Good ethics is good business

The world over, intangible assets are assuming an increasingly strategic and significant role in promoting business growth and pushing up profits.
They have become the new frontier for competitive advantage.

Zimbabwe’s economy is littered with cases of corporate malpractices and unethical business conduct which has left many companies on the brink of collapse leaving people whose lives are dependent on these organisations vulnerable.

Business ethics is an intangible asset that must be used by companies to curtail unethical business practices.
An edge on business ethics will help to develop a mindset that values honesty, integrity and hard work.

Business ethics help 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 the confidence of all stakeholders.

The rate at which things are changing on the global market place today demands businesses to keep abreast with the change, or they will be left out completely.
The expansion of the global economy is bringing about greater involvement of people with different cultures and socio-economic systems in the business world and across borders, and with this, ethical considerations have become even more relevant and important.

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 had a positive influence on profit, winning new business, productivity and business growth.

And 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 globe.

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 and skilled personnel, making the business ethics drive a source of competitive advantage.
The process of managing business ethics starts with a resolute corporate reckoning to unlock the value in listed company values which are traditionally hanged magnificently on company walls but with little or no effect at all on staff behaviour.

As a result company values are an intrinsic matter for the company, the process of unlocking that value must be preceded by a strong desire for self-regulation within the company.

In examining the role of corporate ethics in multinational companies, Bowie and Vaaler (1999) noted that the ethical climate of a corporation is knowledge-based and embodied in individual employees or in company routines.

This reinforces the fact that the ethical climate is intrinsic to a particular company and difficult to duplicate, making it a source of competitive advantage for that company.

A sound ethical culture is an intangible asset, which assists corporates to become companies of choice for customers, employees, communities, business partners, and investors.

Developing an ethics code is one means through which a company can embed a sound ethical culture in its operations.
The code enables employees to understand what is expected of them in the workplace in terms of behaviour.

It provides a device through which employees can communicate to customers and suppliers the expectations of the firm 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 other stakeholders, 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 enduring values that influence attitudes, actions, and the choices and decisions they make every day in their work stations which subsequently create that corporate uniqueness to drive competitiveness.

Ethical business is indeed good business, and when it becomes part of your company’s fabric and DNA, it really does pay off in the end.
Some of the strategic benefits of actively managing ethics in an organisation are;