Ethics and morals in business are the standards the organization uses to define what constitutes good and bad behavior by management and employees. Large corporations often put their ethical and moral rules on paper so everyone in the organization understands what is expected of them. In a small business, the owner sets the tone for the ethical and moral behavior of all members of the company. Behaving the way he wants his employees to behave is part of a CEO??s leadership function.
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Doing More than the Minimum:The minimum moral requirement for a business owner is to follow the laws and regulations established by governmental authorities. But businesses that go well beyond those minimums often are rewarded with greater customer loyalty, lower employee turnover and, ultimately, higher profits. An employer may elect to pay more than the minimum wage to lower-level employees, for example. The business owner may exhibit environmental leadership through measures such as reducing energy usage by retrofitting facilities with more energy-efficient lighting or using recycled products in manufacturing processes.
Telling the Truth:To make a sale to a crucial customer, it is tempting for an owner to promise more than the company can deliver. The temporary positive from the revenue generated likely will be offset when the customer becomes aware the company cannot live up to its promises. The customer concludes that he has been deceived and will not do business with the company again. A company owner has an ethical and moral obligation to keep his employees informed about issues that affect their job security. When employees are blindsided by unexpected layoffs, the morale of the entire organization can decline. From the employees?? point of view, they have been lied to.
Corporate conscience, Corporate citizenship, or Corporate Social Responsibility (CSR) are the different names of the same concept in the world of business.
Accepting Blame and Giving Credit:When a mistake is made that has a material effect on the company??s financial results, managers responsible for the error can be tempted to pass the blame along to others, particularly subordinates, rather than facing criticism from the company owner. Managers also may attempt to take credit for their employees?? good ideas. Both of these letdowns in moral standards can make employees less inclined to put forth their maximum effort. They even may elect to look for a new job, concluding that the managers cannot be trusted. Maintaining a higher standard — a manager secure enough to admit she was responsible for a mistake — can gain employees?? trust and also be seen in a favorable light by the company owner.
Serving the Community:Some owners see the business as an integral part of the community in which it operates. Levi Strauss & Co. includes awareness of others?? needs and acting to meet those needs as one of its fundamental ethical concepts. A company of any size can participate in the community through such choices as sponsoring charity events, giving employees time off to support good causes of their choosing or giving away products and services to those in need. There is no regulation on the books that requires such behavior. The company owner makes the choice to exercise this degree of moral and moral leadership.