WHY ETHICAL BUSINESS PRACTICES MATTER

Success in business is about more than watching the bottom line. Organizations have extensive policies and procedures in place governing their operations, and following these guidelines can be just as important to achieving growth as producing great products or services. In turn, a sense of responsibility and understanding of ethical behavior are key parts of what makes someone a strong leader. Education has a major role to play, teaching students about the consequences of their actions and the significance of promoting social responsibility within a company. Graduates from online MBA programs should go into their roles with a deep awareness of the impact they can have both within an organization and the larger world. By attending a program that prioritizes ethical business practices, future leaders gain the knowledge and skills they need to make the right choices and build a positive workplace culture. There are numerous advantages to prioritizing business ethics, and they can make the difference in progressing an organization toward its long-term goals:

BUILD A STRONG BRAND

One of the most meaningful outcomes of a socially aware approach is the way it supports the brand as a whole. A business that is transparent about its practices while regularly and actively making an effort to support its community can reap benefits over time. Positive word-of-mouth, cross-channel promotion, and productive relationships can come out of involvement in charity events and other projects. Customers, clients, and partners want to work with a company that is honest, reliable and concerned about its impact on the world. People feel good about being involved with a socially engaged business and confident that they can establish a lasting connection. An ethical organization holds itself accountable, which means it can be relied upon to fulfill its obligations and correct any errors.

MINIMIZE LEGAL ISSUES

Part of ethically running a company is following all applicable laws. The requirements and obligations for a business are often complex, but responsible organizations are constantly aware of any potential for liability and take steps accordingly. Businesses run more smoothly by consulting regularly with experts and scrupulously obeying any legal codes relevant to their finances and operations. By keeping socially conscious behavior at the forefront of all functions, leadership makes it far less likely they will have to contend with serious legal problems down the line. Cutting corners when it comes to complying with regulations, following strict accounting practices or maintaining a safe workplace can save money in the short-term but often leads to far greater costs. Both an organization’s profits and its reputation take a hit when it is found to be operating in violations of the law.

ENHANCE RELATIONSHIPS WITH CUSTOMERS

It’s worth a great deal to customers to feel they are working with a dependable company that is open about its products. In a survey of over 2,000 consumers conducted by Label Insight, 73 percent of respondents expressed willingness to pay more for items that are presented with total transparency. Ethical sales and attentive service are smart investments in the future of an organization. A powerful brand tied to openness and responsibility encourages loyalty, allowing the organization to rely on existing customers instead of constantly spending on marketing to new audiences. Customers don’t like when they feel a business is trying to take advantage of them. On the other hand, they will keep coming back to companies that instead point out ways they can make the right choices for their needs and save money.

MAINTAIN QUALITY WORK ENVIRONMENT

Socially aware businesses create stronger workplaces. Setting a standard for honesty and integrity means an organization attracts employees who are both talented and committed to those values. Workers are more likely to make the right decisions and maintain a high level of productivity when they believe in their organization. Leaders are able to provide a valuable example to employees and form more close-knit teams. In an ethical environment, people are more likely to feel they are treated fairly and that any concerns they express will be taken seriously. That means the organization can focus on working together to achieve its goals. Becoming a leader who models and supports ethical business practices starts with an education based in both the latest strategies and social awareness. Students earning an online MBA from Villanova School of Business have the chance to take coursework in business and gain hands-on experience through Social Enterprise Consulting Practicum, in which they work with an organization dedicated to serving the community. To find out more about Villanova’s commitment to ethical business and learn how you can apply, visit the program page.

Recommended Readings:

Sources:

https://www.forbes.com/sites/steveparrish/2016/02/04/the-profit-potential-in-running-an-ethical-business/#8abf1f876876

http://smallbusiness.chron.com/advantages-ethical-behavior-business-21067.html

https://www.labelinsight.com/Transparency-ROI-Study

http://www.thedrum.com/opinion/2015/03/13/how-charity-partnerships-can-boost-brands-bottom-line