Ethics consulting might sound like just another buzzword, but it really isn’t. Business ethics are more important than ever, and while becoming a better business in the most important ways can seem like an uphill struggle, and even a journey you aren’t keen to take, in the 21st century it’s a must for sustained business growth and success.
The good news is that, as a leading ethics consulting firm. Pearl lemon Consulting can help. A lot.
What Exactly Is Business Ethics?
Business ethics is the study of proper business policies and procedures surrounding potentially contentious topics such as corporate governance, insider trading, bribery, discrimination, corporate social responsibility, fiduciary responsibilities, and many more.
The law frequently guides business ethics, but business ethics can also provide a fundamental framework that businesses can follow to earn public acceptability and trust.
Understanding Business Ethics
Business ethics ensures that there is a baseline level of trust between consumers and other market actors and enterprises. A portfolio manager, for example, should treat the portfolios of family members and small individual investors with the same care that they do the portfolios of wealthy clients. These kinds of practices ensure that the public is treated fairly and that the world at large shares that view.
Business ethics emerged in the 1960s as firms became more cognizant of a growing consumer-based culture concerned with the environment, social issues, and corporate responsibility. The decade was defined by a growing emphasis on “social issues.”
Success Result
A full circle, after the ‘corporate greed’ of the Eighties has become a more distant memory, has seen this focus become prominent again. An increasing number of people, especially younger ones, just won’t do business with those who don’t share their values.
Business ethics is more than just a moral code of what is good and bad; it aims to reconcile what businesses must do legally with keeping a competitive advantage over other enterprises. It’s a delicate balance to find and maintain, which is why so many businesses seek out – and benefit from – the help of an ethics consulting firm like ours.
The Basic Business Ethics Principles Defined
It is critical to comprehend the fundamental ideas that motivate that desired ethical behavior, as well as how a lack of these moral standards contributes to the failure of many otherwise brilliant, talented people and the businesses and enterprises they represent.
In general, there are 12 business ethics principles:
Leadership: The deliberate endeavor to accept, integrate, and mimic the other 11 principles in all aspects of professional and personal life.
Accountability: This entails holding yourself and others accountable for their actions. It’s also a conscious dedication to following ethical procedures and ensuring that others do the same.
Integrity: This, somewhat obviously, encompasses other principles such as honesty, trustworthiness, and dependability. Someone with integrity does the proper thing on a consistent basis and seeks to hold themselves to a better standard.
Respect for others: Respecting others is a vital component in fostering ethical behavior and environments in the workplace. Everyone is entitled to respect, privacy, equality, opportunities, compassion, and empathy.
Honesty: Being truthful in all situations is essential for creating an ethical environment. Partial facts, omissions, and under or overstating do not aid a company’s performance or anyone’s trust in them. Bad news should be presented and received in the same way that good news is in order to find solutions.
Respect for the rule of law: Ethical leadership should include the enforcement of all the laws that are designed to govern them. Leaders should err on the side of legitimacy rather than exploiting a gap if there is a legal grey area.
Responsibility: Ideally leaders and managers should promote ownership inside an organization by allowing employees to be accountable for their job as well as being accountable for theirs.
Transparency: Companies should ensure that information about their financial statements, price changes, hiring and firing practices, wages and salaries, and promotions are available to those interested in the business’s success without divulging trade secrets.
Compassion: Workers, the community surrounding a business, business partners, and customers should all be treated with concern for their well-being.
Fairness: Everyone should have equal access to opportunities and be treated equally. If a habit or conduct makes someone uncomfortable or prioritizes personal or corporate gain over equality, common courtesy, and respect, it is probably not fair.
Loyalty: Leaders should be trustworthy and committed to their staff and the firm. Motivating employees and management to be loyal ensures that they are devoted to great practices.
Environmental concern: In a world where resources are few, ecosystems have been harmed by past actions, and the climate is changing, it is critical to be aware of and worried about a company’s environmental impact. All employees should be encouraged to find and disclose solutions to practices that can exacerbate already-existing damage.
What Is the Importance of Business Ethics in the 21st Century ?
All of this might sound very lofty and even rather dry and boring. But there are lots of good reasons why focusing on better business ethics is critical for business success on both a personal and company wide level.
Most significantly, specified ethics programs, like those we brainstorm and build with our ethics consulting clients, create a code of conduct that guides employee behavior, from CEOs to middle management to the youngest and oldest staff. When all employees make ethical decisions, the organization develops a reputation for integrity. Its reputation grows, and it begins to reap the rewards of being a moral establishment:
- Brand recognition and expansion
- Increased bargaining power
- Increased trust in products and services
- Better customer retention and sales expansion
- Attract and retain more, and better talent
- Attract investors and brand evangelists
All of these elements have an impact on a company’s revenue. Those who fail to develop and enforce ethical standards risk going into history alongside Enron, Arthur Andersen, Wells Fargo, Lehman Brothers, Bernie Maddoff, and many others. And do you really want that?
Business Ethics Types We Help You Understand
There are many different types of business ethics theories, but what distinguishes a company is its corporate social responsibility practices, transparency and trustworthiness, fairness, and technical practices.
Corporate Social Responsibility in Business
CSR is the notion of serving the requirements of stakeholders while accounting for the impact that meeting those needs has on employees, the environment, society, and the community in which the business works.
Solid finances and profits are vital to business survival, but they should come second to the wellbeing of society, customers, and employees—because studies have shown that corporate governance and ethical standards improve financial success.
Businesses must hold themselves accountable for their environmental, charitable, ethical, and economic implications.
Transparency and Dependability
It is critical for businesses to ensure that their financial performance is reported in a transparent manner. This applies not only to mandatory financial reports, but to all reports in general. Many firms, for example, issue yearly reports to their shareholders.
Most of these reports detail not just the reports given to regulators, but also how and why choices were made, whether or not goals were attained, and factors that influenced performance. CEOs summarize the company’s annual performance and provide outlooks.
Press releases are another way for businesses to be transparent. Events that are significant to investors and customers should be publicized, whether they are good or bad.
Ethics and Technological Practices
The increasing use of technology in all forms in business operations necessitates the necessity for a company to ensure that the technology and information it collects is used ethically.
Furthermore, it should ensure that the technology is as safe as possible, especially since many organizations store client information and collect data that people with nefarious motives can exploit.
Fairness
A workplace should be welcoming, diverse, and equitable to all employees, regardless of ethnicity, religion, beliefs, age, or gender identity. A fair work environment allows everyone to grow, get promoted, and achieve success in their own unique way.
How to Put Good Business Ethics into Practice
It takes time and work to foster a climate of ethical behavior and decision-making, and it always begins at the top. To enforce ethical behavior, most businesses must develop a code of conduct/ethics, guiding principles, reporting mechanisms, and training programs. Given that they are also trying to run a business, this often means that making a concerted effort to do this goes by the wayside.
Then there is the temptation to skirt some business ethics altogether, especially if their examples of other apparently successful businesses ‘getting away with it’.
However, as leading ethics consulting experts, we know, and we show our clients, that eventually a lack of business ethics catches up with even the largest and most powerful companies. A quick glance at the news every day demonstrates that, and the incidences of businesses being ‘called out’ for their lack of ethics are increasing all the time, as are the negative consequences.
Becoming a better business can be time consuming, confusing and yes, even painful. Working with a business ethics company that understands this, and can make the process both less painful and more effective helps a great deal. And Pearl Lemon Consulting is that company. But you don’t have to take our word for it. Contact us today and we’ll be happy to explain just how our ethics consulting expertise will benefit you.
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