Business ethics holds companies accountable for their actions towards others, both internally and externally. It deals with behavior that cannot be covered by laws and ensures that a company acts with sensitivity, honesty, and good effect. Ethical companies inspire trust and loyalty and consider the needs of all stakeholders.
The primary role of ethics in business is to hold a company and its employees accountable for their actions as they affect others. This includes both internal and external behavior. It keeps businesses and professionals aware of the consequences of their actions so they can responsibly pursue success. Business ethics can apply to all aspects of business and therefore typically have a dramatic impact on the structure of a company.
An important role of business ethics is dealing with behavior that cannot be covered by government laws. There are many actions that, while legal, are also harmful to some groups such as employees, community members, and groups that are affected by a company’s actions. With a code of conduct, a company can self-regulate its behavior and ensure it is acting appropriately.
The standards for what is acceptable in the professional environment are constantly evolving. Another role of ethics in business is to demonstrate behavior that is the current norm. Actions that were acceptable in the past may become inappropriate in later years and vice versa.
In addition to ensuring that a company acts with sensitivity, another function of business ethics is to keep the company honest. While many unethical behaviors aren’t illegal, they can often lead to wrongful acts. Having a code of ethics can encourage employees to remain honest and avoid potentially illegal behavior.
Maintaining strong business ethics can also have an effect on a company’s success. By acting with sensitivity to others, a company can raise its profile in the community and industry. Ethical companies often inspire trust and loyalty in others and by extension their products or services.
Another role of ethics in business is to ensure that the power wielded by large corporations is used to good effect. As a company expands, the opportunities for bribery often increase as well. In some cases this expansion can overshadow or destroy valuable elements in a community. With a good code of conduct, a business can work to undo possible damage caused by its success and even work proactively to help others.
Business ethics can also apply to a company’s shareholders. In making decisions, an ethical company will consider how its behavior will affect all individuals who have a stake in the business. The theory is that while it’s legal for a company to act in its best long-term interests, it’s moral to also consider the needs of those who support it.
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