adminBradwell Mhonderwa Business Ethics
This is so now as the business world become very competitive and unpredictable. The world over, intangible assets are assuming an increasingly strategic role in promoting business growth and pushing up profits. Business ethics is an intangible asset that must be used by companies to curtail unethical practices in the workplace and improve competitiveness.
An edge on business ethics will help to develop a mindset that values honesty, integrity, and hard work.
Business ethics helps companies to focus on the bigger picture, which is the long-term growth and sustainability of the company.
Company growth anchored on longevity and sustainability enhances shareholder value and builds stakeholder confidence. The rate at which things are changing on the global market place today demands businesses in the country to keep abreast with such change, or they will be left out completely.
The expansion of the global economy is bringing about so much innovation and technological advancement, including a greater involvement of people with diverse cultural backgrounds making ethical considerations a real issue that must form part of any business that seeks a marked presence on the global market place. In a recent study by Arthur Andersen and the London Business School, company secretaries and other senior executives of leading UK companies reported that business ethics initiatives have a positive influence on profit, winning new business, productivity, and business growth.
A Global Investor Opinion Survey in 2006 which interviewed over 200 institutional investors revealed that investors are willing to pay a premium for companies that demonstrate high ethics and governance standards across.
The importance of building a strong ethical culture in a firm is thus clearly integral to the reputation, growth, and financial well being of that firm.
Ethical practices in business help to build a brand that attracts customers, investment and skilled personnel.
The process of managing business ethics starts with a defined corporate reckoning to “change the way we do things here” as part of their new self-regulatory paradigm.
It means business leaders are making concerted effort to unlock the value in the listed company values which they normally hang magnificently on company walls but with little or no effect at all on employee behaviour.
In examining the role of corporate ethics in multinational companies, Bowie and Vaaler (1999) noted that the ethical climate of a business is knowledge-based and embodied in individual employees or in company routines.
This reinforces the insinuation that an ethical culture is intrinsic to a particular company and difficult to duplicate, making it a source of competitive advantage.
Indeed, a sound ethical culture is an intangible asset which assists companies to become businesses of choice for customers, employees, communities, business partners, and investors.
Developing a code of ethics is one means through which a company can embed sound ethical practices in its operations.
The code enables employees to understand what is expected of them in the workplace in terms of their behaviour.
It provides a means through which employees can communicate to customers and other stakeholders the expectations of the business with ease.
An ethics code provides employees with a formal, outside-the-chain-of-command way to communicate upwardly in the company without the threat of being accused of insubordination.
An ethics code covers areas that range from responsibilities to customers and suppliers, questions of health and safety in the workplace, relationships with other staff members, etc.
The ethics code is thus a positive document that reminds employees of those values that influence attitudes, actions, and the choices and decisions they make in their day-to-activities in the workplace.
Business ethics is indeed good business, and when it becomes part of your company’s fabric and DNA, it really does pay off. Some of the strategic benefits of actively managing ethics in an organisation include;
Building employee loyalty, hence reducing hiring and training costs.
Reducing theft, fraud, and other illegal activities in the firm.
Driving sales up, and building customer loyalty.
Creating community goodwill.
Attracting cheap funding and enhancing investor confidence Substantial improvement of society through poverty alleviation.
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