Profit Maximization:
The importance of ethics in business can be understood by the fact that ethical businesses tend to make much more profits than the others. The reason for this is that customers of businesses which follow ethics are loyal and satisfied with the services and product offerings of such businesses. Let us take an example. Suppose, there is an organization named XYZ which manufactures cosmetics.
XYZ greatly believes in the importance of business ethics. When XYZ advertises its cosmetics in the market, being an ethical organization, it will be very truthful and honest in its communication with the probable customers. It will tell correctly about the kind of ingredients it has used while manufacturing the cosmetics. It will not lie or exaggerate about the benefits or uses of its products either.
So the customers, who buy its cosmetics, know precisely what they are buying and how useful that product is going to be for them. This way, the product will meet their expectations and thus, satisfy the customers. When customers are satisfied, they will become loyal to the company and come back again for re-purchasing. This will surely increase the profits of the organization. Thus, the importance of business ethics is that it creates loyalty in customers and maximizes the profits.
Efficient Utilization of Business Resources:
In an organization, people working at the junior levels often emulate the ones working at the top. The same applies with ethics too. If the management or seniors of an organization follow ethical business practices, i.e., they do not bribe to get their way or they do not cheat the customers, investors, suppliers, etc., the employees will follow suit. The employees too will refrain from using the office property or resources for personal benefits. This will result in better and efficient utilization of the business resources.
Creates Goodwill in the Market:
an organization, which is well known for its ethical practices, creates a goodwill for itself in the market. Investors or venture capitalists are more willing to put their money in the businesses which they can trust.
Shareholders too, remain satisfied with the practices of ethical businesses. Thus, the importance of business ethics in creating goodwill and building long term relationships cannot be denied. Also, an ethical business puts greater value on its employees and thus, employees remain loyal to such an organization too.
Examples: of unethical behaviour abound in business stories around the world. And individuals witness some form of unethical behaviour in their workplace every day. Unethical behaviour where people deliberately intend to harm themselves or others, develops from and is reinforced by, destructive states of mind, including fear, greed, anger and jealously. In contract, ethical behaviour enhances the well-being of everyone because it is developed from and reinforced by strong motives and emotions such as love, joy, generosity and compassion.
Believe it is much more than “important,” it is a “critical, essential and non-negotiable” characteristic of an effective leader. Strong business ethics is a pillar of my strategic planning and strategic thinking business coaching efforts each and every day. Clients are encouraged to develop a set of core values and guiding principles and publish them for their clients and stakeholders to know that this is the way they do business. And furthermore, the clients are continually reminded to make sure the core values are demonstrated in all that they do.
The importance of ethics in business can be understood by the fact that ethical businesses tend to make much more profits than the others. The reason for this is that customers of businesses which follow ethics are loyal and satisfied with the services and product offerings of such businesses. Let us take an example. Suppose, there is an organization named XYZ which manufactures cosmetics.
XYZ greatly believes in the importance of business ethics. When XYZ advertises its cosmetics in the market, being an ethical organization, it will be very truthful and honest in its communication with the probable customers. It will tell correctly about the kind of ingredients it has used while manufacturing the cosmetics. It will not lie or exaggerate about the benefits or uses of its products either.
So the customers, who buy its cosmetics, know precisely what they are buying and how useful that product is going to be for them. This way, the product will meet their expectations and thus, satisfy the customers. When customers are satisfied, they will become loyal to the company and come back again for re-purchasing. This will surely increase the profits of the organization. Thus, the importance of business ethics is that it creates loyalty in customers and maximizes the profits.
Efficient Utilization of Business Resources:
In an organization, people working at the junior levels often emulate the ones working at the top. The same applies with ethics too. If the management or seniors of an organization follow ethical business practices, i.e., they do not bribe to get their way or they do not cheat the customers, investors, suppliers, etc., the employees will follow suit. The employees too will refrain from using the office property or resources for personal benefits. This will result in better and efficient utilization of the business resources.
Creates Goodwill in the Market:
an organization, which is well known for its ethical practices, creates a goodwill for itself in the market. Investors or venture capitalists are more willing to put their money in the businesses which they can trust.
Shareholders too, remain satisfied with the practices of ethical businesses. Thus, the importance of business ethics in creating goodwill and building long term relationships cannot be denied. Also, an ethical business puts greater value on its employees and thus, employees remain loyal to such an organization too.
Examples: of unethical behaviour abound in business stories around the world. And individuals witness some form of unethical behaviour in their workplace every day. Unethical behaviour where people deliberately intend to harm themselves or others, develops from and is reinforced by, destructive states of mind, including fear, greed, anger and jealously. In contract, ethical behaviour enhances the well-being of everyone because it is developed from and reinforced by strong motives and emotions such as love, joy, generosity and compassion.
Believe it is much more than “important,” it is a “critical, essential and non-negotiable” characteristic of an effective leader. Strong business ethics is a pillar of my strategic planning and strategic thinking business coaching efforts each and every day. Clients are encouraged to develop a set of core values and guiding principles and publish them for their clients and stakeholders to know that this is the way they do business. And furthermore, the clients are continually reminded to make sure the core values are demonstrated in all that they do.