adminethics and positive financial performance.
The investigation, pertinent as it is, has significantly contributed to the growth of business ethics as a practising subject, and tremendous progress has been made with regard to this.
In fact, corporate ethics has now risen to become the new frontier for competitive advantage and a global business intervention of choice.
Business leaders are right when they seek to understand the quantitative worth of business ethics in companies because they are the rightful custodians of the health of their companies.
Business leaders want to understand that through ethics, productivity and profitability increases, and that should be able to prove to company owners that ethical cultures impact the bottom line and increase shareholder value.
Corporate leaders bear responsibility for the impact of any organisational intervention whether positive or negative.
To shore up the business case of ethics, there is now increasing and compelling empirical evidence both qualitative and quantitative that shows that an ethical culture benefits the bottom line.
The first empirical research on the impact of ethics on organisational performance was conducted by Baumhart in 1961.
A study carried out by the Institute of Business Ethics in the UK in 2003 and 2007 established a positive relationship between business ethics and financial performance.
Studies and ethics surveys that are carried out from time to time on Wall Street have always validated a direct relationship between ethical business practices with the strength of business success factors such as stock prices, customer purchasing patterns, and employee retention. Perception surveys across economic regions reveal that ethical companies are more successful than those that are not.
In response to this empirical evidence, businesses the world over are witnessing the rapid growth of corporate ethics, and Zimbabwe is no exception.
The country today is seized by the need to grow an ethical business culture in its economy, and it is becoming apparent by the day that effective inculcation of ethical business practices is achievable through implementation of comprehensive corporate ethics processes in business operations.
Globally, proof of the existence of corporate ethics structures in a business is now used to measure the competitiveness of a firm in the market place.
With effective corporate ethics processes, companies are sure to set themselves apart from their com-petitors.
Through ethics companies can form unique brands that are difficult to copy. Ethics helps to influence company decisions, every pattern of thought, choice, and action of all employees, thus helping to reshape the organisational culture of the business.
Ethics creates a unique ethical character which quietly guides what employees think, say, and do.
Ethics is a tool through which ethics risks and other company acts of misconduct are curtailed. Obvious generic benefits of effective ethics infrastructure include reduced costs, attracting skilled staff, gaining competitive advantage, attracting foreign investment, and securing community goodwill.
Other benefits are, increasing employee job satisfaction, and increasing company productivity and profitability, among others.
While a harsh economic environment tends to justify unorthodox means of doing business in some people, the futility of doing so cannot be overemphasized as the collapse of corporate giants both locally and internationally in the last decade testifies.
Emerging responsible business practices demand that business leaders must embed effective ethics structures in business operations because without these processes companies are doomed to failure.
Ethical cultures increase financial performance, and an investment in ethical business practices brings forth return on investment.
Bradwell Mhonderwa is an Ethics Coach and Trainer with the Business Ethics Centre. Send feedback to [email protected], [email protected], or call 0772 913 875
Online Reporter