Business ethics is the application of ethical values to business behavior. Business ethics is relevant both to the conduct of individuals and to the conduct of the organization. It applies to any, and all aspects of business conduct, from boardroom strategies and how companies treat their employees to all different facets of an organization.
Building an Ethical Culture
Building an ethical culture starts with a clear set of values and an understanding of the purpose of the organization. For an ethics policy and program to be effective, every aspect of corporate culture needs to be harnessed to guide and support the organization and its employees to live up to the ethical values it espouses.
Purpose, Ethical Values, Culture and Behaviors
Purpose and values are the foundation of an ethics program. Some of the most fundamental questions like: What is the purpose of our business? Where are we trying to get? How will we get there? can only be answered in conjunction with each other. Ethical values guide the way that business is done, and what is considered acceptable to desirable behavior, above and beyond compliance with laws and regulations.
What is the difference between ethical values and business values?
Business values are what the company will deliver, ethical values are how the business values will be achieved. While honesty, fairness, integrity, respect can be termed as ethical values, business values include innovation, values for money, customer focus etc.
Crucial Role of Ethics in Entrepreneurship:
Ethics plays a crucial role in the long-term success and sustainability of a business. By adhering to ethical principles, entrepreneurs can foster trust, nurture employee morale and provide a competitive advantage in the market. Ethics also has a positive impact on stakeholders, customers and the broader community. The following are the reasons why ethics is essential for entrepreneurship:
1. Trust and reputation: When entrepreneurs act ethically, it builds trust and helps build a solid reputation which is essential for nurturing long lasting relationships with stakeholders.
2. Employee morale and retention: Ethical leadership sets the stage for a positive work atmosphere, leading to happier employees who prefer to stay with the company. It’s proven that businesses with high employee engagement experience 59% lower turnover rate.
3. Competitive Advantage: Embodying ethical values can help a company stand out from the competition and attract a loyal customer base. 62% of consumers prefer to support businesses that align with their personal values and beliefs.
4. Long term success: Entrepreneurs who look beyond immediate gains and consider the broader social and economic consequences of their actions are more likely to create sustainable business models and achieving enduring success.
Implementing Ethical Guidelines: The Path to sustainable Entrepreneurship
Incorporating ethical guidelines into a business framework is an important step for entrepreneurs who aim to create sustainable and responsible ventures. This practice ensures businesses operate in harmony with societal values and refrain from creating technologies that might threaten the future of our next generation.
One approach to implementing ethical guidelines is by adopting the principles of the TBL (Triple Bottom Line) framework. The framework emphasizes three dimensions of performance: social, environmental and financial, often referred to as people, planet and profit. By balancing these three aspects, businesses can create long-lasting value for both their investors and the environment.
How does communication and employee engagement help drive ethical value?
Communication strategy for the ethics program aims to raise awareness of the organization’s values, its code of ethics, what ethical practices look like and why they are important for the success of the business. All communication channels should be leveraged to raise awareness and promote values and code. One of the crucial factors in this whole strategy is that employees must be kept actively engaged via various blogs on the intranet, discussion forums etc and they must realize the consequences of breaching the code. Employees should also be aware of all means of raising concerns, even if they are pre-emptive as well as asking questions and seek guidance as and when necessary.
