Business Ethics For Better Behavior – Ethical behavior means acting in ways that are consistent with what society, individuals and businesses generally accept as good values. Good values include characteristics such as honesty, dignity, diversity, justice and respect for individual rights, to name a few. Integrity drives ethical behavior, of course. This is why the overall culture of the company is the most important influence on ethical behavior at every level of a corporation.
The culture of a corporation starts at the top with the board of directors, CEO or executive director, and other key managers. Everyone else within the corporation gets a sense of the corporation’s values through what they say and what the corporation has to say through its media, advertising, employee communications and other messages.
Business Ethics For Better Behavior
The values within a corporate culture have a major influence on the relationships between the corporation and its vendors, customers and employees. Good ethics means that people with the corporation are honest, fair and respectful towards everyone they deal with inside and outside the company. When ethical behavior is genuine, it triggers ethical behavior in its employees just as parents and grandparents inspire moral values in their children and grandchildren. Ethical behavior is good for business, just as it is good for families.
Ways To Manage Ethical Risks
Until recently, regulatory bodies were primarily interested in regulating laws and policies for the financial industry. Some of the recent cover-ups and scandals of major corporations have caused regulatory agencies to evaluate corporate behavior in general, especially in terms of ethical behavior.
For example, Wells Fargo was caught in a scandal where they encouraged employees to set up fake checking and savings accounts so that their managers could meet quotas, and thus, get incentives. A federal investigation revealed that managers and lower-level employees were under intense pressure to meet standing quotas. Unethical behavior from the top management trickled down to the employees, who unwittingly became part of the fraudulent scheme for fear of losing their jobs.
In 2016, the Securities and Exchange Commission (SEC) issued the new Corporate Governance Code for publicly listed corporations. It is only the third such version of the code since 2002. Scandals such as the Wells Fargo debacle motivated the SEC to include language in this version that emphasizes the board’s duty of care as it relates to ethical behavior. This version has the most robust language about the moral role of board directors in relation to corporate affairs.
The new code encourages board directors to be aware that their decisions affect shareholders, stakeholders and our entire society. The SEC encourages board directors to maintain strict adherence to the definition of corporate governance, which they define in part as “a system of direction, feedback, and control using regulations, performance standards, and ethical guidelines to hold the board and senior management accountable. ensuring ethical behavior—the reconciliation of long-term customer satisfaction with shareholder value—for the benefit of all stakeholders and society.”
A Framework For Ethical Decision Making
The code goes on to talk about ethics under Principle 16, which says, “The company must be socially responsible in all its dealings with the communities where it operates. It must ensure that its interactions serve the environment and its stakeholders in a positive and progressive manner that fully supports its comprehensive and balanced development.”
This is a very different concept from how senior managers viewed social responsibility in the past. In general, senior managers considered their philanthropic efforts as the main events where they needed to be socially responsible. The SEC would like to see the same focus on ethical behavior in the daily work of the corporate environment.
Corporations can perform many of the same activities as people. Corporate entities can form contracts, own property, hire staff and make purchases. Because a corporation is not human, there is no way to sanction the corporation or hold it accountable for illegal activity. A corporation does not feel guilt or remorse for harming its employees or customers.
Governments and regulatory bodies cannot punish a corporation, but they can hold the people who run the corporation accountable. The responsibility for ethical behavior anywhere within the corporation falls clearly on the board of directors because they are responsible for oversight and decision making.
Business Ethics As Company Principles And Moral Honesty Set Outline Diagram Stock Vector
Governments establish corporate laws and regulations to deter and control misconduct among corporate directors and executives. Corporate lawyers sometimes advise board directors to move in the direction of creating a morally sound corporate culture to ensure they adhere to the letter of the law.
Unfortunately, there is no law for every circumstance. What makes it even more confusing is that laws are subject to interpretation by people, lawyers, judges and courts of law.
The best board directors will face a decision where a legal decision is not always an ethical one. Corporate lawyers can be a source of guidance in such matters, but board directors often have to make judgment calls when ethics are a factor, and the law is unclear.
Of ethics runs it. It is nice to develop a code of ethics on paper that the corporation can send to vendors, employees and customers, but the real test is whether board directors and managers put the code into practice. action.
Building An Ethical Career
Board directors must first identify the legitimate needs of their stakeholders and then ensure that all their policies and systems align with those needs. The priorities that board directors should have at the top of their lists are the tone of their communications, role modeling and oversight to ensure that the corporation’s values are being supported by employees and customers.
Bad ethics can cause bad behavior within corporations. When bad ethics trickles down to the lower levels of the entity, it causes good people to make poor and selfish decisions. The devastation can be wide and swift, and can damage the reputation of companies large and small in the blink of an eye. There is much at stake.
The best thing board directors can do for themselves and their companies is to have an equal commitment to developing a corporate culture with strong ethical values, as they do to corporate planning and strategy. -future of the company. Ethics are the principles that guide us to make the best choices, resenting the greater good. It is the inner compass that drives us to be honest, keep our promises, and lend a hand to someone in need. Giving us a sense of what is good and what is not, ethics helps us evaluate our situations to make smarter decisions. As a result, the ethical framework influences our lives every day, allowing us to live happy and successful lives and build healthy relationships.
Business ethics are the backbone of a growing and healthy business. It is essential for organizations operating in the ethical field to avoid legal problems. In today’s era, where information spreads at unimaginable speeds and businesses are expected to operate under the highest standards, ethics have never been more critical in the business arena. In addition, ethics are vital to building a good reputation and to the survival of the business.
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The general morality and ethics of a business have one of the most significant impacts on customer trust. Implementing good ethics in your business will ensure that your customers trust you. When customers are assured that the service and products they are using come from a company that executes high ethical standards, the word quickly spreads.
If customers are happy with the way you practice high social responsibility in all your dealings, they will gain trust in you. This means there is a high chance that they will come back and recommend you to their friends and family too, bringing you more customers! As a result, the sales and income of your business will increase.
Consumerism has evolved in such a way that it emphasizes the ethics and morals of a business – often more than the goods and services it provides. Without business ethics, you cannot improve the customer’s confidence in the quality, quantity and price of the products. In addition, customers feel safe with business people who follow ethical rules – who never deceive them.
Implementing ethics in your business will help you create a workplace environment where employees can be trusted to do their jobs and protect and respect business assets. If workers see unfairness in business, they will be less dedicated, causing the industry to suffer. However, employees who feel fairness and openness are self-motivated and do not need to be micro-managed.
Promoting More Ethical Behavior At Work
Ethics also involves boosting employee morale by rewarding them. The workers realize that they advance not on my favoritism but on merit. This, in turn, inspires employees to work harder, which leads to more profit.
Likewise, if you treat your workers ethically, they will want to stay with you longer. Maintaining a positive atmosphere is crucial to keeping employees happy and engaged. Employers will not think of leaving a company where their rights and opinions are valued. As a result, you will have talented, committed, ethical employees who will stick with you. Instead of being busy in hiring and training new employees, you will invest time and money in more important things.
Good business ethics also attract more employees. People will be more than eager to work for a reputable company.
Running a business
Business Ethics Definition: 4 Main Types Of Business Ethics
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