ETHICAL PRINCIPLES FOR BUSINESS

ETHICAL PRINCIPLES FOR BUSINESS

 

Ethical principles are universal standards of right and wrong. These principles prescribe the kind of behavior an ethical company or person should engage in. Business people and business executives should practice the principles in their personal life also.

 

Principles of an ethical business can be explained as follows:

 

Honesty

Be honest in all communications and actions. Ethical business should be trustworthy. It should not deliberately mislead or deceive others by misrepresentations, overstatements, partial truths, selective omissions, or any other means.

 

Integrity

Maintain personal integrity. Integrity refers to a wholeness of character demonstrated by consistency between thoughts, words and actions. Ethical business should be principled, upright and positive. It should not sacrifice principles for convenience and for the sake of practicality.

Promise-Keeping

Keep promises and fulfill commitments. A business is worthy only when it makes every reasonable effort to fulfill the letter and spirit of its promises and commitments. It should never try to interpret agreements in an unreasonably technical or legalistic manner in order to rationalize non-compliance or create justifications for escaping from commitments.

 

Loyalty

Ethical business executives should demonstrate loyalty by safeguarding their ability to make independent professional judgments. Their decisions should always be for the growth and development of business. They should never use or disclose information learned in confidential way, for personal advantage. 

 

Fairness

Strive to be fair and just in all dealings. Business people should never make use of any kind of indecent means to gain or maintain any advantage. They should never take undue advantage of another’s mistakes or difficulties. Ethical executives must be committed to justice, and should give equal justice and treatment to all individuals. They should be open-minded; and willing to admit their mistakes.

 

Caring

Demonstrate compassion and a genuine concern for the well-being of others. Ethical executives should be caring, compassionate, benevolent and kind towards all stakeholders of business. Whenever they take decisions, they should consider the financial and emotional consequences of their actions on all stakeholders. 

Respect Others

Treat everyone with respect. Ethical executives should demonstrate respect for the human dignity, autonomy, privacy, rights, and interests of all those who have a stake in their decisions. They should be courteous and treat all people with equal respect and dignity regardless of sex, race or national origin. 

Law Abiding

Obey the law. Every business should follow laws, rules and regulations relating to its business activities.

 

Commitment to Excellence

Pursue excellence all the time in all things. Ethical executives must be excellent in performing their duties. They should be well-aware of all environmental factors around and be prepared to increase their proficiency in all areas of responsibility. 

Leadership

Exemplify honor and ethics. Ethical executives should be conscious of their own responsibilities. They should make use the opportunities of their position of leadership and should be positive ethical role models by their own conduct and character.

Reputation and Morale

Build and protect the company’s good reputation and morale of its employees. It is the duty of business executives to create, maintain and increase the reputation of the company. They should never engage into any actions which hurt the morale of employees.

Accountability

Be accountable. Business should be accountable to its own people such as management, employees etc. and also to communities, customers, competitors and government. It should expect a social audit every time and should be prepared for it.

BENEFITS AND ADVANTAGES OF BUSINESS ETHICS

BENEFITS AND ADVANTAGES OF BUSINESS ETHICS

 

Ethical behavior is essential for long term success of business, both from micro and macro perspective. If a business organization follows business ethics then it will result in certain benefits: -

 

·      Ethical business can give better service to the society.

·      Such a business creates goodwill in the minds of customers and public.

·      It creates good environment in organization.

·      Ethical environment helps to increase productivity and positivity of employees.

·      Ethical business follows legal formalities and therefore such a business can enjoy freedom from legal and other issues.

·      Management of an ethical business is respected by the whole people both inside and outside the business.

 

Create Value and Better Image

Business functions among different groups of people, like employees, owners, suppliers, creditors, customers, pubic etc. Everybody like to be associated with an establishment which is honest and socially responsible. Employees feel proud of being part of it; suppliers feel honored as they get opportunity to deal with such a reputed organization; customers are satisfied as they get quality product at reasonable price, Government is also happy about such a business unit, as it creates income and provide employment to a lot of people. Image and goodwill of an ethical business increase and it will help the business in its further growth and development.

 

Increase Credibility of Business

Credibility of a business organization is vital on its growth. A business organization which follows ethics in its business, can create a positive attitude among others. People like to buy products of such a business. It creates credibility in the public eye. Such a business can raise capital easily either through public issues or through loans from financial institutions.

 

Satisfied Customers

Ethical organizations ensure value for money spent by their customers. Such organisations always respect their customers and therefore ensure quality products at reasonable price. It means that, such ethical business never over-price their products with an intention to make maximum profit. It creates satisfaction among customers.

 

Satisfied Employees

An ethical organization never exploit their employees, in order to minimize their expenses or to maximize their profit. Such organizations treat their employees as valuable human resource and never compromise their safety and rights. Such business can ensure the best work environment inside the business, and these steps brings in satisfaction among employees.

 

Maximize Profitability

When employees are convinced of ethical values of the organization, they will be happy to be part of it. Such an attitude reduces employee turnover and increases their productivity.   Moreover, employees hold the organisation in high esteem, by upholding quality in all aspects. Higher quality products and best image of the business unit among customers will increase demand and profitability.

 

Better Decision Making

Ethical management always take into consideration, various economic, social and ethical aspects while taking decisions. Decision making will be better if the decisions are in the interest of the public, employees and company’s own long term good.

 

Protection of Society

Ethics can protect society in a better way than even the legal system of the country. Where law fails, ethics always succeed. The government cannot regulate all activities of the business that are harmful to the society. If business units practice ethics instead, it will be the best option to ensure protection of society. Therefore, all business units should follow ethics in all their decisions and practices including competitions.