By Cindy Phillips Updated February 01, 2019
Striving to earn a reputation as an ethical business is noble, but it requires commitment. Most businesses are financially driven, and it is possible to be both ethical and successful. But there is a fine line between making choices for financial gain and making choices that will not adversely affect others. The ethical business knows the difference.
Strong, Ethical Leadership
The culture of an ethical business is defined starting from the very top of the organizational chart. For a business to be ethical, its leaders must demonstrate ethical practices in any situation. The true test of this leadership is in the decision-making process when there is a choice between what is ethically responsible and what will result in profit or gain.
Leaders who can consciously choose the path that is ethically correct, as opposed to one that is purely financially driven, have successfully created an ethical culture in the business. When the culture is solid at the top of the organization, it trickles down to all areas and employees.
Core Value Statement
An ethical business has a core value statement that describes its mission. Any business can create a value statement, but an ethical business lives by it. It communicates this mission to every employee within the structure and ensures that it is followed. The ethical business will institute a code of conduct that supports its mission. This code of conduct is the guideline for each employee to follow as he carries out the company's mission.
Integrity and Fairness
Integrity is an all-encompassing characteristic of an ethical business. The ethical business adheres to laws and regulations at the local, state and federal levels. It treats its employees fairly, communicating with them honestly and openly. It demonstrates fair dealings with customers and vendors including competitive pricing, timely payments and the highest quality standards in the manufacture of its products.
Respect for Employees and Customers
Ethics and respect go hand in hand. An ethical business demonstrates respect for its employees by valuing opinions and treating each employee as an equal. The business shows respect for its customers by listening to feedback and assessing needs.
An ethical business respects its vendors, paying on time and utilizing fair buying practices. And an ethical business respects its community by being environmentally responsible, showing concern and giving back as it sees fit.
Loyal Relationships with Employees and Customers
Solid relationships are a cornerstone of an ethical business. Loyal relationships are mutually beneficial and both parties reap benefits. Employees who work for a loyal employer want to maintain the relationship and will work harder toward that end.
Vendors and customers will remain loyal to a business that is reliable and dependable in all situations. An ethical business stays loyal to its partnerships even in challenging times. The result is a stronger relationship when emerging from the challenge.
Concern for People and Environment
An ethical business has concern for anyone and anything impacted by the business. This includes customers, employees, vendors and the public. Every decision made by the business is based on the effect it may have on any one of these groups of people, or the environment surrounding it.
FAQs
There are six areas that every company should adhere to when building an ethical business. These are Commitment, Relevance, Positive Value, Influence, Action and Means not Ends. If these are used, then they will uphold the ethical structure of a company.
What are the six 6 elements that define of an ethical leader? ›
These include integrity, respect, trust, fairness, transparency, and honesty. Ethical leadership must be a conscious decision.
What are the characteristics of business ethics? ›
Business ethics is an evolving topic. Generally, there are about 12 ethical principles: honesty, fairness, leadership, integrity, compassion, respect, responsibility, loyalty, law-abiding, transparency, and environmental concerns.
What are six ethical principles identify and describe? ›
Occasionally principles may be in conflict therefore a defensible and carefully considered decision needs to be reached by sound ethical reasoning. The principles are beneficence, non-maleficence, autonomy, justice; truth-telling and promise-keeping.
What are the 7 business ethics? ›
The seven business ethics principles are accountability, care and respect, honesty, healthy competition, loyalty and respect for commitment, information, respect for rule of law.
What are the 6 main ethical guidelines? ›
Q-Chat
- Autonomy. Self determination and right to freedom of choice.
- Nonmaleficence. To do no harm.
- Beneficence. To do good or provide a benefit.
- Justice. Fairness.
- Veracity. To tell the truth.
- Confidentiality. Never revealing any personal information about the patient.
The Characteristics of a Good Leader. A good leader should have integrity, self-awareness, courage, respect, compassion, and resilience. They should be learning agile and flex their influence while communicating the vision, showing gratitude, and collaborating effectively.
What are the main characteristics of business? ›
The main characteristics of business are as follows:
- Economic activity.
- Buying and selling.
- Profit Motive.
- Risk and Uncertainty.
- Continuous process.
- Customer satisfaction.
- Social Activity.
- Creative and Dynamic.
Some examples of business ethics are treating workers fairly, charging fair prices from customers, providing good quality goods and services, earning reasonable profits, using accurate and fair weights of the goods, etc.
What are the characteristics of ethical business managers? ›
The following are the most important characteristics of an ethical leader:
- Leads by Example. An ethical leader doesn't just talk the talk. ...
- Integrity and Accountability. ...
- Empathy. ...
- Driven by Values. ...
- Operates with Fairness. ...
- Aware of Implicit Biases. ...
- Isn't Afraid of Open Communication. ...
- Transparency.
Having identified the lacuna of values and principle-based leadership for business, there are six vital elements that business leaders must possess: Clarity, character, competence, connection, critical thinking and consideration. An organization's vision is only as important as the people who run with it.
What are the 6 C's of leadership? ›
Sometimes called the six key elements of building trust, the 6 C's are the essential skills and attributes that will help you enhance the confidence in your relationships: character, caring, competence, consistency, credibility, and communication.
What are the six elements of ethical decision-making? ›
The ethical decision-making process
- Define. ...
- Identify internal and external factors. ...
- Identify key values. ...
- Identify the audiences that will be affected by your decision. ...
- Select the ethical principles to guide you. ...
- Make the decision and justify.
The six characteristics commonly associated with leadership include confidence, communication, vision, adaptability, accountability, and empathy. Natural talents are often innate abilities that individuals possess, and when reinforced through learning and practice, can become powerful tools for leadership.
