In a world where people and businesses are becoming increasingly distrustful of each other, companies that have ethical business models come across as a breath of fresh air for customers that have no choice but to trust their products and services.
Applying ethical practices can sometimes prove to be easier said than done in the business scenario as some business leaders are not as ethical as they claim to be in public. However, choosing to be ethical or not is strictly a matter of personal choice on part of entrepreneurs, especially keeping in mind the large number of expensive lawsuits that have been filed against many big and established corporations over the years.
Ethics in business essentially entail maintaining high standards and meeting legal and moral obligations. Since most businessmen think in terms of profit and loss, compromising on ethics may seem like a necessary evil to them. However, organizations that have been able to successfully create healthy corporate culture are bound to have happier and satisfied workforce and customers. These organizations go on to establish relationships with their internal and external stakeholders based on trust and respect.
It is true that the culture of a company influences its employees and also the decision making factors at every level. Most large multinational corporations have policies related to Corporate Social Responsibility in place; stressing on the need to give back to society and adopt more environmentally friendly practices. In this post we would be focusing on how following ethical business practices make business sense and can be profitable.
Attracting the Right Talent
Strong business ethics will help you attract people who fit your company culture and relate to your business, thereby ensuring that you have trustworthy employees working for you. Your employees will respect your company only when they feel they are respected by you, which again boils down to the trust factor. Once you build a bond based on integrity and trust with your employees, they would feel proud of being associated with your business, avoid malpractices and become loyal instead.
The actions of your company and your employees reflect your company culture. It slowly becomes an influential factor towards how the public perceives your company. Based on this, your business can create a positive image and earn respect and adulation for what it does as well as gain a favorable market position, or it can create a negative image and lose out on customers.
Ethical practices will help you create a strong public image which can help your company tide over difficult times and withstand tough competition even in a slow economy. In fact, in a bad economy, people prefer to put their trust in companies they consider ethical. Hence, ethical business practices are crucial for building a good future for your company.
Impact on Partnerships
Partnerships, joint ventures and mergers will be a breeze if people feel they can trust you. The only means to finding such trustworthy partners is for you to maintain a good professional and industrial reputation.
Sound Decision Making
When your employees make note of the fact that your organization upholds ethical conduct, they will automatically make all their decisions based on these very same ethics. That will make you a happy and trusting businessman and will also augment accountability and transparency in the decision making process. Having a strong ethical background also works as a guide to employees when facing tough challenges. It will also prepare you to be able to empathize with your employees thereby boosting the validity of the code of conduct in your organization.
Minimise Distractions at Work
When employees have to worry about ethical concerns at work, it causes a distraction in their minds and that, in turn, results in a loss of productivity. This adds to your business costs. Such situations can grow if issues related to unethical behavior are not addressed and dealt with straightaway. Furthermore, they can also cause confusion and anger within the employees as they might think that you are practicing double standards. It is important to have a clearly defined policy on following business ethics for employees to avoid such situations.
Boost Team Spirit
When all your employees are in alignment with your company’s ethical values and vision, it creates a feeling of belonging and unity within the organization. Such connection goes a long way in strengthening the team spirit and motivational levels among your employees.
Having an ethical business model can do more than just create a positive impact on the people around you. It also has implications on the world in general as you are contributing towards making it a better place. It might take a long time and a lot of effort on your part to implement an ethical business model but it is worth striving for, especially when uncertainties loom large over all businesses.