Importance of Business Ethics
Ethics in business are not only common sense, but business sense as well, no matter if you run a huge corporation or a little home business from your garage.
Some people raise hell when they get bad service or are overcharged for a product. But the vast majority of people are too busy or too tired to make a scene or write letters of complaint. This majority of customers just make a quiet mental note of what a useless business you have, and vow to never go back there, and they usually don’t. These days of online shopping and delivery to your doorstep services, it’s really easy to find an alternative supplier.
So honesty and respect really do pay in the business world, especially in the long term. Many hot shot whizz kids have made their fortune by partially ignoring business ethics and honesty, and this was one of the main contributing factors to the latest recession we are presently enduring. Bad ethics and dishonesty, greed and rudeness do not help a business at all, and the business will collapse when the customers all go elsewhere, or when the whizz kid crookedness is found out and punished.
It doesn’t take a rocket scientist to work these simple principles out. So why do highly educated professionals and seasoned businessmen and entrepreneurs make the mistake of forgetting business ethics? It requires the courage of your convictions and a good moral base in the individuals. Dishonesty does give you cash in the short term, much like sawing off the branch that you are sitting on gives you timber for a short time. So it will always be a temptation to those with weak morals coupled with financial pressure. In many cases it takes raw courage to be honest, but out of the troubles that businesses go through, its reputation grows, and businesses with good reputations are successful businesses. Naturally, you still need a good business plan and a hungry market, as well as ethics, to be successful. But good ethics are vital to keeping you successful.
Business ethics that are important are:
1. Charge the customer a fair price. Don’t be greedy.
2. Treat the customer with respect, as though he is better than you.
3. Do not purposely sell the customer defective items or advice, or anything that is harmful or unsafe.
4. Always tell the customer the truth.
5. Treat your staffs like you treat yourself, or better. Be kind and generous to your staff.
6. Pay your suppliers promptly.
Ethics do take courage, and hard work. But they are worth it. And they are good business sense too.
Commercial aspirations have never accepted any constraints and so are about the corporate. Money spinning is something that is more about the reward than the ethics. Yet somewhere there has to be a balance between the two. It is this very juncture where the critical negative of capitalism lies. The challenge can be how to incorporate social responsibility with lucrative demeanor. Though a company is committed to the highest standards of social and business practices, it takes an effort to establish and to maintain them. The delivery of success to the clientele results from the efforts of an organization’s people – it is their resourcefulness, professionalism and dedication that give the company its leading edge as one of the forerunners in the respective industry. Just to ensure all this, the directors and employees are expected to observe the highest standards of integrity in the conduct of business.
Coming back to the topic to be discussed, ethics is not the same as self-interest however entrepreneurs often want to ensure that it is the same. They want to ascertain that “one can do well by doing well,” meaning that one can succeed in business by being ethical. There is no denying that one can often do well by doing good. A company with a code of business ethics is more likely to build a good reputation, which is more likely to bring financial rewards over a period but good behavior cannot be grounded in tangible reward alone. People who are interested only in reward will conduct business ethically when it suits their purpose but they will go astray whenever the incentives diminish. There is a profound confusion here too. To look to ethics for motivation is to misunderstand what ethics is all about. It is like studying finance to find a reason to make money.
Finance does not teach one to want to be rich. It teaches one how to be rich, assuming one wants to be rich. So it is with ethics. Ethics teaches one how to be good, assuming one wants to be good. It is important to know that one can normally do well by doing well. Otherwise ethical people could go into business only with a high risk of failure. Business ethics, however, addresses the opposite question: how can one do well by doing well? It begins with the premise that enterprises want to do something good with their lives and investigates how to accomplish this through business. In other words, it treats profit and business success as means to a greater end, while in the hind side making the world a little better. Ethics are a set of moral principles which are recognized in respect to a particular class of human actions or a particular group, for instance the medical ethics, legal ethics, teaching ethics that brings together people of the same profession.
These principles deal with values relating to human conduct with respect to concepts such as being good or bad, noble or ignoble, right or wrong etc. These values guide members of a group to act in a manner that is consistent with the values and standards as established. Business ethics are those virtues that business people apply when making business decisions. They are the standards expected within the business world, even if they are not written down and which business people ought to adopt. For instance business people are expected to afflict least suffering to their customers, being fair in their dealings and nurturing an enduring virtuous corporate character in totality.
Business ethics are important because they keep business people to operate within a moral and legal pedestal which not only leaves them satisfied internally but also increases sales because most people like dealing or doing business with honest businessmen. Also if the public or your potential customers perceive you to be engaging in improper business deals, they will shun you.
Good business ethics should be embraced by all businessmen because engaging in unethical practices, which may include breaking the law, may lead to heavy fines or lack of trust by members of the public. Some of the business ethics include the following:
1. being trustful by recognizing that customer is the king. Customers want to do business with companies they trust and which they perceive to be showing them respect. When a business entity is trusted, it creates a loyal clientele.
2. Business people should be ready to meet the obligations of their customers and business partners regardless of anything else. Business people should offer their end of the bargain at all cost because this is the only way to cement customer and business partner’s loyalty.
3. Engaging in fair trading practices like guaranteeing a safe workplace for your employees, fair pricing for your products, that will at least cover the cost of production and treating you customers well among others will guarantee a high business turnover.
4. Every businessman wakes up every day with the intent to make profit. When a business operates within ethical realms, there will always be clear indications for growth. Equally, a business needs to make profit so as to meet its ethical obligations to the company, its employees, the authorities and customers.
5. In essence, being ethical as a business person builds the image of reliability and establishes reputation with your customers, the two things that are very important to a business.
Most business people do not take a keen interest in implementing business ethics. Most of them think that making profit is the most important thing but as they realize later, no matter how hard they try, they do not achieve their objectives.