columnBy Bradwell Mhonderwa
BUSINESS ethics is a management intervention that is being embraced by businesses all over the world to enhance competitiveness.
Workplace ethics is assuming an increasingly strategic and significant role in promoting business growth and pushing up profits.
An emphasis on ethics will see employees developing a mindset that values honesty, integrity and hard work.
In today's business environment companies are employing people with diverse cultural backgrounds, making ethical considerations even more relevant.
Business ethics help companies to focus on the long-term growth and sustainability of the business, and longevity and sustainability in turn enhances shareholder value and customer confidence.
In a recent study by Arthur Andersen and the London Business School, company secretaries and other senior executives of leading UK companies reported that business ethics initiatives had a positive influence on profit, winning new business, productivity and business growth.
A Global Investor Opinion Survey in 2006, in which over 200 institutional investors were interviewed, revealed that investors are willing to pay a premium for companies that demonstrate high ethics and governance standards across the globe.
The importance of business ethics in a firm is thus clearly integral to the reputation, growth and financial well-being of the firm.
Ethical practices in business help to build a brand that attracts customers, making ethics a source of competitive advantage.
In examining the role of ethics in multinational companies, Bowie and Vaaler (1999) noted that the ethical climate of a corporation is knowledge-based and embodied in individual employees or in company routines.
This reinforces the assumption that an ethical climate is intrinsic to a particular company and is difficult to duplicate, making it a source of competitive advantage.
Business ethics assist businesses to become companies of choice for customers, employees, communities, business partners, investors, etc.
Developing an ethics code is one means through which a company can embed business ethics in its operations.
The code enables employees to understand what is expected of them in the workplace in terms of their behaviour.
It provides a device through which employees can communicate to customers and suppliers the expectations of the firm with ease.
An ethics code provides employees with a formal, outside-the-chain-of-command way to communicate upwardly in the company without the threat of being accused of insubordination.
An ethics code covers areas that range from responsibilities to customers and other stakeholders, questions of health and safety in the workplace, relationships with other staff members, etc.
The ethics code is thus a positive document that reminds employees of those enduring values that influence attitudes, actions and the choices and decisions they make every day in their work stations which subsequently create that corporate uniqueness to drive competitiveness.
Ethical business is indeed good business and when it becomes part of your company's fabric and DNA, it really does pay off in the end.
Some of the strategic benefits of actively managing ethics in the workplace are;
Building employee loyalty, hence reducing hiring and training costs.
Reducing theft, fraud and other illegal activities in the firm.
Driving sales up and building customer loyalty.
Creating community goodwill.
Substantial improvement of society through poverty alleviation.
Attracting cheap funding and enhancing investor confidence
Bradwell Mhonderwa is an ethics coach and trainer with the Business Ethics Centre. He can be contacted at firstname.lastname@example.org, or call 0772 913 875