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Business ethics are important for success in all areas of a company, from management practices to financial dealings and community involvement. Treating employees, customers, and suppliers fairly can lead to positive word-of-mouth and support from the community. Conversely, unethical behavior can lead to negative consequences, including loss of customers and investors.
The importance of business ethics should be evident in every area of the business. When a company is known for dealing honestly with all people, from its employees and customers to shareholders and suppliers, it is often more likely to be successful. While ethics is a subjective topic that can mean different things to different people, it’s still very important in all kinds of business settings.
Business ethics play an important role in corporate management practices and hiring. The first people hired must be aware of the company’s values and ethical practices, then as the company grows and expands, these practices continue to be upheld. When a company is run well, employees usually feel they are being treated fairly; this can help the company hire and retain excellent employees, which is critical to its overall success.
Naturally, the importance of business ethics goes beyond the direct relationship between its employees and the management team, extending to how the company treats the local community and its social responsibility. A business that behaves ethically as a member of the community will often find that the community offers its support in return, which can also be invaluable to the success of the business. This can be done by attending community events, donating funds to support local charities, or simply by being honest in dealings with other local businesses.
Business ethics are also important in financial matters. This becomes clear when the company is dealing with people like vendors and shareholders. A company that does not conduct itself with integrity can find it difficult to do business, as the suppliers that supply the materials it needs may not be willing to extend credit, while shareholders may no longer be willing to invest their own money. While the initial payoffs might be high, the emergence of ethical issues within the company can make investors uncomfortable risking their money.
Customers who don’t feel like they’re being treated fairly by a business often won’t hesitate to do something about it. Social networks have made it much easier to share negative information about a company, and customers don’t hesitate to do so. It doesn’t take a lot of bad press for sales to drop. This principle also works in the opposite direction, however: Customers who feel like they’re being treated honestly are more likely to tell their friends to visit the business.
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