What is the purpose of your business?

Even if you’re the most hard-nosed, profit-oriented person around, the answer will probably involve
the question of business ethics.
For example, let’s say that you answer:
“My only purpose is to make as much money as possible.”

It’s still true, however, that you can only make that money by serving customers, and that your
company must exist within a broader social framework. You’ll need to decide how you treat those
customers, how you treat your employees, and what contribution your company will make to
the society in which it exists. All of those are ethical questions.

What Is Business Ethics?

“rules, principles, and standards for deciding what is morally right or wrong when doing
business”

Some ethical principles enjoy widespread acceptance. For example, once-common business
practices like slavery and child labour are now universally seen as unethical. These widely accepted
ethical norms are usually also enshrined in law. So the most basic form of business ethics involves
simply following the law.

However, business ethics can also involve much more than this. Remember that the business ethics
definition above also mentioned “deciding what's morally right or wrong when doing business.”It’s an
active process, then, in which company owners and employees struggles with ethical dilemmas in
business and decide which business practices they will and won’t engage in.

For example, if you could get legal permission to dump toxic chemicals in a pristine lake, would you
do it? If you could make extra profit by treating your employees badly, would you do it?

Or let’s say that you run a store. Would you sell any or all of the following?

 products that were tested on animals

 clothes made in factories with poor working conditions

 Some people will answer “Yes, of course” to all of these, some will give a resounding “No”, and
others will answer “Yes” to some and “No” to others. I could extend the list to include dozens of
ethical issues in business, and your list of responses would probably be different from mine
and from those of other readers.
 The point is that where the law is silent, business owners have to come up with their own
business ethics definition of what's right and wrong. Look at your personal values and those of
your business and then, in collaboration with your staff, decide what you believe in and how
you want to act out those beliefs in your business practices.
  1. Trust and Reputation
As billionaire investor Warren Buffett once said:

“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do
things differently.”

Some of the biggest tech firms in the world have been discovering that recently, as privacy and data-
handling revelations have hit customers’ levels of trust.

2. Employee Satisfaction

People want to work for a company that does the right thing.

3. Power of ethical consumption

Overall, the survey found, 62% of consumers used good ethics as “part of their shopping criteria” in
2016, up from 53% in 2010. And ethics were more important to younger respondents, suggesting the
trend is likely to continue.

In other words, the majority of customers will spend more money with you if they perceive that you've
got good ethics, and that effect is getting stronger all the time. That’s a pretty clear bottom-line impact

How to Put Ethics Into Practice in Your Business

Set Up Ethical Guidelines

Protect Whistleblowers

Improve Corporate Governance

Be Environmentally Responsible

Make Social Contributions

Consider Alternative Structures