Importance of Business Ethics and Corporate Social Responsibility

 December 10, 2013 by Laran Joseph

 

Ethics are, at their essence, moral judgements about what is right and what is wrong.  In a business sense, these ethics are decided upon and formed by each company and underpin the decisions that anyone in the business makes.  The decision to behave ethically as one individual to another is easy for any decent moral human being, but it is easy to forget the impact a large, faceless business can have on the world.  Business Ethics and Corporate Social Responsibility are all about bearing in mind the full weight of any corporate decision.

 

 

The Importance of Business Ethics to a Company:

 

Working as an ethical business has many benefits, not least of which is the ability to attract and keep investors, employees and customers.  Knowing that the company they deal with has stated their morals and made a promise to work in an ethical and responsible manner allows investors peace of mind that their money is being used in a way that aligns with their own moral standing. When working for a company with strong Business Ethics, employees are comfortable in the knowledge that they are not by their own action or inaction allowing unethical practices to continue.  Customers are at ease buying products or services from a company they know to source their materials and labour in an ethical and responsible way.

 

 

For example, a coffee company which states all their raw beans are picked from sustainable plants where no deforestation has occurred, by people paid a good living wage, in an area where investments have been made to ensure that producing the coffee for a foreign market has not damaged the local way of life, will find that all these elements of their buying strategy become themselves a selling point for their final product.

 

A company which sets out to work within its own ethical guidelines is also less at risk of being fined for poor behaviour, and less likely to find themselves in breach of one of the multitude of laws concerning required behaviour – for example, laws around payments to corrupt regimes, or environmental practice policies. The whole company can be fined, the directors can be fined, and individual employees can be fined if the responsibility for an infraction falls on their shoulders.

 

 

Reputation is one of a company’s most important assets, and one of the most difficult to rebuild should it be lost.  Upholding the promises it has made is crucial to maintaining that reputation.

 

 

Joseph, L. (2013, Dec). Retrieved 2014, from Importance of Business Ethics and Corporate Social Responsibility: https://www.udemy.com/blog/importance-of-business-ethics/