Ethical Behavior Is Essential to Business Success
A Culture of Ethical Behavior Is Essential to Business Success
Research from the University of Notre Dame finds that ethical business operations are highly important to success, while unethical behavior can negatively impact a business’s prospects.
By Sean Peek, Senior Analyst | Editor Reviewed: Adam Uzialko, Senior Editor
Business News Daily | Updated October 25, 2024
Business ethics isn’t always exalted in every workplace, but it’s critically important when it comes to providing customers with quality service, adhering to regulatory compliance standards, and avoiding steep fines and lawsuits. Establishing an ethical culture starts with company leadership and involves ongoing emphasis that ethical standards are respected.
Although this can be a lot of work, it can also positively impact the bottom line, protect a company’s brand and result in higher customer satisfaction. This guide breaks down the importance of business ethics and how to establish an ethical culture in your company.
What is ethical behavior?
A person who demonstrates ethical behavior demonstrates a strong moral code and a consistent set of values. Ethics can be rooted in belief or the pursuit of making the world better. Those who exemplify ethical behavior do the right thing regardless of whether they get credit for it. This sort of behavior is not limited to the workplace; it can be present in every facet of life.
In a business setting, ethical behavior applies to any employee, team lead or supervisor. They should display behavior that is honest and fair in their relationships with co-workers and their clients. Displaying good ethical behavior can boost company morale and client relations. It’s easier for a business to retain employees when they work for a company that they believe in. Employees want to work for companies that treat everyone and their clients fairly and have good and ethical business practices.
A high ethical standard extends to customers as well. A reputation for positive ethical behavior entices more potential clients, customers and partners to work with you. It also builds customer loyalty over time, creating a customer base that is likely to refer your business to others.
Why is ethical behavior important?
To understand why ethical behavior is important, it might be helpful to know how unethical behavior affects a company. Think about a business that hires only family or one that gives inappropriate incentives, for example. While these actions might not be illegal, they can definitely have negative effects on the morale and success of a company, especially if their dirty laundry is aired publicly.
Then, of course, there are the more serious consequences of highly unethical behavior. Businesses that violate ethics and engage in illegal activities can be subject to costly fines and lawsuits. For example, international bank HSBC was subject to a decade-long enforcement action costing it $1.92 billion after the federal government determined the institution violated money-laundering laws and sanctions rules.
On the flip side, a leader who personifies ethical behavior will be fair in all situations. In turn, employees will trust that their leadership team is working toward the greater good of the entire company. By being ethical, leaders can foster an environment that rewards and encourages good attitudes….[MORE]
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To read the entire article by Sean Peek, at the Business News Daily website, visit: A Culture of Ethical Behavior Is Essential to Business Success