Why businesses should act ethically

Compliance is not enough, it is the spirit of doing business ethically that needs to be embedded within day-to-day business activities. Outside businesses taking advantage of cheap labour or dominating local markets from an unfair position may make a profit in the short term, however in the long term this is a false economy.

Then, with increased regulation and pressures from investors, companies were asked to show they were working to ethical standards through their own reporting. Thus, an ethical dilemma is born: A globalised economy, a diverse workforce and a public more alert to ethical issues has meant that the landscape in which businesses operate is all the more complex.

Without this long view approach, sustainability will fail and future generations will suffer. Building a positive image in the public sphere helps your company unlock future opportunities and avoid intense public scrutiny during periods when your firm may struggle.

Companies have more and more of an incentive to be ethical as the area of socially responsible and ethical investing keeps growing. Business Ethics and Corporate Social Responsibility are all about bearing in mind the full weight of any corporate decision.

Ethical business: companies need to earn our trust

Decisions taken within an organisation may be made by individuals or groups, but whoever makes them will be influenced by the culture of the company. Openly Openness is a subset of honesty. If business leaders want their organisations to benefit from a reputation for ethical business practice and positive judgements of trustworthiness, they must take integrity issues seriously.

For example, they may: A stringent, clearly defined system of environmental ethics is paramount for an energy company if it wants to thrive in a climate of increased regulations and public awareness on environmental issues. When working for a company with strong business ethics, employees are comfortable in the knowledge that they are not by their own action allowing unethical practices to continue.

Business Ethics and Corporate Governance, Second Edition by A. C. Fernando

Corporations are entering a new era, the "prove to me" era. Senior management also need to be trained to develop ethical sensitivity - an understanding of fairness, openness, transparency, integrity, responsibility to others and the ability to recognise conflicts of interest.

Ethics is important to businesses for many reasons. The culture of an organisation is set by the tone at the top, whether by senior management or team leaders. Public Relations When your company, or the employees within your company, engage in behavior that is either ethical or unethical, the members of the public who interact with your company take notice.

If your company acts in ways the public considers ethical, your company enjoys an increase in public trust. Maintaining the promises it has made is crucial to maintaining that reputation. However, such customer data is invaluable to businesses, as they can use it to increase profits substantially.

Why is ethics important to business?

Knowing that the company they deal with has stated their morals and made a promise to work in an ethical and responsible manner allows investors peace of mind that their money is being used in a way that aligns with their own moral standing.

Investment must be made in training all staff from the board down in what it means to be ethical and to consider ethics when making decisions. Inconsistency is often the result of a company not caring enough about a person or group of people to take the time to provide a measured response to some request or action on the part of an employee, customer, community member, or shareholder; and it sends a strong message of not caring to the person being dealt with inconsistently.

Employees make better decisions in less time with business ethics as a guiding principle; this increases productivity and overall employee morale. Another survey shows that fewer than one in five trust business leaders to tell the truth. Since business transactions in our increasingly global economy involve businesses with employees and owners who come from different backgrounds interacting with each other on a regular basis, business ethics provide a common ground everyone can agree upon.

Trust me and show me are no longer considered good enough. For more information about Ethics at work, there are further courses and workshops available: Working as an ethical business has many benefits, not least of which is the ability to attract and keep investors, employees and customers.

I'd like to see a more rounded programme where candidates were asked to consider the impacts of their decisions, in moral as well as financial terms. Everyone is nearly always better off when the company is operating successfully, generating jobs and economic value, and actively contributing to the vitality of the community.

In other words, you want to behave nicely towards people who can help you. The increasing number of investors seeking out ethically operating companies to invest in is driving more firms to take this issue more seriously.

Without consistency, a person doesn't know what to expect, or how to go about getting what he or she wants. Businesses can increase sales or increase their reputation. Similarly, unethical conduct can hurt your business financially and tarnish its image, leading to diminished future opportunities for your company.

Where individuals, such as fishermen, cannot afford to be ethical about some of their work — for example overfishing or taking due care for coral or other species — and are unable to take into account the bigger picture during their day to day operation, it falls to the government or other officials to introduce laws and regulations and enforce them.why should businesses act ethically?

An organization has to be ethical in its behaviour because it has to exist in the competitive world.

Why is ethics important to business?

We can find a number of reasons for being ethical in behaviour, few of them are cited below: Most people want to be ethical in their business dealings.

A globalised economy, a diverse workforce and a public more alert to ethical issues has meant that the landscape in which businesses operate is all the more complex. Dec 10,  · The decision to behave ethically as one individual to another is easy for any decent moral human being, but it is easy to forget the impact a large, faceless business can have on the world.

Business Ethics and Corporate Social Responsibility are all about bearing in mind the full weight of any corporate jimmyhogg.com: Laran Joseph. why should businesses act ethically? An organization has to be ethical in its behaviour because it has to exist in the competitive world.

We can find a number of reasons for being ethical in behaviour, few of them are cited below: Most people want to be ethical in their business dealings. Jul 27,  · Businesses not following any kind of ethical code or carrying out their social responsibility leads to wider consequences.

Unethical behaviour may damage a firm’s reputation and make it less appealing to stakeholders. Conducting yourself ethically as a small-business owner and encouraging your employees to engage in ethical business conduct brings about several benefits for your company.

Similarly, unethical conduct can hurt your business financially and tarnish its image, leading to diminished future opportunities for your company.

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Why businesses should act ethically
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