yes and no. It depends on how this action will be perceived by stakeholders and what their needs are.
It may be beneficial for the company to lay off workers if they can manage to find new jobs easily (meaning they won't have problems paying bills), but it could make employees angry if they are not rehired later when the economy has improved (because this means they lost out on benefits or other opportunities).
4. Business ethics drives employee behavior:
A great business is built on a foundation of ethics, integrity and honesty. It must be so from the first day forward. A business has no conscience — but people must.
Being ethical is not a test of manhood or an endurance run — it's just a means to get what you want while making the lives around you better at the same time. Many rules can be followed to make this happen, including the following:
Don't lie or mislead others: If your employees don't know whether they can trust other employees, then your company won't know how to trust its employees either. Nobody wants to be confused, disappointed or in a situation where they might need to be dishonest so they might all benefit from honesty.
Treat your employees well, and reward them for doing a good job: If you don't pay them enough — or if you don't have any benefits — then it becomes more difficult to trust their opinions because they know their opinions won't count for much. Conversely, if you pay them well and provide them with benefits, then it's easier for your employees to look at the company as an extension of themselves.
5. Learning:
A man that studied revenge keeps his own wounds green. Businesses need to adapt to changing times, which means that their practices also need to change. Because of this, companies must work on improving themselves and maintaining good relationships with their employees, other businesses and the public at large.
The ruthless pursuit of profit is destroying our society. Profit comes from creating value. If a company fails to create or find value, then it must fail. If a company wants to keep its employees happy, it needs to make sure that their pleas for help will be heard and taken into account so that they can feel like part of the team rather than exploited.
For employees to see their earnings as fair, they need to know that the company is trying hard to ensure that their needs are met — not only because this will make them feel good, but because they want to get the job done in the first place!
6. Business ethics benefits the bottom line:
An ethical business does so many things to improve its performance, it has a positive effect on its bottom line. And that's why ethics improves the bottom line.
As explained above, ethics is more than just a moral issue. If a company does the right thing for others, it also makes money in the process. Businesses spend money hiring employees and paying them well, providing benefits and giving them opportunities to grow within the company.
Employees are happy because they get what they want and there are no problems with benefits or job security — so they like working for your company! All of this together means that good ethics can lead to profits!
7. Business ethics is profitable:
The winners in life think constantly in terms of I can, I will and I am. Losers, on the other hand, concentrate their waking thoughts on what they should have or would have done, or what they can't do. In many ways, ethics is about mutual gain. When businesses treat their employees well and find creative ways to help them out (thanks to competition for talent).
It means that both parties win in the end. Not only does this improve employee morale and create an environment where risks will be taken if they're beneficial to the company, but it also means that companies can compete in a better-informed environment.
8. Businesses are better off with a strict code of ethics:
You can always judge your quality by the enemies you make. Friendships and partnerships require good faith, and it is the same when working with other businesses or stakeholders. The more that you can agree upon in terms of ethical behavior, the better your relationships will be in the long run.
Whether it's deciding upon ways to treat employees or sharing information about future actions, it helps to have a clear idea of what is acceptable behavior from both sides.
9. Business ethics is not just "someone else's responsibility":
It's a good idea to set ethical standards for yourself and your company, but it is equally as important to remind your employees of this every once in a while. Being ethical doesn't just mean that your employees should do the right thing — it also means that they should remember to do the right thing! If most of the employees on your team have forgotten what an ethical decision is (for example, treating employees unfairly), then you might not be doing as much as you could be.
10. Business ethics can have a huge run:
The word 'ethics' means, literally, the study of what is good and bad. Now, people think that is a very obvious study. Of course it's a study of what is good and bad; but you know what? The question is not just whether it's good or bad, it's how good and how bad.
Ethical behavior can go up against immoral or unethical practices so often that in many instances (such as the example above), ethical acts win out over unethical ones thanks to their consistency. As such, if you want your company to be successful in the long run, then you'll want to be ethical.
You need only look at the business ethics scandals to see that companies that fail to act ethically, in the long run, tend to be less successful than those who do — and not just from a financial perspective!
11. Ethical behavior is its reward:
What a man believes may be ascertained, not from his creed, but from the assumptions on which he habitually acts.
Being ethical is not always easy. It can get you into trouble with customers, other businesses or even your employees sometimes. However, there is a certain satisfaction that you can only get from doing the right thing.
As explained above, ethics is not just right or wrong — there are times when it's better to do good by harming others (such as in self-defense), and other times when it's better to do wrong by helping someone else out a jam.
What matters most is whether or not you can deal with the potential repercussions of your behavior and still sleep at night without feeling guilty. If you can look at yourself in the mirror and feel proud of your actions (or lack thereof), then you're on the right track when it comes to business ethics.
12. Ethical behavior is profitable in the long run:
A principle is a simple, clear, affirmative statement of what one believes. It is not to be confused with a goal, an aim, or an ideal. The difference is this: A goal is what one wants to achieve; an aim is what one aims at; an ideal is what one imagines or pictures. But a principle is a standard.
Good Morals and Ethics to Dos
Every company is going to encounter some type of ethical dilemma at one point or another. It’s inevitable and it can be difficult to deal with, but there are a few things that businesses can do to handle this kind of situation properly.
1. Educate yourself and your team on ethical issues
First and foremost, it’s important to educate yourself. You can’t have an ethical problem and not know that it exists or what you should do about it. By educating yourself, you’ll be able to recognize when something unethical is going on. You can also talk to your team about these things so you can get a second opinion from them as well.
2. Calculate the cost of unethical behavior
The best thing you can do to prevent unethical behavior is to calculate the cost. Once you know the cost, you can be sure that it would be a lot less expensive to do business ethically than it would be on the other side. The key is that no matter what happens, you’ll know exactly how much extra money you have to spend if an unethical situation occurs. This can keep you from making any hasty decisions and it will also help to ensure that the millions you’re spending on your business are spent wisely.
3. Create an ethics policy
Most companies have some sort of ethics or code of conduct. You need to be sure that it aligns with your company values, but in general, having a written policy is important when it comes to the ethical dilemma. If you have an ethical dilemma, you’ll want to refer to your policies. At the end of the day, your policies will be what help guide you and put into action the things that you’ve learned from this article.
4. Know how to report an ethical issue
If there is unethical behavior that could harm a company in any way, there is something that needs to be reported. After the report has been made, you need to know how to act. You’ll want to be sure that you’re following proper procedures while still making it a point that you are protecting the interests of your company at all times.
5. Give training and education on ethics
Even if people do report unethical practices, ensure that they understand what happened and why it was wrong. Make sure that everyone understands why something is unethical and give them some tips on how to prevent it from happening in the first place. This will make it cheaper for your company in the long run, which is always a good thing!
Every company should have an ethics policy so they can deal with situations like these when they occur. This will make it easier for you to handle them and it will also show your employees that you are serious about doing business ethically. You’ll find it a lot easier to deal with unethical behavior if everyone is on the same page.
Final Thoughts
In the end, it’s all about staying true to your values and doing what you believe is right. Even if it costs you a little money or makes you look bad to someone else, make sure that it’s what you believe in and that the profit from it more than makes up for losing points with someone else. Ethics is all about doing what you feel is right in the long run.
By making sure that you are focusing on your vision and not just short-term gains and profits, you’ll be able to see which decisions ethical and which ones are aren’t. If you don’t, there is a chance that you could end up doing things that are unethical and not even know it. This can be harmful to your company in the long run.
Do you feel like you are struggling with putting "strategy" and "business growth concepts" in place that make a difference? Doing it all is overwhelming! Let’s have a honest discussion about your business and see if the Power of 10 can help you. Click “HERE” to have a great conversation with our team today.
Written and Published By The Strategic Advisor Board Team
C. 2017-2021 Strategic Advisor Board / M&C All Rights Reserved
www.strategicadvisorboard.com / info@strategicadvisorboard.com
SAB Foresight
Receive updates and insights
SAB Foresight Signup Form
Thank you for subscribing.
You will receive the next newsletter as soon as it is available.
Copyright © 2017-2024 Strategic Advisor Board, LLC / M&C