In business, we tend to obsess over the bottom line. As a result, we focus on strategies and tactics to improve skills, generate more revenue, expand marketing outreach, and boost performance and productivity. While those actions are vital to business success, what’s lacking is a discussion about how optimizing our values and the resulting ethical business practices contributes to success as well. The reality is these verbal and non-verbal cultural principles are important to employees, customers and other stakeholders. That’s because a company’s business ethics can impact brand reputation, public and media perception, employee engagement and marketplace success.

What are Business Ethics?

Investopedia defines business ethics as “the study of appropriate business policies and practices regarding potentially controversial subjects including corporate governance, insider trading, bribery, discrimination, corporate social responsibility, and fiduciary responsibilities. The law often guides business ethics, but at other times business ethics provide a basic guideline that businesses can choose to follow to gain public approval.”

Business ethics are not laws. Instead, they are the thoughts, concepts and shared ideologies that we use to operate our businesses and guide internal and external behavior in order to have transparency and integrity in our dealings with others.

Five Principles of Business Ethics

In addition to ensuring compliance with industry and governmental laws, regulations and rules, business ethics incorporate the values that can make or break a company. The five principles of business ethics are:

1. Instill respect from the top. When leaders communicate and act with respect, it models the behaviors that will trickle down to all levels. Respect, according to Michael Josephson, founder of CHARACTER COUNTS!, is about being treated with dignity. It’s based on the concept of The Golden Rule, “Do unto others as you would have them do unto you.” Other words that represent respect are civility, courtesy, decency, tolerance and acceptance. When leaders have and practice these values, it creates an environment of trust and pride.
2. Maintain transparency. In today’s digital world, we have access to a constant stream of information, resources and news. This means our society is highly informed and values transparency. In fact, 85 percent of consumers will stop purchasing from brands that lack transparency. Keep prospects, clients and employees well informed with honest communications that allow for thorough understanding of company’s mission, products and services. Stay in touch with clients and prospects consistently. Make product, pricing, promotional and contact information easily accessible.
3. Handle conflict and disappointment with empathy. Conflict and disappointment are inevitable in business. How you handle them, however, makes all the difference. The key is to acknowledge and address their existence in a timely manner. Practice empathy whenever possible. Engage in active listening, assess the situation and develop a plan that seeks a win-win resolution. Here’s where thinking outside the box and going the extra step demonstrate your company cares.
4. Foster a culture of collaboration. To create a collaborative culture, lead with the intent of listening, learning from and growing with your team. Maintain open and consistent communication to ensure team members feel heard and understood. In turn, this will encourage teams to contribute to each other and be more innovative and productive in the performance of their daily tasks. Allow traditional methods to be challenged and new ideas to flourish. Encourage staff to learn from each other and work together. Open communication across multiple staff levels facilitates better understanding and produces effective ways to enhance performance and promote loyalty.
5. Kindness. It might seem obvious, but kindness is an essential component of business ethics. In addition to respect, kindness manifests itself in our expression of gratitude, appreciation, recognition, empathy and compassion. In our 7 Habits of Successful Marketers series, we explained the importance of empathetic listening, or listening not only to the person’s words but understanding what a person is feeling from their perspective. When we listen in this way, we put ourselves in others’ shoes and see the world through their eyes. Empathy is a powerful skill that requires continuous practice and attention. Then, by using empathy, we can better practice kindness to those around us to create a symbiotic, productive and pleasant environment.

Beyond the Words

Business ethics are more than a concept used to enhance a company’s image. They are the foundation of any organization’s success. When seeking to understand business ethics, it’s important to understand that they are ultimately the same as personal ethics. Examples include honesty, integrity, trustworthiness, loyalty, fairness, empathy, respect and commitment to excellence. Just like any other skill or initiative, business ethics require constant attention and honing. Take stock of your mission and practices and consider whether they are aligned with your ethical ideologies. When your company’s ethics are clearly defined, communicated and practiced, the entire company benefits.