Business Ethics: A success formula for business

Hey there! TallyDekho is here to tell all the readers about the role of business ethics in making the business successful. In this article, we’ll get into the overall study of business ethics and its significance in business success.

Business yields its best when done ethically. This statement rightly defines how important is the conduct of business in generating a good public image. The combination of good business skills and ensuring effective implementation of business policies and company norms with an objective of fair and equal social behavior to gain public confidence is all that almost every successful business does for becoming ethically sound. In today’s time, no business can imagine long-term success without following appropriate business code of conduct.

What is Business Ethics?

The word business ethics is made up of two words, ‘business’ and ‘ethics’. The word ‘business’ refers to any organization dealing in goods and services with an objective of earning profit. On the other hand, ‘ethics’ means all the business beliefs, norms, policies and practices that the people in a particular business entity should do. Basically, ethics are concerned with the obligations, fairness, integrity and social accountability that should be maintained by a business to sustain good public relations. In my opinion, if a business wants to go long, adopting a fair social behavior is the need of the hour. In other words, Business Ethics establishes an ethical relationship between the concern and the consumers, employees, and society.

Classification of Business Ethics

It is the duty of every business to use society’s resources judiciously and make the optimum utilization of the resources in the best way possible. On the basis of various criteria for conducting the business in an ethical manner, business ethics are classified as mentioned below:

• Personal code of conduct
• Official code of conduct
• Personal loyalty between superior and subordinate
• Corporate Responsibilities towards society
• Organization loyalty towards the organization
• Technological obligation
• Economic obligation towards the economy
• Organization obligation towards legal environment

Almost every business code of conduct comes under the above-mentioned heads. A business that wants to be successful in both spheres, i.e, in profitability and maintaining goodwill has to adopt such practices. In today’s time surviving in such a competitive environment is a challenging task. So, to win a competitive edge over others, every business concern chooses to follow a set of guidelines to work in an ethical manner and that set of guidelines is referred to as Business Ethics.

Components of Business Ethics

Well, we’ve already discussed the meaning of business ethics and its classification as well. We shall now see the components of business ethics.

The above diagram clearly showcases the major elements of business ethics. Let us discuss each of them in detail:

Honesty & Trustworthiness

This is the most important element of business ethics as every business relationship lies on the foundation of trust and honesty. A successful business will always maintain trust with society and the employees of the organization as well.

Consumer Integrity

The term consumer integrity means being honest and fair with the consumers. The consumer is considered a vital part of any business and so is consumer integrity.

Public Accountability

In every business organization, whatever a business serves, there should be an element of accountability. The business is should always be accountable to the public for the products and services it’s delivering.

Values & Code of Conduct

Every business organization follows a set of guidelines generally known as a ‘code of conduct’. Those values and code of conduct define the working criteria for the people in the organization.

Ethical Behavior

Ethical behavior means business behavior that is legally, technologically, economically and socially ethical. A business should opt for such behavior for sustaining market coverage.

Fairness & Social Responsibility

Differentiating among employees or consumers is considered unethical. This component of business ethics asks a business concern to be fair and socially responsible.

Role of Business Ethics in the Business world

It is now clear how crucial is the role of business ethics in the entire business segment. Following are the advantages a concern enjoys by doing business practices ethically:

Enjoys a competitive edge over others

An organization conducting business ethically frames a good image in the eyes of society. Hence, it enjoys a competitive edge over others and becomes more popular relatively.

Generates goodwill

Abiding by business ethics not only generates more chances of profitability but it also creates a good public reputation of the business. Therefore, business ethics are the ladder for goodwill generation.

Best utilization of society’s resources

When a business works ethically, it is very obvious that society’s resources will be utilized at their best and the resources utilized best will yield best for the business as well as the society.

No government interference

When a business successfully establishes a good public image, it also eliminates government interference to an extent. The government believes in the business goodwill and doesn’t see it deliberately.

Customer retention

A business with good customer reviews will bring more customers. A satisfied customer will never switch and an organization that strives to make its customer satisfied will always retain them.

This is how business ethics plays a vital role in business success and it is absolutely right to say that business ethics are actually the success formula for any business concern. Every business should abide by them and engage in a good code of conduct that will ultimately bring prosperity to their business as well as profit. Stay connected for more interesting articles. Feel free to share your feedback.