If we turn the clock back centuries, it would be fair to say that business ethics were pretty much non-existent. In other words, companies could do what they wanted – there was only one goal, and that was to make as much profit as possible.
Now, things have changed tremendously. This may have partly occurred due to legal reforms, but on the whole the modern day business realizes that increased profits generally correlate with a good reputation. Those companies that are unpopular generally see their profits suffer as a result.
The reasons why companies are now more ethical
Sure, an ethical company is more likely to have loyal employees and other direct benefits.
However, as we’ve already noted, there is a definite link with profitability as well. If the surrounding community is comfortable with the business, they are more likely to not only buy but also be much more receptive to possible expansion which might in other cases involve disagreements.
Elsewhere, if a business is regarded as more ethical by other businesses, it immediately elevates their trust. Others will be more likely to deal with them and ultimately, that link with profitability is enhanced again.
If on the other hand their ethics are obviously at the bottom end of their priorities list, such co-operation suddenly becomes less likely. Doubts start to arise about if they can be trusted, while customers are more likely to turn to firms who do have an ethical approach to how they do business.
Ethics come from the top
Suffice to say, if a business is ethical, this comes from the leader. They are the ones that shape the company and if they don’t preach ethics, neither will any of their employees.
A good example comes in the form of George Bardwil, who is the owner of Bardwil Industries. With around sixty employees it’s of a very good size, and something that Bardwil has preached for a while is ethics.
These ethics aren’t just prevalent in his business though. If you look at his personal life, where he is still on very good terms with wife Lisa Montana, it becomes clear that it’s actions like this which can make an example to the whole of a company.
…they then filter down to employees
Of course, while the leader may have very good ethics, a company still has to ensure that these are carried down to its employees.
As well as improving their overall reputation, another reason why companies are keener than ever before to emphasize ethics is due to decision-making. Studies have found that if an employee takes into account ethics during the decision-making process, they are more likely to come to a conclusion in quicker speeds.
This is again an example of how business ethics can directly affect that bottom line. While being perceived positively is obviously a benefit, few people realize that ethics can impact profitability and it’s one of the reasons so many businesses are now turning to this approach.