Importance of business ethics
Businesses are set up to make a profit. We all understand that. But to what extent that profit would be made?
Recently, the volatility in the prices of edible oil and poultry products and the uneven price hike of food items before Ramadan and Eid all indicate towards the inevitability of having an ethical mindset among entrepreneurs.
Businesses are gradually gaining huge power and have influence all over the society. Whether the influence is positive or negative, businesses are bound to maintain moral values and create wealth as part of their efforts to achieve success.
Ethics refers to a philosophical segment that deals with human values in relation to their behaviour regarding what is good or bad and what is right or wrong. Entrepreneurial ethics is focused on how businesses ought to behave and apply ethical values in a business environment.
In business, ethics makes sure that profits are made only through the right channels maintaining good values. The fundamentals of entrepreneurial ethics are important while communicating with people. Entrepreneurs should also take up commendable CSR (corporate social responsibility) initiatives and earn respect.
Employees are expected to stay loyal to organisations. So, if management leads a business in an ethical manner, employees follow in their footsteps. Employees take better decisions when business ethics are in place. This raises productivity and gives a boost to employee morale.
Ethical practices benefit businesses in the long term. Poor ethical standards have directly played roles in the demise of many companies.
Entrepreneurial ethics guarantees a good reputation for companies and it always feels good to be a part of a company with a great reputation. When we have a reputation for consistently being ethical in how we source and build products and treat employees, customers and the community, more people will want to do business with us. Both front-line dealers and backend suppliers will also feel privileged to be part of the great journey.
The learning of social media ethics is also essential. For example, hiding or disclosing negative feedback indicates our ethical standards. Displaying photos of products without using extraordinary filters or colours is also essential. Stories that are published must meet ethical criteria.
Businesses that exercise good ethical standards face lower risks of being fined and other legal troubles. Although regulations are complicated, difficulties can be avoided just by doing things ethically. If our decisions are morally appropriate, we can save companies from various stresses and defend ourselves against litigations and penalties.
The ethical standard of a company is directly related to profitability in both the short and long terms. Entrepreneurial ethics and profit go hand in hand and will certainly make relations better and stronger.
The writer is a senior banker