What is business ethics?
Talking about ethics in the business world is essential. It affects not only the image that the company projects to its clients and the general public but also helps attract the best talent, that is, professionals who can really add value to the company.
How can we define the ethics of a company?
When a company enters the market, regardless of its size, it must follow certain notions related to ethics. Years ago, business was associated with efficiency and delivering financial results.
Today, ethics is a big part of it. It’s related to the moral values of a company in the performance of its activities, as well as towards its customers and competitors. These values are the ones that govern ethics as a whole and also relationships in the social environment.
The organization promotes good relations both among its employees and with customers. Everyone’s relationships become clearer and more enjoyable at all levels. Currently, companies consider ethics a primary objective to achieve. Ethics has become as important as results, financial success, innovation, or excellence for organizations.
To make sure a company’s objectives are serious and its administration is transparent, leaders and employees must identify their company’s values and mission. In this way, each organization’s ethics emerge.
The public considered illegal some problems related to certain companies’ dubious attitudes (for example, some manufacturers falsifying automotive test models to improve their performance), which made the market reflect and impose a culture—good behavior. This culture began to focus on ethical behavior to dispel mistrust and skepticism in relation to scandals that affected the image of various companies. Once the organizational and personal values are clear, it is possible to start creating an ethical environment.
How is ethics constituted?
The “code of ethics” is the one that the company follows in the exercise of its daily activity and decision-making that affects the management of its employees and its responsibility to society in general. It basically implies:
- Establish legal operations: A “code of ethics” imposes a series of rules to keep the company within the parameters of the law, thus protecting management, employees and customers. The legal areas include environmental, financial, and labor equality regulations.
- Build trust with consumers: Business ethics is expressed in the creation of positive and trusting relationships between companies and consumers. When companies demonstrate ethical behavior, consumers feel comfortable choosing that company over another.
- Appeal to shareholders: Ethical companies can receive significant financial support from shareholders because investors are likely to want to work with morally sound and law-abiding companies.
- Attract talent: Compassionate companies can attract more talent, as candidates seek companies that they believe will appreciate and value their contributions to the company and act in the best interest of employees. This can improve productivity, attract more committed candidates, and reduce staff turnover.
Why being ethical?
Being a good role model is the best way to achieve ethics, both legal and moral. The people closest to the company will shape the behavior and, at the same time, set an example to the other members of the organization. If the company values honesty above all else, make sure to demonstrate it by being transparent with everyone around. And if the company values freedom of expression, allow team members to communicate their ideas openly.
As an example, Bimbo, a leader in the industrial bakery business, was recently recognized by the Ethisphere Institute with the World’s Most Ethical Companies Award. This institution evaluates companies based on five indicators:
- Compliance with regulations (represents 35% of the evaluation)
- Social responsibility (represents 20% of the evaluation)
- Ethical culture (represents 20% of the evaluation)
- Corporate governance (represents 15% of the evaluation)
- Leadership, innovation, and reputation (represents 10% of the evaluation)
In 2021, more than 200 questions that were asked to companies requesting to enter this ethical classification focused on the context of the Covid-19 pandemic, on health, environmental, social, security, inclusion, and social justice factors. and equity.