Proper business practices and policies are guided by business ethics. It is according to the law or due to the framework that a business follows to be accepted by the public.
Ethical Business practices ensure that the public gets good treatment and consideration through the foundation of a level of trust between the business and its consumers.
Business ethics developed from understanding what is right and wrong, to doing business legally instead of doing everything possible to be one up against the competition.
5 Importance of Ethics in Business
1. Commitment to Consumers and Society
Business ethics serve as the driving force for brands to transfer their business focus to putting the priority on the well-being of society and promoting the quality of life of consumers. They formulate and sell products and services that truly fill the needs of the customers, as well as regulating a company that is guided by solid ethical business practices.
2. Ethics Improves Your Business Reputation
Business ethics help secure a good reputation for your organization. It does not only feel good to be part of a business with a great reputation, but it is also great for the company.
When you have a reputation for unfailingly being ethical in how you source and manufacture products, and deal with employees, customers, and the community, many people will want to do business with you. Social media ethics is also important and critical for your business's reputation.
3. Business Ethics Help You Retain Top Talent
Good Business Ethics start at the top. If you are a business owner or company manager, it is essential to govern by example. When your employees see you make ethical and sound choices, it is letting them know that they can have assurance in the company. They know that you will do right to them and your customers.
Business ethics boosts motivation and as word spreads about how you treat your employees well, you will also draw in good workers. If you have strong employee retention rates, it will help you save money in the long run on recruitment costs and training.
4. Limit Risk with Good Business Ethics
Businesses and organizations that practice good Business Ethics face less risk for fines and other legal difficulties. The law and regulations are indeed complicated, but a lot of trouble can be prevented just by doing what is morally right. If business owners decide on corporate matters with that on top of their mind, you can save the stress of having to defend your company against claims and penalties.
5. The success of the company depends on the Business Ethics
If and when the entire corporation applies an ethical manner, they reap the rewards of its useful and long-lasting impacts. They will be able to maintain highly talented employees and attract new ones. They will be able to produce an outstanding reputation within their business industry and their community.
Employees who feel a close bond with the administration team will most likely keep the company stable. With the business having ethical managers, employees will also have to follow ethical work practices too. They are manageable to train and can perform better decisions because they use business ethics as their guide.
Definition of Ethical Standards and Legal Standards:
Legal Standards
Legal Standards are principles that are established in governmental legislation. All the regulations and laws that attorneys point to are legal standards.
If you will drive around the streets through any big city, you will notice parking signs all over the place warning you that you can not park there for a long period, and they mention a city ordinance or code. This illustrates a legal standard.
Legal Standards are helpful, as they assist people to know what they cannot do. If legal standards are in place, authorities are authorized to execute rules when people do something illegal.
For example, if somebody steals, the legal standard that says "you cannot steal" is used to discipline that person, possibly by placing him in jail.
Ethical Standards
Ethical standards do not necessarily have a legal basis. They are based on human principles of what is right and wrong.
For example, when you try to park your car in a parking lot and there is only one parking spot left, the only legal standard you have to follow is not going over the speed limit or crashing into another car. If you see another car about to go into that spot, Ethical Standards tell you not to fight for the spot but to give the spot to the car that was there first.
It is doing what is right. That is an ethical standard. Imagine yourself being the one about to go into the spot, and somebody promptly drove by and parked in that one spot. You will feel wrong, and you were wronged, ethically speaking.
The difference between Legal Standards and Ethical Standards:
An action is deemed legal as long as it doesn't break any prevailing laws carried out in a certain jurisdiction.
In contrast, an action is ethical if it doesn't disagree with any morals or codes of conduct distinguished by society or an institution.
A legal act applies to all members of the society where specific laws are executed; thus, discerning these laws is required. Observing ethical standards is voluntary as they are usually based on individual understanding of what is right or wrong.
Laws are codified, generally contained in a nation’s constitution. In contrast, ethical standards are abstract with no written or legal basis.
Nice one.