What is business ethics and why is it important?

business ethics

Business ethics is more important than ever, not only forthe image that a company projects to its clients and the general public, but also toattract the best talent, those professionals who can add a lot of value to the business.

Businesses are no longer simply where employees go to work, and their lives don’t begin at six when they leave the office. Now,companies must have values ​​and talent will want to identify with them. And it is that the type of worker is changing, and more and more millennials are part of the workforce of any organization and, for them, things like diversity at work and sustainability are very important.

Yes, we are talking aboutbrand identity, how a company makes decisions, employer branding … and many other things. What’s more, business ethics also determine how an organization acts and what decisions it makes, and this can even affectlegislation.

Definition of business and work ethics

Business ethics isthe group of values ​​and norms that arise from the culture of the company, and its objective is to improve aspects such as the environment and work environment, promote equality, respect for rights, etc.

This code is the one that the company follows when carrying out its day-to-day activity, making decisions that involve ethical dilemmas or not, managing its workers and having a role within society.

Having good business ethics will not only makethe company attractiveto more and better professionals, those who can choose the company with which they want to grow and the project in which they believe the most, but it alsogenerates trust among clients or consumers..

Next, we define some aspects, values ​​and concepts found within the business ethics of organizations.

Corporate social responsibility (csr)

Social responsibility isthe awareness of the impact that one’s decisions will have on society, whether in the present or in the future. Corporate social responsibility is this, but linked to a company.

Social responsibility has to do with ethics and morals, and the actions that are carried out, which will affect other members of society.

Today, thereare many companies that allocate part of their budget to social policiesthat aim to help with social and / or environmental problems.

Creation of shared value (cvc)

We have already talked about this concept, although perhaps giving it other names. And it is that the creation of shared value is nothing more than the ability of a company to not only solve a customer problem (with the product or service it offers) but alsobe part of a social change to solve a more global problem, which It doesn’t just affect your business function, so to speak.

Environmental ethics

Every company, no matter how small,has an impact on the environment, whether through energy consumption, noise emission, gases, waste production, etc. That is why organizations must decide how to address this consequence of the exercise of their activity, and one of the basic values ​​of business ethics will besustainability.

In an interview we did with Emilio Duró , he told us about the importance of sustainability for companies of today and tomorrow, and assured that those companies that are not sustainable will end up disappearing sooner rather than later, since the problem of climate change is one of the biggest concerns globally, andboth consumers and talent will not forgive a company that does not meet this premise.

How does business ethics work?

Let’s see it another way; Business ethics arethe limits that the company decides not to cross, the premises it wants to follow or the objectives it wants to achieve, no matter how utopian they may be, on a social and environmental level.

This not only refers to allocating part of the annual budget to a specific cause, but also represents a framework within which the company must act and demand minimums (for example, diversity in the workplace, recycling, etc. .

Advantages of having good business ethics

We have already talked about some of them, but we are going to review one by one all the advantages enjoyed by a company that defines, has and applies good business ethics.

  • It will always stay within the legal limit. Being guided by a good ethical code in the company is also a way to ensure that no right is violated, for example, or that the organization cannot incur complaints or be part of any illegality, because it will move and act within the legal framework thanks to the limits that business ethics will have imposed.
  • It will attract the most prepared human talent. In the past, it was the companies that chose the employees they wanted to be part of their workforce … but today, many times, the exact opposite happens. The personal brand of candidates is something that did not exist before, and now it is companies that want to recruit what could be a key piece in their organization. Then, the employer can no longer offer a simple salary and the benefits that everyone offers; the professional hopes to find a place to work that shares the same mission, vision, ethics and morals.
  • You will build trust among potential customers. If your business has more than one competitor (which surely will), the consumer or client will not only seek the satisfaction of their need or the quality of the service; and it is that business ethics is much more than an added value. Many consumers prefer to buy a product that they like less or hire a service that is less convenient, just to consume what is going to make the social or environmental change that interests them. Consumer awareness was something that was not given so much importance before, but from now on it will be more and more important.
  • It will be attractive to investors and shareholders. Good business ethics is often synonymous with the future or, more than synonymous, one of the requirements. That is why it is always an interesting thing to find investors or shareholders, and they are more likely to invest money in these types of companies.
  • It will improve staff satisfaction. If your employees feel like they are doing their job for the greater good, or helping an important cause with their efforts, they will be more motivated to do so. This will make your staff have more dedicated and satisfied professionals, who look out for the good of the company and the corporate objective.
  • You will access social benefits. For more and more companies to develop a social policy with good business ethics, there are several social benefits that they can enjoy. One of them is, for example, the power to deduct taxes.
  • Your company will be a role model. The domino effect that companies with good ethics produce in the others is very large, since in this way the latter are motivated to offer the same “added value”, either to be eligible for their consumers or to attract the best human talent .

Positive examples of business ethics

Recently ,Bimbo, the world’s leading bakery company, was recognized as one of the most ethical companies in the world in 2021 and according to The Ethisphere Institute . This institution evaluates companies according to five indicators:

  • Regulatory compliance (represents 35% of the valuation)
  • Social responsibility (represents 20% of the valuation)
  • Ethical culture (represents 20% of the assessment)
  • Corporate governance (represents 15% of the valuation)
  • Leadership, innovation and reputation (represents 10% of the valuation)

This assessment is awarded based on the formulation of more than 200 questions about the culture of the company, its environmental practices, diversity, the initiatives it carries out and the ethical activities it carries out.

And in the same ranking is3M, an American multinational dedicated to research, development, manufacturing and commercialization of various technologies. This company ensures that its code of ethics is a clear advantage over its competitors! In the year 2021, the more than 200 questions that were asked to the candidate companies to enter this ranking were related to the context of the Covid-19 pandemic, global health factors, environmental and social factors, safety, inclusion, social justice and equity.

How can software help you improve business ethics?

Many Human Resources departments are buried in the paperwork produced by payroll management, spreadsheets for assigning and tracking absences and vacations, time sheets … Theyspend a lot of time on administrative tasksand, in the end, They cannot define a talent management strategy that helps them empower their employees and improve their satisfaction with the company, their professional development, their productivity, etc. And one of the other things you can’t spend time on is actually creating good corporate ethics for the company.

What Kind of Software Can Help HR Departments Develop Good Corporate Ethics? The one thatautomates all those manual tasks that take so much time from Human Resources managers.

Tasks such as time control , absence management , document management , personnel selection , management shifts , evaluating performance … there are many things that can be automated, digitized and optimized with specialized software, all in one and You save hours of work and human error.

Digitization for sustainability

The digitization of the company and, above all, ofdocument management, also helps an organization to have a lower impact on the environment, thanks to the amount of paper and other resources that it will no longer use .

Look for software that, in addition to managing the storage and sending of company documents online and digitally, offers youinformation securityandelectronic signature, Transparency comes from good communication

Clear, transparent and honestcommunication , both internally and externally, enhances trust in the company. Now more and more companiesare openly showing their processes, suppliers, supply chain and other stages of productionor any other action they carry out. And it is that consumers want to be sure that they are buying or hiring the service that aligns with their philosophy of life.

On the other hand, internal communication is of vital importance sothat the staff can verify that their organization is carrying out a good business ethics policy. Get a software or tool that helps teams and departments communicate , that creates a feeling of belonging, that provides a place where communication is two-way and the employee is always informed of everything.

About Kushal Enugula

I’m a Digital marketing enthusiast with more than 6 years of experience in SEO. I’ve worked with various industries and helped them in achieving top ranking for their focused keywords. The proven results are through quality back-linking and on page factors.

View all posts by Kushal Enugula

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