The importance of good business ethics
Good business ethics can help to establish a successful and long-lasting business.
An ethically sound business operates in a way that is honest and fair, striving to always act with integrity and accountability.
Running an ethical business means more than just looking after your accounts or being honest with customers. It also means accepting some social responsibility and being sure that obligations are met.
Key areas of business where ethics should be carefully considered include employee wellbeing, legal compliance, quality control, public safety, and environmental impact.
Benefits of practising good business ethics
Even if a business appears to be doing well financially, if they are operating dishonestly or without integrity then true success has not yet been reached. Businesses that don’t practise good ethics will not withstand the test of time. Acting ethically is key to a healthy and long-lasting business.
Ethical businesses will find it easier to build trust with customers or clients, encouraging loyalty and long-lasting relationships.
Practising good business ethics can significantly improve several key areas of business including:
- Employee retention
- Employee morale
- Business reputation
- Business profitability
Business ethics and insolvency
Unethical business practices can even have negative effects that lead to businesses becoming insolvent.
Whilst being ethical with customers is important, it is just as important to maintain proper business ethics with vendors. It can be tough meeting financial obligations, especially if your business is just starting out, but bills should always be paid on time.
Paying suppliers and contractors late can have a domino effect, negatively impacting their business and ability to pay their own suppliers or employees. If you have no legitimate reason for paying a supplier late, then to do so is unethical.
Over time, a business that uses unethical practices will foster distrust and a bad reputation, putting off suppliers, employees and customers alike. Acting unethically is not profitable in the long-term and will eventually lead to a business’ demise.
Gerald Irwin of Sutton Coldfield-based Licensed Insolvency Practitioners and Business Advisers, Irwin Insolvency said: “In the same way that individuals have a social responsibility within their own communities, so do businesses. It is always a good idea to find ways that your business can be a benefit to the community.
Practising good corporate business ethics is a choice, but naturally, there will be times when it will be easier to make a choice that is contrary to proper ethics, but who said that running a business was easy! Doing the right thing will pay dividends that may not be evident at the time but will last for years and will help your small business find true and total success.”