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Good business ethics essential for long-term success

By Dotun Merino
02 December 2021   |   4:01 am
A company’s ethics will determine its reputation. Good business ethics are essential for the long-term success of an organization.

Prof. Akindotun Merino

A company’s ethics will determine its reputation. Good business ethics are essential for the long-term success of an organization. Implementing an ethical programme will foster a successful company culture and increase profitability. Developing a business ethics programme takes time and effort, but doing so will do more than improve business, it will change lives.

A company’s ethics will have an influence on all levels of business. It will influence all who interact with the company including customers, employees, suppliers, competitors, etc. All of these groups will have an effect on the way a company’s ethics are developed. It is a two-way street, the influence goes both ways, which makes understanding ethics a very important part of doing business today. Ethics is very important, as news can now spread faster and farther than ever before.

A human being’s personal ethics determine individual standards of right and wrong. Ethics allow people to determine what they should do in a given situation. Each person develops ethical standards, and it is the responsibility of each individual to examine personal morals and behavior. In business, ethics refers to the behavior relating to the moral problems that occur in business organisations.

People often automatically assume that businesses are unethical. Business seems to be constantly linked to scandals. Given the media attention to bad ethical decisions, companies that practice good business ethics can distinguish themselves in the minds of their customers and their employees. The company culture helps determine the ethics of the organisation. It is crucial that businesses behave ethically in every working relationship.

Ethical obligations:
• Employees: Companies need to treat all of their employees ethically. Begin by providing employees with the rights guaranteed to them by the United States Department of Labor. Ethical businesses, however, may go beyond the minimum requirements in the way that they treat their employees.

• Shareholders and investors: There is a moral obligation to pay back investors and meet the needs of shareholders, particularly low level shareholders.

• Customers: Every business needs to build ethical customer relationships by providing safe products and honoring warranties. Consumers are growing more aware of which companies treat them fairly, and they will support the ones they trust.

• Community: Businesses have an ethical obligation to be involved in their local communities. This includes communities where they interact with customers and beyond.

• Vendors and Other Companies: Always deal ethically with vendors and other organizations you work with.

Operating an ethical business has a number of rewards. The circumstances of each company will determine the results of managing ethics. There are, however, 10 common benefits that all companies have when they manage their business ethics.

Benefits:
• Ethical companies comply with all legal requirements and are less likely to be fined or sued.
• Consumers are more likely to support a business with a reputation as an ethical organization.
• Companies with ethical values improve their communities.
• Ethical rules save organizations from accidently violating the rights of employees or consumers.
• Employees’ personal moral standards will improve at an ethical business.
• A fair working environment facilitates teamwork and productivity.
• Many successful financial business practices are reinforced by ethical business practices.
• Established ethical guidelines would lead a company in times of change and stress.
• Ethical companies retain employees and save money in turnover.
• There is personal satisfaction in doing the right thing.

Implementing ethics in the workplace will also lead to better profits and long-term growth. Unethical business practices can cause immediate financial gain, but they will cost companies customers and employees over time. When unethical practices become public knowledge, it is difficult for a business to recover its reputation. Organizations with reputations for being ethical will also find it easier to earn credit, find investors, and expand into international markets.

Therefore, it is essential that organizations implement ethics in the workplace, which can be a complex but rewarding task. Every individual has a unique set of ethical standards. Allowing each person to follow his or her moral compass will result in varied results. Companies need to focus on implementing uniform ethical standards and rules throughout their organizations. Employees should never have to question whether or not they are doing the right thing.

Guidelines for Managing Ethics in the Workplace
Managing ethics in the workplace requires certain tools. Every organization needs a Code of Ethics, a Code of Conduct, and Policies and Procedures, which we will discuss later. These tools direct the organization as leaders attempt to manage ethics.

Guidelines for Implementing and Managing Ethics:
• Give it time: Managing ethics is a process-oriented activity that requires time and constant assessment.
• Focus on behavior: Do not give vague requirements; make sure that ethics management has an impact on behavior.
• Avoid problems: Create clear codes and policies that will prevent ethical problems.
• Be open: Involve different groups in ethics program and make decisions public.
• Integrate ethics: Make sure that all management programs have ethical values.
• Allow for mistakes: Teach employees how to behave ethically, and do not give up when mistakes happen.

Roles and Responsibilities
The roles and responsibilities necessary to effectively implement workplace ethics will vary with each organization. A manager should be in place to oversee the ethics program, but he or she will need the support provided by other positions. Smaller organizations may not need to fill all of the roles listed below; determine what your company needs before executing an ethics programme.

Roles:
• CEO: The CEO of every company needs to support business ethics and lead by example.
• Ethics committee: An ethics committee will develop and supervise the programme.
• Ethics management team: Senior managers implement the program and train employees.
• Ethics executive: An ethics executive or officer is trained to resolve ethical problems.
• Ombudsperson: This position requires interpreting and integrating values throughout the organization.
•Prof. Akindotun Merino is the CEO of Jars Education Group; a Professor of Psychology and a Mental Health Commissioner in California.

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