What are business ethics, and why are they important? This is something that everyone who wants to grow their business, is planning to start one, or looking for a job should know and understand.
Table of contents
- What are business ethics?
- Why is ethics important in business?
- Importance of work ethics for an individual
- Benefits of business ethics
- Types of business ethics
- What are some examples of bad business practices?
- What are some examples of good business ethics?
- Conclusion
To strengthen a business or to improve yourself as a professional and increase your value, you need to learn the importance of ethics in business. Businesspeople like Elon Musk, the ‘Technoking of Tesla,’ and Jeff Bezos, the founder of Amazon, got to the top of the world because they know the benefits of business ethics.
Just like you, they also started without experience. And as they gained more and more experience, they understood good business ethics better than anyone, which is why people now dream of working for them. However, to reach anything close to their levels, you must also understand the nature of business ethics and what can benefit you as an individual worker or your business.
What are business ethics?
If you want to master something, it’s always better to study it from the basics. If we go by Wikipedia’s definition of business ethics, “it is a form of applied ethics or professional ethics, that examines ethical principles and moral or ethical problems that can arise in a business environment.”
In simple terms, business ethics are written or unwritten rules that aim to bring discipline to the organization and set standards and moral values to keep the workflow smooth and efficient while maintaining good relationships between employees and management.
Ethics are moral principles that help you in all aspects of life. They can help you discipline yourself and become a better version of yourself. Any great person or leader has their own ethics, which they follow and encourage others to do so. Having a set of principles help you become more efficient and improve your work.
Your business ethics will ultimately decide your future as an individual or your business. How successful you will become will depend on your work ethic and, of course, a little bit of luck. But, on the other hand, failing to meet those standards will drastically affect your career, and not in a good way. To know how your business ethics can affect you, you’ll have to see the importance of business ethics.
Why is ethics important in business?
Why are ethics so important? Let’s get a better understanding of this with an example.
Imagine you are looking for a job. One day you get job offers from two different companies. You find both offers equally lucrative and need help deciding which one to pick, so you do what anyone with common sense would – start researching those companies to find out which one is better for you.
In your research, you stumble upon employee reviews and find out that the first company focuses on their work ethics and creates a fair and friendly environment for their employees. But the second one doesn’t care about work ethics. In addition, the whole place needs more discipline, and the employees are unsatisfied and unmotivated to work.
So, which one would you pick? The answer is obvious – the first one is an infinitely better choice. This is how businesses with good work ethics attract more employees. They have more options than their competitors, which helps them find better talents. The good word spreads quickly.
The importance of ethics in business should be valued and noticed by all companies. But unfortunately, this is one of the reasons many businesses fail very quickly. Nowadays, the competition is fierce in any business, and you’ll need to stay ahead of your competitors to succeed. This is where business ethics come in. You are already a few steps ahead if your company has better business ethics.
Another importance of ethics in business is that it directly impacts your reputation. One can know a lot about your business from its ethics. Your business ethics represent your moral standards, and you will be judged by them. Therefore, having sound business ethics helps you build a positive reputation. Your ethics are an essential part of your business, but they are also crucial for you as an individual.
Importance of work ethics for an individual
If you were a recruiter, what type of employees would you be willing to hire? Naturally, you’ll look for a skilled individual with great morals. All around the world, recruiters look for employees with solid work ethics and skills.
Having great business ethics makes you more likable to upper management and recruiters and increases your chances of getting the job. Business ethics favor you and help you do your work more smoothly and better. It makes your workflow better and makes office life easier for you.
Having a set of rules to follow also brings discipline to your life. Your work ethic will help your personal growth and help you outside work. Practicing work ethics makes you morally sound and develops professionalism in almost all tasks in life.
It’s essential to learn great business ethics early in your career. Unfortunately, some people don’t realize until they make mistakes and face the consequences. But you don’t have to make mistakes to learn it. We answered what business ethics are and why it is important in this article so you can learn and get a headstart.
While good work ethics help you, bad ones damage your career. Which is why it’s necessary to identify lousy business practices. You can always learn from the examples of bad business ethics from the mistakes made by others. Your career and business will significantly benefit from it.
Benefits of business ethics
In a good business, ethics are designed to benefit the organization while staying fair to the customers and workers. If your rules can fulfill this task, which is not easy, they are good business practices. Here are some benefits of business ethics your business can enjoy.
Motivates your employees
As we discussed above, if you were looking for a job, you’d like to join a company with good business ethics. And it’s a no-brainer that most of the workers would think that. Having a good work ethic makes your employees like the organization more and genuinely want to work for the growth of your business. Good work ethics motivate your employees and result in higher productivity. Motivated employees provide better customer service and significantly improve the quality of work. Any supervisor looking for ways to motivate employees should focus on the work ethics of the organization. It’s the first step.
Creates a better work environment
Your employees must follow the business ethics of an organization. When they do, it creates a good work environment for everyone. For example, a business with good work ethics would have employees that are respectful towards each other and help each other out whenever it’s needed. All this results in a better work environment. As we already know, a better work atmosphere attracts more talented workers and motivates the existing ones.
Statistics suggest that a positive work environment increases employee satisfaction by 33%. In addition, happier employees often spread the word about the company, which means a positive (and free) advertisement for your business.
A better understanding of the organization
With a better work environment come better communication and understanding among the employees. As a result, there won’t be confusion among the employees and the management, making the work easier and smoother. For example, suppose you were an employee with issues that needed to be sorted out. In that case, you’d be much more comfortable talking with the management in an environment that encourages communication and has an ear out for what their workers have to say. In addition, employees will be willing to give feedback on things that need improvement, which will benefit your organization.
Attracts investors
Every business needs investors as much as it needs customers, so companies always try their best to attract investors. From an investor’s perspective, what type of company would you be willing to invest in? I’d invest in one that will generate high profits but has a healthy culture. That is your primary goal as an investor. Almost every time, you will find a company with a better work ethic to be more profitable in the long run. As we have already discussed, good work ethics attract better talents, motivated employees, and customer satisfaction. And these are the main factors besides your finance sheet that attract investors.
Increases profit
The primary aim of most businesses is to generate profit. When entrepreneurs begin their startups, they fantasize about how much their business will make. Good work ethics within the company can make those dreams come true and get you into the green. Your employees will be more productive and faster, and the workflow in your business will be smoother due to better communication. All the factors discussed in this section will contribute towards higher revenue, while good optimization leads to higher profits.
Types of business ethics
We can categorize business ethics into different types based on their focus. For example, other businesses have different goals, and the nature of business ethics varies based on that.
Customer-oriented business ethics focus mainly on customer satisfaction. The rules focus on prioritizing customers and what they want. These companies are usually rated high by customers because of their excellent customer service, and they thrive on that.
Profit-oriented business ethics focus on generating maximum profit. However, the methods and rules might not always be ethical. It can become an example of bad business practices very fast, depending on how they treat their employees and customers.
Some businesses care about the environment and follow environment-oriented business ethics. These are still not everywhere, but they are more common every day. After all, your revenues are affected sometimes because you can’t use traditional production methods that damage the environment sometimes. These businesses are often well-liked and supported by people and activists. Many people will throw money to support a good cause.
Business ethics vary depending on their priorities and what they focus on. As a result, not all businesses have the same ethics, and not all are ethical. It’s on you to figure it out and take your business in the right direction.
What are some examples of bad business practices?
When I was starting out as a writer, I was inexperienced, and work ethics were indeed not my strong suit. As a result, I made many mistakes in my career, which I wish I hadn’t. Let me tell you about how I almost got fired due to my lousy work ethic.
I was young and got a great job as a writer. However, I was lazy and used to procrastinate, and I often missed my deadlines. Once, I decided to take a shortcut. Instead of putting effort into writing the article I was commissioned for, I used AI to write it for me.
My employer found out, and I almost lost one of my best jobs. But fortunately, everything ended well, and I learned from my mistakes. After that, I focused on improving my work ethic and avoided making the same mistakes again.
Here are some examples of bad business practices you should avoid:
Dishonesty
Never be dishonest as a worker, a business owner, or in any other capacity. Trust is one of the most critical factors in business; when you are dishonest, you lose that. You make it harder for others to trust you when you are dishonest. As a company, when you make false promises and get involved in false advertising, your customers lose trust in you. They don’t trust your products and future promises anymore. When you are dishonest as a worker, your employer hesitates to assign important projects to you. Remember, it takes much more work to regain broken trust than build it in the first place.
Taking shortcuts
Do not ever take shortcuts. I made this mistake, and probably at one point, you have also. Learning the lesson and focusing on providing value, not cutting corners, is vital. They are shortcuts because you have to cut the quality to save time, and that’s a bad tradeoff. Low-quality work leaves a wrong impression on your employer and the customers. Don’t use the methods you are told not to use; it is for a reason. Taking shortcuts damages trust, and everyone becomes more cautious while working with you.
Breaking agreements
Breaking agreements is something you should avoid for legal and moral reasons. As Frank Underwood would say, “The nature of promises, Linda, is that they remain immune to changing circumstances.” When you don’t do your work according to what you agreed to, it makes you look very unprofessional and results in unhappy clients. You can also get into legal trouble for breaking agreements and not delivering on your promises, so as a business, you should definitely avoid this. Another lesson here is to think clearly and deeply before agreeing to something or making a promise, so you don’t have unexpected difficulties.
Neglecting you work
Neglecting your work and not paying attention to the details makes the end result average, and the average is not enough. You have to stand out from others and be better than them. Not paying enough attention to your work means not using your full potential and not making the best product you can. So always try your best and focus entirely on your work.
Missing deadlines
Missing deadlines is one of the most unprofessional things you can do as an individual or a business. Unfortunately, it happens a lot in the real world, and only sometimes are there penalties. Of course, it isn’t always possible to deliver on time due to circumstances. But whenever something like that happens, let your client or employers know in advance. Finish your work within the deadline as often as possible. If you miss your deadlines, the client might not want to work with you again.
What are some examples of good business ethics?
You’ve just read the examples of bad business practices, and now you know what to avoid. It’s time to learn some principles of business ethics so you can focus on them and improve yourself. Here’s a list of 7 principles of business ethics to guide your career the right way:
Teamwork
Teamwork is essential for work, sports, and other social activities. Working as a team makes every task more manageable and often more fun. Solving a problem or finishing work as a team is far easier. You get to learn from your coworkers and improve yourself in a group. Working in a team helps you get to know your coworkers better and improves your relationship with them. It overall creates a better environment and increases the productivity of everyone involved. Brainstorming gets much easier when team members try to come up with ideas and speak their minds.
Honesty
Honesty is essential in both work and life. In the example above, we discussed how dishonesty can affect your career. It would be best if you avoided it at any cost. Always be honest because your employer will be more upset about you being dishonest than they will about you messing up your work. Remember that you can always redo your work and fix your mistakes. Still, when you are dishonest, you lose trust, which is infinitely more valuable and, if possible, very difficult to regain.
Communication
Again, communication is the key. It applies to work, relationships, writing, friendships, and life. Communicating and expressing yourself helps with teamwork and builds trust. Speaking about problems or new innovative ideas gives you an advantage. It’s easier to communicate in a work environment where feedback is encouraged. More businesses should try encouraging their employees to talk to their seniors. It will help them learn and express how they feel about the system. On the other side—time is precious—and sometimes you can solve a problem quicker because there’s no need to involve all the people in the chain to get something done.
Taking responsibility
When a company has to select someone to promote, they always look for candidates willing to take responsibility. To advance your career, you must show that you can take responsibility and are ready for the next step. You also have to take responsibility for your mistakes and own them. It’s the responsible workers that drive a business forward. Whether you’re aware of it, when you are irresponsible, you tend to make more mistakes and sabotage your career. Always keep in mind that responsibility leads to success.
Time management
Time management is a highly essential skill that is much needed in everyday life. You need to learn how to manage your time to become a more efficient worker and get things done before the deadlines hit you. With better time management skills, you will also have more free time for yourself and more time to focus on improving the small details in your work. Stop procrastinating – it will save time and make you way more productive. If you are struggling with it and don’t know how to stop it, you can read our article about how to stop procrastinating.
Mutual respect
Mutual respect is unfortunately not as common as it should be, even though it should be a trait of every decent human being. Well, not everyone is decent, I guess. Mutual respect makes the working environment better and establishes a connection among coworkers. This results in better teamwork. Mutual respect between an employee and someone at a higher position than them is also fundamental – it makes communication easier. Notice how all these business ethics we are talking about are interconnected and help one another.
Professionalism
How professional you are during a meeting with your client determines whether you will get the deal. Teamwork, honesty, communication, time management, responsibility, and respect, all the business ethics we just discussed, are traits of a professional businessman. Professionalism doesn’t only apply to the employees and employers but everything related to your business. For example, if someone visits your website, they will first notice how professional it looks. And that will be their first impression. Ideally, everything about a business and how it runs should be professional.
Conclusion
The work ethic of a business is the core part of the work environment it creates. It shows what the goals and morals of a business are. The type of work ethic your company follows will either boost or damage its reputation, so be careful about the practices and directions you create for your employees.
To improve your work ethic, you must be a team player, be honest with your coworkers and employers, communicate your ideas, be respectful, take responsibility for your mistakes, manage your time in the best way possible, and be professional. These are universally accepted work ethics, and you can’t go wrong with them.
This was our take on business ethics and why they are important. Take your time to digest everything in the article and follow the advice to avoid mistakes that can damage your career. Remember that you can and should pick your work ethic based on your own moral standards, but ensure to hold those standards high.