Nowadays it is essential that an organization has values and knows how to communicate them to its audience, in order to connect with people on a deeper level. A company that is congruent with its organizational culture will be more respected and trusted.
Business ethics: why it is important and examples
Nowadays it is essential that an organization has values and knows how to communicate them to its audience, in order to connect with people on a deeper level. A company that is congruent with its organizational culture will be more respected and trusted.
Below we will see what business ethics is, what its benefits are, what elements make it up and some clear examples of successful brands.
What is business ethics?
Business ethics is the set of moral norms and principles that govern the decisions and actions carried out by a company, in search of the common well-being in the society in which it operates. From this point of view, a brand or business is an entity that influences its social context.
Business ethics has directly to do with the professionalism of business leaders and their mediation in conflicts of interest, non-discrimination against employees, clients and investors; equitable staffing practices; transparency of all information about the company and its products, among others.
Likewise, companies must take into account the effects that their industrial processes cause to the ecosystem, when certain items are produced massively and irresponsibly. The use of natural resources is something that directly affects the living conditions of the entire planet.
Therefore, your company acquires the commitment to have business management that includes values such as honesty, respect, transparency, responsibility, justice, equity, care for the environment and natural resources, among others. Which are supported by corporate policies that allow them to be implemented and provide a benefit to society.
Importance of business ethics
Beyond the commercial aspects, your company is made up of people and is aimed at people who have the right to be treated with dignity. Consequently, the principle of business ethics is the general well-being of a society, at all levels. Therefore, if your company works with this in mind, the result will be a kinder, fuller, physically and mentally healthy society.
Although many may not believe it, business ethics are not at odds with profit generation, as we will confirm shortly.
Advantages of business ethics
A brand with optimal business competitiveness is one that offers a high quality product at a fair price; is inclusive of its employees and offers them adequate salaries; It motivates its shareholders and encourages its suppliers with its good practices, in addition to being concerned and taking care of the environment.
All this is achieved based on business ethics, because these practices improve the relationship with customers, who recognize it as an honest brand to follow. With this positive brand perception it will also generate confidence in current or new shareholders.
In short, business ethics facilitates the economic development of all parties with whom it interacts: consumers, suppliers, distributors, employees, investors and others. It should be noted that actions that go against it (such as misleading advertising, fraud, abuse of power, discrimination and others) directly threaten the stability and future of the company.
7 principles of business ethics
- Social responsibility
It refers to the awareness that a company has regarding the decisions it makes and that can directly affect society, whether in the short or long term. So you can also contribute to initiatives that benefit the community. An example is the donations of big brands to social causes.
- Legal compliance
A company has to comply with a series of regulations and restrictions that are imposed by the government where it resides. So each of its processes, from production to sale to the final consumer, is planned and executed so that it does not violate any law. It also includes the payment of taxes.
- Environmental ethics
It involves all the actions carried out by a company that have a positive or negative impact on the ecosystem. That is, consumption and use of renewable energies, carbon dioxide emissions, recycling, noise generation, waste management, biodegradable packaging and wrapping, among others.
- Creating shared value
This occurs when a company designs a product or service that responds to a problem in society, which is why it has a more human than economic objective. It’s a great way for brands to step out of the box and really demonstrate their ethics.
- Process transparency
It involves showing all the ingredients a product contains, its country of origin and other details; so that they are in the public domain. In this way, a company becomes accessible and transparent for all people and, therefore, more trustworthy.
- Family values
When a company understands that the most important thing for a person is their family; encourages schedules and practices so that its workers’ quality time with their loved ones is respected. An example of this is companies that provide pregnancy, maternity and paternity leave.
- Reputation and leadership
It falls on the people who are in charge of a company and contribute to good organizational development ; since the decisions and objectives agree with the values of the brand and, in turn, with those of society. This causes the company to be recognized and appreciated by consumers.