Business ethics are the set of practices and policies that companies use to guide them through decisions about finances, negotiations and deals, corporate social responsibility, and more. Without a strong set of ethics, a business can run afoul of the law, encounter financial pitfalls and moral dilemmas. But good business ethics ensure customers, employees, and other stakeholders that a company obeys the rules and does the right thing. When a brand loses trust, it can jeopardize sales and harm employee retention. It brings about more scrutiny from government agencies and has vendors question whether it’s worth doing business with you. If other businesses don’t trust you, they can buy products elsewhere or give their good deals to other buyers. Business ethics are critical to good financial planning and positive earnings. If you’re interested in a career in business, you’ll need to understand the principles of business ethics and how you can hone this essential skill.
Ethics play a much larger role in everyday business transactions than you may realize. Ethics aren’t laws that companies have to follow, but they are a set of guiding principles that organizations should follow if they want to build a good reputation. Why is a good reputation for following fair play so important?
Brands are no longer owned only by the companies they represent. Employees, consumers, and stockholders increasingly feel that a brand belongs to them too. That’s why 42 percent of consumers will stop doing business with a company if they disagree with its words or actions on a social issue. And more than 60 percent say their purchasing decisions are driven by a company’s ethical values and authenticity.1
Leadership sets an example for employees. If the CEO of a company cuts corners to secure a contract and it’s a well-known company secret, it can signal to other employees that financial misbehavior is OK. On the other hand, when leaders display a strong moral compass, it encourages others to do the same. If you want your employees to behave well, you need to treat them well and act in a manner that makes them proud to call you the boss.
When a company has a positive reputation, it encourages other businesses to negotiate with it. No one wants to broker a deal with a company that may not make good on its word. If both businesses understand the rules of the ethical game, they can make better, stronger negotiations because they know they will get what they’ve been promised from the deal.
When an organization is unethical, its reputation is tarnished and its consumers may find an alternative source for the products it sells. Companies like Enron, Wells Fargo, and Monsanto all suffered the effects of bad behavior. But big, profitable companies, such as Microsoft and Dell, are recognized and rewarded for their ethical behavior, proving that you can be a good corporate citizen and make a profit at the same time.
How can you strengthen your ethics to make the right business decisions? Start with your faith. Incorporate the tenets of Christian business ethics into your professional life so you can remain motivated to serve others and not be moved by wealth or greed. Develop your own professional moral compass that can help guide you through tough and tricky situations so you can preserve your own reputation as well as the reputation of your company. Decide which behaviors are and are not acceptable to you and don’t be afraid to ask questions or hold others accountable when you observe wrongdoing.
And if you’re ready to take your ethical principles into business, choose a business program that believes as you do. A business program can include classes on ethical principles and management. It delves into the issues that you might encounter in the workplace, differing perspectives and philosophies on how to solve those issues ethically, and the relationship that businesses have with society at large.
If you want to build your business acumen, while honing your business ethics, contact Limestone University today. We offer a variety of business degrees in areas such as finance, marketing, and economics, that can set you on a path to a rewarding career. Each program offers you the chance to study ethics as well as law, management, and much more. Click the button to request more information.