Why is ethics in business important?

Tawhidul Islam Chanchal

Business ethics is a broad topic, and ensuring ethics in business is one of the hardest tasks. However, for operating a business, it is really important to ensure ethics in every step related to employees and business. It is focused on how businesses ought to behave and how businesses should operate within their scope. Business ethics refers to the application of ethical values in a business environment that deals with human values in relation to their conduct regarding what is good or bad and what is right or wrong. Ethics is the foundation of respect towards others. In business, ethics make sure that profits are made only through the right channels! Business ethics guides company officials to cater to the needs of the employees as well as the community from which they get their resources. Without ethics, most of the products in the market would be ill-conceived.
Now, let’s talk about the importance and benefits of business ethics,
1. Business leaders and workers are characterized by ethical behavior that is socially acceptable. They allow all stakeholders to participate in the decision-making process.
2.    Employees always want to stay longer in a business where the employers value their rights and opinions. To them, their basic needs are satisfied!
3.    A business that promotes ethics in its management and operations creates an investment-friendly environment. Investors like putting their money where they are sure it is safe!
4.    Fewer funds are spent on employee recruitment since most employees are retained in the business.
5.    A large part of ensuring business success is to maintain a good reputation among your customers. That you can achieve.
6.    When your company is reputable, more people will be interested in working for you. Enable the company to attract the most talented employees.
7.    People will work harder at their jobs if they believe that what they are doing is ethical.
8.    Employers and employees put trust on trust one another and work together harmoniously and effectively.
9.    Suppliers are attracted to a company that appreciates what they supply and pays for them promptly.
10.    Good business ethics involves rewarding your employees. When an employee is rewarded, he/she works harder, leading to more profits.
Apart from the mentioned benefits, there are many as follows — Help in building consumer confidence; Enable a company to make good use of limited resources; Allow for healthy competition with companies offering similar services and goods; Help to deliver goods and services of high quality to their customers even in times when the demand is higher than supply; Employees who abide by the business ethics are in a position to respect and protect the business’s assets.
Therefore, having good ethics is an end in itself and something that we can derive satisfaction from in our own right, both inside and outside of business. So, if we want employees, vendors, and consumers to feel satisfied, then running an ethical business is very important.
Now that we know the importance of ethics in business, we need to know the steps to ensure ethics in business.
Here, I am writing about 6 possible key steps that may help a company establish ethics in its business;
Establish an enforceable code of conduct: First of all, the company shall introduce a code of conduct, which should be a set of rules that comply with country and international legislation are applicable. The code of ethics should communicate the company’s philosophy to employees, vendors, customers, clients and the public.
Initial and ongoing training: It is really important to continually train all new and old employees to ensure the proper application of the code of conduct.
Regular communications: Establish a system to observe the existing or amended code of conduct regularly.
Enforcement: To ensure the enforcement of the code of conduct, the company also needs to have a clear statement of action in case of any breach of expected behavior. You also need to assign individuals to your company who are responsible for ensuring the application of the code of conduct.
Rewarding employees: It is really important to reward the employees who are obeying the COC. The culture will encourage the fruitful implementation of COC.
There are a number of standards for global ethical business that differ from industry to industry. Here, I am trying to mention the common criteria: Governance, Customer relations, health & safety, environmental impact, community relations/CSR, Supplier management, Standards for employees — which include working hours, rest/breaks, maternity pay, paternity pay, emergency or other leaves, non-discrimination in terms recruitment, training, promotion, increment, diversity, harassment, complaints & grievances, discipline, privacy, religious tolerance, appraisals, employee consultation, career development, freedom of association, working conditions, insurances, job separation/ end of service benefits.
Considering the above standard, if we discuss Bangladesh, it is certain that Bangladesh has introduced some legislation, but most of it is related to labor affairs in particular sectors. But in general, it is not applicable for all kinds of sectors or their employee i.e. people working in corporate houses or in any local, multinational or international organizations.

A lot of local and multinational companies operate their business according to their policies, and they are not the same! So, it is difficult to summarise the country’s business ethics in a single format. It is true that the policy procedures are created by an organisation considering its scopes, but is it necessary that all policies should have the same statement in terms of employee rights? If yes, then where are the guidelines? Apart from the specific legislation, is there any ethical business standard in common to ensure employee rights are equally addressed? If yes, is there any system to ensure accountability? What is our stand for good governance, customer relations, employee standards, environmental impact, and community relations/CSR? Are we transparent in all of these fields? (Exceptions can’t be examples of existence)
Therefore, now it is time to create a National Ethical Standard/guideline for business that should not be limited to industry, job title or anything else. We are doing great, but if we want to establish our reputation in global trade, we may need a standard guideline for ethical trade in common.

(this article has been published by Daily Observer on 22 March 2018)

The author is an ethical specialist, HR trainer and consultant.