All About Business Ethics

Most companies have a code of conduct for their employees, and many of them also have something similar for the company’s actions. The business’s ethics are what determines what is on those codes of conduct and how they are applied in the daily life of the business and its employees, customers, financial related matters, and research and development tax credits.

What Are Business Ethics, and Why Are They Important?

Business ethics is a term describing the overall set of moral values and principles that guides a business’s behavior. These ethics should drive every decision and action the business takes. This includes how customers and employees are treated. Business ethics are important because they help ensure that the business is following the law. Complying with local, state, and national laws helps companies avoid scandals and attract top-tier customers and employees. It also helps them to retain high-quality employees. Customers have a sense of trust in ethical businesses and are more likely to be loyal to those businesses.

Types of Business Ethics

Personal Responsibility

Everyone associated with a business, from entry-level employees to the CEO, should feel and display a sense of personal responsibility. This includes everything from completing assigned tasks to acknowledging and correcting mistakes.

Corporate Responsibility

The business also has responsibilities toward its employees and customers. These can be legal, contractual, or ethical obligations. The business must take care of its responsibilities to retain trust with all stakeholders, both internal and external.

Loyalty

Loyalty goes both ways. Employees should be loyal toward their employers, coworkers, and customers. Loyalty is displayed by never speaking negatively about the company to customers or outside people and appropriately addressing issues. Businesses must display loyalty to their employees and customers to keep both groups happy.

Respect

Respect is another ethical consideration that must be shared to be successful. Companies should be respectful of vendors, employees, and customers. Employees should be respectful of each other, customers, and the company. Customers should be respectful of the employees they deal with during the course of doing business.

Trustworthiness

Businesses should work to create a sense of trustworthiness with all of their stakeholders. They create this sense by conducting their business reliably, honestly, and with transparency. Customers should feel secure trusting the business with their information and money. Employees should trust that the business will honor the terms of their employment.

Fairness

Fairness ensures that all employees, customers, and other stakeholders are held to the same standards and experience the same treatment. Assistants and executives should be treated with equal respect and held to the same standards of behavior.

Community and Environmental Responsibility

Companies also have a duty of care toward the communities they conduct businesses in and the overall environment. Companies often offer volunteer opportunities to their employees, donate money or inventory, or invest in their communities. Today, more and more companies devote time and resources to greening their operations to make themselves more environmentally friendly.

Examples of Business Ethics

Data Protection

Businesses today compile information about their customers that includes addresses, contact information, financial information, and other personal data. Businesses have an obligation to safeguard this data.

Customer Prioritization

Businesses should respect and honor their customers’ needs. For example, they should reimburse customers whose purchases don’t work as advertised.

Workplace Diversity

Gender, ethnicity, social groups, and age are all parts of diversity. Ethical companies make a concerted effort to hire a wide variety of people because their different experiences and viewpoints make for a more successful workplace.

Corporate Transparency

Clear, easy-to-understand communication with all stakeholders, including customers and employees, helps build trust between these people and the company.

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This page was last updated by Steven Jefferies