Does Ethics in Business Pay Off — by Mel Feller

Business ethics (also known as corporate ethics) is a form of applied ethics or professional ethics, that examines ethical principles and moral or ethical problems that can arise in a business environment.
Ethics concern an individual’s moral judgements about right and wrong. Decisions taken within an organization may be made by individuals or groups, but whoever makes them will be influenced by the culture of the company. The decision to behave ethically is a moral one; business people must decide what they think is the right course of action. This may involve rejecting the route that would lead to the biggest short-term profit.
Ethical behavior and corporate social responsibility can bring significant benefits to a business. For example, they may:
Attract customers to the firm’s products, which means boosting sales and profits
Make individuals want to stay with the business, reduce labor turnover and therefore increase productivity
Attract more employees wanting to work for the business, reduce recruitment costs and enable the company to get the most talented employees
Attract investors and keep the company’s share price high, thereby protecting the business from takeover.
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 positions with their own moral standing. 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. Customers are at ease buying products or services from a company they know to source their materials and labor in an ethical and responsible way.
Businesses not following any kind of ethical code or carrying out their social responsibility leads to wider consequences. Unethical behavior may damage a firm’s reputation and make it less appealing to stakeholders. This means that profits could fall as a result.
The natural world, which can be affected by a lack of business ethics. For example, a business which does not show care for where it disposes its waste products, or fails to take a long-term view when buying up land for development, is damaging the world in which every human being lives, and damaging the future prospects of all companies.
Ethics is important to businesses for many reasons. Businesses can increase sales or increase their reputation.
Eighty Eight percent of consumers believe it is important for companies and brands to behave ethically — but the most significant factors when shopping are price, value and quality, according to new research from online sourcing and optimization specialists Trade Extensions on UK and U.S.
For decades, in many work contexts, ethics was something that couldn’t be discussed. Managers would mask decisions motivated by ethical concerns with language that lacked moral content, as it was the only way they could make them acceptable for a business audience.
This phenomenon — the moral muteness of managers, was identified and reported by ethics researchers. In those days, some business people would even say that ethics is OK for Sunday but not during office hours, where it is a dog-eat-dog world and ethics is irrelevant or unnecessary.
However, we have moved on. Now business leaders, regulators and politicians are a lot more comfortable uttering the word “ethics”, and they support the need for ethical values and behaviors in business. There is also a realization that while hard elements such as laws, regulations and policies are essential, it is also important to pay attention to the culture. Having an ethical culture is fundamental to organizational ethics. Nevertheless, sometimes it seems to be used as another element of the ethics toolkit: code of ethics, policy, leadership, culture, and so on.
I think culture is a consequence of everything we do, and it is also the driver of what we do. The simplest definition of culture is “the way we do things around here”. Now, the way we do things around here is affected by all inputs; such as an entity’s mission, objectives, strategy, rewards, expectations, leaders, colleagues, competitors, regulation and policies. The way we do things encompasses what we do, why we do it and how we do it.
Culture is like a person’s character. Character describes the moral make-up of a person. It is usually pretty reliable and stable. We generally see it as something that develops gradually and, while not impossible to alter, any changes do not happen quickly and cannot be imposed.
For a company or an individual; to have an ethical culture, ethics must be alive in everything that happens there. Moreover, it is important to understand, assess and evaluate the culture at the entity and unit level to see how people perceive it. Such understanding can help us make sense of how things happen around here, and why they do.
Unlike a lot of rhetoric that is divorced from reality, culture is the reality experienced by people. We cannot make people feel we have an ethical culture if the way we act around here is not ethical. In such circumstances the more that ethics is discussed, the more damage is potentially done, as people will become more cynical and less trusting.
In standard branding models, branding value is generally defined and measured by economic performance. Legality and ethics form the foundation of brand equity. Branding has profound impacts on society and not just a company’s customers. An ethical brand enhances the firm’s reputation; this reputation reinforces the brand in turn. Unethical behaviors will significantly destroy or extinguish the brand of an organization, as evidenced by the recent high profile corporate scandals.
The conduct of a company over a long term — its trustworthiness, reputation, dependability, sense of CSR (Corporate Social Responsibility) and the manner in which is treats its staff, are all components of a good branding.
Here are a few quotes that I found that represent the importance of good business ethics:
“You’re never wrong to do the right thing.” Mark Twain
“Doing the right thing doesn’t automatically bring success. But compromising ethics almost always leads to failure.” Vivek Wadhwa; Wall Street Journal
“Ethics is knowing the difference between what you have the right to do and what is right to do.” Potter Stewart
“What is right is not always popular and what is popular is not always right.” Albert Einstein
“We do not act rightly because we have virtue or excellence, but we rather have those because we have acted rightly.” Aristotle
“It is not hard to make decisions when you know what your values are.” Roy E. Disney
“Relativity applies to physics, not ethics.” Albert Einstein
Each person has a responsibility for the organization’s branding through ethics. Traits, which promote ethical behavior, include honesty, integrity, responsibility, trust, respect, teamwork and leadership. An organization with good ethical behavior can bring increased benefits to a company such as attracting new customers, attracting new employees, and employee retention. These all contribute to increased sales and profitability.
I believe it is important for businesses to create environments where employees feel comfortable speaking up.
“When people feel empowered to speak their values and act on their values, that’s one of the ways you create an ethical culture.” “When you create an environment of fear where people are not able to voice their values, or when they do they are shut down, that’s when you get situations like what we’ve seen in the news, over the last several years.,”
For growing businesses or those just starting out, it is important to develop a clear mission early on. “Missions get talked about for larger corporations, but I think even going in and starting up you should ask, ‘What’s the mission? What values do you want to promote in this organization?’”
By establishing a clear mission early, I believe that as the organization grows, it will be easier to come back to that original mission and the values that coincide with it.
“That ultimately will benefit the organizations and the stakeholders that work with you to make the organization successful.” Therefore, we all win in being ethical and transparent!
