‘Ethics’ is a resounding term. Not only have we heard about it in schools or academic institutions but also in offices. Moreover, in college or university, professors would strictly stress on this team, making sure every student follows ethical values in their lives. But, what really is business ethics and why is it so important? In simple terms, the way moral values and ethical beliefs guide the decisions of an organisation through various laws, rules, and regulations, it is called business ethics. For businesses to flourish, not only do the employees have to follow the ideals on which the organisation was established but even the top brass has to identify the rights and wrongs. Only if we follow the letter and spirit, a complete decorum will follow the suit. In this blog, you will come to know what Business Ethics is all about, its meaning, significance as well as components!
Understanding Business Ethics
Ethics, as a term, has been derived from the Greek word ‘ethos’ which means character or morals. It is that section of information or understanding that deals with a moral code of conduct or principle governing our activities. But when it comes to business ethics, it necessarily means following all the rules and standards set by a company or an organization. Once familiar, its code of conduct will lead us to an understanding of established morals on which the company works.
Since it lays emphasis on policies pertaining to Corporate Social Responsibility, Corporate Governance, Trading, handling malpractices, Bribery and Forgery, amongst others, it helps achieve all the desirous targets of an organisation in utmost transparency and honesty.
What is its Significance?
The importance of general and business ethics, in particular, is huge. If we talk about following ethics in the business environment, the code of conduct framed by an organization plays a pivotal role in helping an employee to understand their rights, responsibilities, and duties. Let’s understand thoroughly the importance of business ethics in day-to-day corporate life:
- Following business ethics strictly leads to profits, both in terms of boosting sales, revenue generation, customer attraction, and workforce development.
- From manufacturing, distribution to wholesale and retails, efficient dealing with clients and strengthening of employment policies leads to transparency in the business landscape. In order words, everything will be in hunky-dory, from customer satisfaction to pitching of sales, if ethics are properly taken into consideration.
- Business ethics help the company to get talented employees on board which ultimately reduces the recruitment cost and brings productivity in the company.
- It also helps in setting a safer and conducive environment in the company for employees to work in.
- Business ethics will create a positive image of the company. If both the employees and an employer follow business ethics with enthusiasm without getting indulged in unscrupulous activities, it will create a positive image in the society of the organization.
- If business ethics are strictly followed, it will safeguard consumer rights as well. Not only will they get complete information about what they are consuming, but their grievances can be redressed ethically.
- It will ensure there are no unfair or malpractices taking place in the company.
Hence, such ethical practices prioritize the needs of consumers, ensure transparency, and diversity in the workplace, respects consumer information, reduce conflict of interest, endorse teamwork and build corporation.
Components of Business Ethics
When it comes to business or corporate ethics, there is a wide range of components that need to be thoroughly understood and practiced in order to turn a business profitable. Glance through the following points to understand each of them better:
Human and Social Values
It includes how an employee in the company is being treated within the workplace. This type of business ethics also ensures the value of money when it comes to dealing with customers, investors, and shareholders in an honest, empathetic, and professional way. Furthermore, honesty for the local community in which the company is operating is another factor that cannot be ignored.
Another crucial element of running a business is to keep the client and project details confidential. It is important for all parties involved to adhere to the laws and regulations of the company strictly when it comes to maintaining confidentiality.
One of the most common business ethics in job vs business is transparency. Only that workplace that allows its employees to share and get their grievances addressed can be called a healthy place.
Keeping in mind the current environmental degradation, new businesses or companies should look for sustainable alternatives to conventional energy resources. This is an important component of business ethics which ensures environmental protection of the place where a company is situated. This must include adhering to all rules, laws, and regulations as stipulated by the country, segregating and discarding waste properly, judicious use of non-renewable sources, etc.
A company will witness growth only when it is financially sound. It is obviously not bad making a profitable business, however, this should not be done by exploiting their creativity of employees solely for the company’s benefit. Furthermore, conducting beneficial social activities under Corporate Social Responsibility [CSR] also constitutes a part of business ethics.
The ethical awareness in business organisations has increased considerably. Every corporate, through its own sets of business ethics, is working towards maintaining transparency, human and environmental values and with the result, the growth has turned unmissable. Just like others, we also believe in building and maintaining a strong bond between the counsellors and students when it comes to career-related guidance. Take the assistance of our counsellors at Leverage Edu who will provide all the admission related help to you to study abroad!