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The importance of business ethics should be obvious throughout every area of the business. When a business is known for dealing honestly with all people, from its employees and customers to shareholders and vendors, it is often more likely to become successful. While ethics is a subjective topic that may mean different things to different people, it's still very important in all types of corporate settings.
Business ethics play an important role in hiring and business management practices. The first people hired should be aware of the company's values and ethics practices, so as the company grows and expands, those practices continue to be upheld. When a business is managed well, employees will usually feel that they are being treated fairly; this can help the company to hire and retain excellent employees, which is instrumental to its overall success.
Of course, the importance of business ethics goes beyond the direct relationship between its employees and management team, extending out to how the company deals with the local community and its social responsibility. A business that behaves in an ethical way as a member of the community will often find that the community offers its support in return, which can also be invaluable to the success of the company. This may be done by assisting with community events, donating funds in support of local charities, or simply behaving honestly in dealings with other local businesses.
Business ethics are also important in financial matters. This becomes clear when the business is dealing with people such as vendors and shareholders. A business that does not behave with integrity may have difficult conducting business, as vendors who supply the materials it needs might not be willing to extend credit, while shareholders might no longer be willing to invest their money. While the initial profits might be high, the appearance of ethical problems within the business can make investors uncomfortable risking their money.
Customers who do not feel as if they are being treated fairly by a business will often not hesitate to do something about it. Social networks have made sharing negative information about a company much easier, and customers do not hesitate to do so. It does not take much bad press for sales to decline. This principle works in the opposite direction as well, however: customers who feel as if they are dealt with honestly are more likely to tell their friends to visit the business.
Moldova- Wow what a great story. I agree that ethical business practices are important because it allows customers to trust your company and keep them coming back.
Once a customer has developed a certain level of trust within a company most customers will stay loyal because they appreciate the high level of corporate ethics.
The example of the car dealership is a good one pertaining to ethical business practices. Because they honored their word you will probably never go to another dealership again.
They may have lost a few thousand dollars but they know in the long run their reputation is worth far more than that. They also stand out because the car industry has a strong negative perception among customers but this ethical business will definitely stand out.
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