A definition for business ethics can be simply explained as principles and values used to govern the behavior of a business and its employees.
However, knowing a definition for business ethics and putting it into practice are two separate matters. When working for previous employers you may have never actually seen a written list of principles used to govern business ethics, but the majority of us know what is acceptable behavior and generally try to do the right thing.
And that’s what business ethics boil down to, doing the right thing.
Unfortunately, in the world of business knowing the right thing when you see is not always straight forward. Some may consider the right thing as making profit, others may consider it to be helping others, regardless of profit.
The problem is that most businesses exist primarily to make a profit, that’s why they were created and that’s why they still exist, for profit. So when we introduce ideal’s that may suit our human judgement, but contradict the goals of a business, we have a dilemma.
As a small business owner or manager, it’s your job to make the business as profitable as possible, right? So when faced with an ethical dilemma, what do you do? Do you make the decision that will make your business the largest profit? Or do you go with the decision that may result in less profit but is deemed more ethical?
Ultimately, it will come down to the kind of person you are, but there is another consideration to be made…
How you can use a definition for business ethics to help your business? Well…
People and companies enjoy doing business with people and companies they know and trust. So ask yourself, are you more likely to trust a company that has a strong set of business ethics, that believes in what is right and acts accordingly, or a company that is known to only be out for themselves and to make a profit regardless of who it may adversely affect?
I know which I would rather do business with!
Business ethics also play an important part in image and branding. Many businesses rely on their image for success, especially within certain industries such as childcare and healthcare. The importance of your businesses trust and credibility cannot be underestimated.
There is also evidence to suggest that employees working for companies considered to be more ethical are more productive and tend to stay with that company longer.
Your businesses ethical stance will not only affect your employee’s choices, but also the company as a whole…
The individuals within an organization are going to face ethical choices, and to some extent may rely on there own principals when making these decision, however there should be a clear ethos when it comes business ethics to remove any uncertainty.
Set out in no uncertain terms how you expect your employees to behave in these situations.
Company as a whole
When an employee has an ethical choice to make, it is likely to affect a small no of people directly involved, the ethical choices a business has to make can affect large no’s of people and organizations, and can come under scrutiny from the public and media.
For example, choosing to trade with a supplier that uses child labor is likely to result in bad press for your company.
Having a written list of principals that determine your businesses behavior will help your company and employees act coherently as one. But there is no point in having these principals and never utilizing them, have them somewhere everyone can see them every day, a good way to get these principals in the minds of all your staff and into practice is to have them put onto posters and framed along a hallway or on stationary etc.
Lead by example, managers and owners in a business set the tone when it comes to business ethics, if you think that it is acceptable to act unethically, it is much more likely your employees will follow suit.
When it comes to business ethics, there are pros and cons, and the choices you make will be greatly affected by the kind of person you are. Of course, it is possible to strike a balance between ethical responsibility and profitability, and knowing a definition for business ethics is the start.