Posted On08 Oct 2019
How Businesses Can Stay Ethical in a Money-Driven World
Ethics is affecting brands in ways never seen before. From a public reputation to employee productivity and even overall profitability, ethics plays a huge role in how today's businesses operate. And now more than ever, companies are being monitored to 'practice what they preach' to ensure they function more responsibly and are open with how they go about achieving their goals and targets.
Nevertheless, for many companies, operating ethically at all times is one of the biggest challenges of doing business. Sometimes, doing the right thing and making a profit does not amount to the same thing, and therein lies the moral quandary.
What is business ethics?
According to Investopedia, business ethics means "the study of appropriate business policies and practices regarding potentially controversial subjects including corporate governance, insider trading, bribery, discrimination, corporate social responsibility, and fiduciary responsibilities." As one can imagine, navigating these areas can be difficult, mainly because the space between 'right' and 'wrong' holds a lot of gray areas that turn judgments into the subjective matter, even when dictated by law. For this reason, business ethics is not a list of hard and fast rules, but a set of guidelines to help companies conduct themselves ethically and responsibly with reliable consistency.
"For what shall it profit a man, if he shall gain the whole world, but lose his soul?"
This biblical passage lies at the very heart of every ethical concern in business. Ethics relate to moral judgments between right and wrong and often involve looking at the long-term picture and rejecting solutions that lead to the biggest short-term profit. More companies realize that doing business ethically—and advertising these efforts to their customers—reflects positively on every area of their business.
The benefits of adhering to business ethics
According to the Society for Human Resource Management, businesses that adhere to ethical workplace practices and uphold corporate social responsibility "are more financially successful and have more motivated, productive employees," but more than the high monetary returns and reduced turnover rate, other significant benefits include:
⦁ Positive public perception - more customers are attracted to the products and services offered by the business.
⦁ Reduced recruitment costs - more applicants are interested in working for the company, which makes it easier to find the most talented employees.
⦁ Boost in investments - more investors are interested in putting money in the company, helping to keep the company stable.
Dealing with a company that clearly outlines their ethical values and adheres to them, give customers, investors, and other stakeholders the peace of mind that they are spending their money in a way that conforms to their moral standing.
How businesses stay ethical
Companies looking to improve their brand image and develop long-term relationships with customers will do well to ensure that measures are in place to ensure business functions and operations are on the straight and narrow. In a truly ethical company, you'll observe the following criteria:
- Well-developed ethical standards
A company must be able to formulate ethical and sensible policies that everyone would be willing to follow. These policies clearly define which practices and behaviors are and aren't acceptable. The definitions in the company's Code of Ethics should be able to address any confusion, doubt, or concern in the company's ethical practices.
- Leaders Exhibit Proper Behavior
Company heads from the top down should lead the way in making company ethics relevant, easy to understand, and useful. Their work reflects the company's values and philosophy, serving as an example for the rest of the workforce to follow.
- Ethics is part of the hiring process
When screening application materials, the company's Code of Ethics must be observed to ensure fair hiring processes that align with the company's values. It's worth noting that some aspects of the Code of Ethics usually overlap with legal responsibilities.
For instance, it's not only unethical to ask an applicant about nationality, sexual orientation, religious beliefs, marital status, and children—it's also against the law. As such, not adhering to the Code of Ethics can lead to a lot of negativity for the company as a whole. Likewise, employers can avoid legal tangles if they can ensure their hiring processes are free of perceived discrimination, unethical questions, and the like.
Ethical policies are strictly enforced
Of course, not every employee is going to uphold every single ethical expectation all the time, and some will break the rules at some point. That said, companies should hold each and every member of their workforce accountable for their actions, and enact ethical policies with consistency. Even if it involves managers, investors, and other members of the higher-ups, it's important for the company to demonstrate that it will not tolerate unacceptable behavior, and consequences will be meted out for violations. Holding everyone accountable is necessary to prevent the perpetuation of any destructive behavior before it becomes harder to control.
Corporate social responsibility is treated as a priority
Community involvement is the tie that binds the world's most ethical companies. Their adherence to their ethical mission compels them to have a genuine interest in leaving a positive impact on the world from which they benefit from. These companies take pride in giving back, whether it's raising money for local causes, providing free training and seminars, sponsoring community events, etc.
Following ethical business practices is a major selling point to many of today's consumers, and many companies are taking notice. When a company promotes ethics in the workplace, it improves brand reputation and creates a better culture for everyone involved. Likewise, it's up to the people involved to make acting with integrity and authenticity the norm in the workplace, rather than the anomaly.
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