Why is business ethics important?
Ethics shape the decisions and actions of each individual in a small business, from the owner on down. Observing high ethical standards is sound business strategy -- resulting in customer loyalty, higher employee retention and a positive image in the industry and within the community.
His long-term plan or vision for the company includes a statement of the good he hopes to accomplish through the company. A publisher that specializes in pet care books, for example, could have a mission of using the latest research and information about pet nutrition and health care to enable pets to live longer, healthier lives.
Code of Conduct A business owner creates a code of conduct to provide specific direction about how his employees should act in situations they encounter on the job. Ethical choices can be difficult because strictly adhering to the highest ethical standards may mean a manager not achieving goals the business owner has set for him.
A production manager may be tempted to use lower quality raw materials to keep production costs in line, for example. The code of conduct becomes the set of policies that the owner expects everyone in the company to follow. Customer Relations Strategy If a customer believes she was lied to, she may not do business with the company again and could go so far as to post a complaint about the company on Internet forums.
During the planning process, the business owner develops strategies to increase customer satisfaction, which leads to repeat business and customer loyalty. Ethical considerations include managers treating employees with respect and co-workers respecting each other. As part of the annual planning process, the business owner assesses whether staff levels are adequate to complete all the tasks he will assign.
Some companies even include goals in their business plans for recycling, reducing waste, using less energy and contributing to local charities. The ethical consideration involves recognizing that the company and its employees are members of the community and have a responsibility to be positive contributors to the well-being of the community and to protect the environment.Nov 16, · Business has become one of the primary players in structuring the global economy and, by extension, global governance.
This places new demands on business leaders. Ethics issues can arise in a wide variety of business situations.
For example, conflicts of interest arise when an employee has personal interests, relationships or commitments that may override an unbiased and impartial exercise of independent business judgment or interfere with the fulfillment of the employee’s duties to the company.
While ethics should be part of the company's mission statement, long-term strategic plan, public pronouncements, and codes of conduct, unless it is also a "cornerstone of the organizational culture," it will not be effectively integrated into the business strategy, he .
Ethical Principles in Planning (As Adopted by the APA Board, May ) This statement is a guide to ethical conduct for all who participate in the process of planning as . Ethics are a consideration from the very early stages of a company’s development, when the business owner crafts a mission statement in his business plan that describes the kind of company he.
The role of ethics and social responsibility can be further enhanced during the strategic planning by instituting a code of ethics in the organization. It helps to establish a business behavior that recognizes sincerity, candor, honesty and transparency to promote the organization’s credibility and influence.