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LESSON 4A – STRATEGIC MANAGEMENT (START OF MID-
TERM)
GOALS AND OBJECTIVES OF COMPANY
A business goal is an endpoint, accomplishment or
target an organization wants to achieve in the short term or long
term. Business goals can take many different forms and be
aspirational or motivational, such as driving an organization
toward a certain objective like improved customer service. They
can also have very specific objectives, such as reaching a
particular revenue target, net income, profit margin, profit goal
or other financial milestone.
A mission statement is often seen as the definition of an
organization's purpose and reason to exist, which is a form of a
business goal. A vision statement is another common way for
an organization to articulate its goals by providing an outlook on
where it wants to go.
Why are business goals important?
Business goals are important for numerous reasons that
can affect the overall operations and success of an
organization.
1. Business goals help measure progress. Business
goals provide the milestones that can help an
organization measure its success or lack thereof.
2. Business goals set the direction of a
company. Business goals allow all employees to have
a clear idea of where the company wants to go and what
it wants to be.
3. Business goals establish accountability. Business
goals enable management to take ownership of its
successes or failures.
4. Business goals improve decision-making. Business
goals align the activities of the business so management
can constantly evaluate decisions to ensure the
business moves toward its target.
Business goals vs. business objectives
Business goals and business objectives are closely related,
and the terms are sometimes used interchangeably. However,
they are two different things.
Business goals represent the direction in which a company
intends to go and define what the organization wants to achieve.
A business objective specifies the methods and paths that can
help a business achieve that goal.
For example, a business goal could be to reach a specific
revenue target, while a business objective could be to close a
deal with a large client to help the company achieve that
financial goal.
What are the elements of a business goal?
A business goal comprises multiple components to be
effective. At the most basic level, all business goals define what
an organization wants to achieve within a given time frame. The
acronym SMART is commonly used to help ensure that the right
elements are present in a business goal.
Specific. The business goal should be identified.
Measurable. There should be some metric -- such as a
percentage -- to measure progress.

Achievable. There should be some expectation that the
goal is achievable, even if it is a difficult task.
Realistic. A goal should be realistic to the company's
operations and align with its business plan.
Time-bound. The goal should be achieved in a certain
amount of time.
Different types of business goals and examples
There are a variety of business goals an organization
can define.
Financial goals. These goals are often specific financial targets
a company wants to achieve to increase revenue or profitability.
A business aiming for an initial public offering is a good example
of a financial goal.
• Growth goals. This type of goal aims to expand or grow
part of the business by a certain percentage. For
example, the growth could be in terms of new products,
customers or locations. Another example would be
planning to expand operations to multiple countries.
• Employee goals. Helping employees to achieve their
own objectives in terms of career advancement, life-
work balance or career advancement is an important
category of business goals. This is especially true in
the era of the Great Resignation where employees are
looking for fulfilment.
• Process goals. Every organization has its own
processes for various activities. Setting goals to improve
those processes and workflows can help to optimize
business efficiency. For example, increasing the number
of software releases with improved DevOps processes
would be a process goal.
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• Social goals. Social goals, such as promoting diversity
or setting sustainability targets for environmental
concerns, are an increasingly strategic and important
category in the goal-setting process. Cutting
greenhouse gas emissions by a certain percentage or
reducing the organization's carbon footprint would fit in
this category.
• Time-based goals. Time should be an attribute of each
of the goals outlined above. Time-based goals include
short-term, as well as long-term goals and objectives.
Short-term goals can be completed in days, weeks or a
few months, while long-term goals have a completion
date of many months to years.
How to set short-term and long-term business goals
Goals can be set arbitrarily by management, though it's
not the ideal approach. The most successful goals are the result
of a process that engages key stakeholders in an organization,
including executive management, staff and advisors.
A common approach to help set both short-term and
long-term goals is to use the Objectives and Key Results
(OKRs) framework. OKRs enable a business to outline its
objectives and the results it wants to achieve. By setting a series
of OKRs, an organization can define its business goals in a
measurable way. The goal-setting process can also benefit from
the SMART framework approach.

While business goals set the direction for the company,
it is equally important to track each goal to help ensure
progress. One way to do this is to use key performance
indicators (KPIs) that analyze factors crucial to measuring
progress for each goal.
Challenges of developing business goals
Developing business goals can be a complex and
challenging process for the following reasons.
• Management direction. Management might not be
unified in its vision for the company, so getting all
relevant stakeholders to buy into a given goal can be a
challenge.
• Changing market conditions. Market conditions
can change without warning, which can introduce
significant complexity into the goal-making process.
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• Competition. No business works in a vacuum and
competitive pressure from rival organizations can
introduce challenges into the development of business
goals.
What is a business objective?
Whether you work at a small business, a start-up, or as
a team lead at a larger enterprise, as a key business owner,
you’re responsible for identifying the business objectives that
will help your organization hit its long-term goals. Setting goals
and strategic objectives is the best way to know where you’re
going and how to get there.
Business objectives are the results you are aiming to
achieve in order to accomplish your longer-term company
vision. Think of business objectives as metrics to measure your
overall business success.
Hitting your business objectives means you’re on the
path towards achieving larger company goals. As such,
business objectives should focus on large-scale organizational
impact. Good business objectives are measurable, specific, and
time-bound.
22 types of business objectives
Set business objectives based on factors that measure
and impact your organization’s success. For example, you
might set the following business objectives:
Financial business objectives
1. Profitability: A profitability-focused business objective is
important if your company is relying on outside
investors. Achieving—and maintaining—profitability

ensures your long-term success so you can make
progress towards your overall company mission.
2. Revenue: Revenue-focused business objectives help
you balance your income with your costs in order to stay
in business. You might set business objectives to
achieve a certain annual revenue goal, or to increase
revenue by a certain percentage over a period of time.
3. Costs: Costs refer to how much money you’re spending
on your business. Reducing costs can help you increase
revenue and achieve profitability. Business objectives
related to cost can help you control production or
operations cost to improve your business’s financial
performance.
4. Cash flow: Cash flow refers to the money moving into
and out of your business. Cash flow can be positive—
when you’re making more than you’re spending—or
negative—when you’re spending more than you’re
making. Similar to profitability, a cash flow-oriented
business objective can help set you up for long term
financial success.
5. Sustainable growth: In order to grow as a business, you
need to grow sustainably. Setting business objectives
around sustainable growth can help you plan your
financial projections, employee costs, and other
financial considerations.
Customer-centric business objective
6. Competitive positioning: A big element of your business
strategy is thinking about how your product or service
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compares to others in the same market. By setting a
business objective focused on competitive positioning,
you can ensure your product or service reaches parity
with what’s expected in the market, or use competitive
positioning to outdo your competitors in a key area.
7. Market share: This business objective refers to how
much market share your company’s product or service
takes up. The larger the market share, the more reach
your business has. Setting this type of business
objective is helpful if you’re trying to grow your presence
in the market. You can do this through social media
initiatives, concerted advertising campaigns, or brand
tracking and performance.
8. Customer satisfaction: In order to succeed as a
business, you need happy customers. Focusing on a
customer satisfaction-based business objective can
help you better serve your customers. Depending on the
business objective, this might focus on a customer
advocacy program, a better help desk, or something
similarly customer-facing.
9. Brand awareness: Your brand is what makes your
organization stand out from the crowd. Brand
awareness is an important way to understand how your
customers think of your brand, and how aware they are
of your distinct brand vs. your competitors.
Understanding—and increasing—brand awareness is a
key part of your long-term marketing strategy.
10. Sales: You’ll often find business objectives related to
improving or refining the sales cycle. This could include
anything from reducing customer acquisition cost

(CAC), developing better lead tracking, increasing
cross-selling, or something else.
11. Churn: In business, your churn rate refers to how many
customers you lose over a set period of time. Reducing
churn is a great way to increase your revenue and
ensure your customers are satisfied with the product or
service you provide.
Internal business objectives
12. Employee satisfaction and engagement: Part of your
business is you’re your employees feel about working
there, too. Increasing employee satisfaction and
engagement leads to happier employees, reduced
burnout, and more effective teams.
13. Employee retention: A key internal business objective is
how long your employees spend at your company.
Increasing tenure and reducing turnover can help you
achieve more complex projects with knowledgeable
employees.
14. Company growth: In order to grow your business, you
also need to grow the number of people you employ.
Growing your company sustainably can be difficult—
which is why businesses often set company growth as a
key business objective.
15. Organizational culture: Organizational culture is the
ideals, values, and group norms that shape how team
members interact within your company. Good culture
drives employee engagement and increases retention,
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which is one of the key reasons so many companies set
organizational culture-focused business objectives.
16. Change management: Smoothly implement large-scale
organizational change with change management.
Though you typically won’t see organizations set this
type of business objective year after year, it can be a
helpful objective to set if you have large changes on the
horizon.
17. Productivity: At Asana, we don’t think of productivity as
“doing the most you can,” but rather as a way to optimize
your time and get your best work done. Increasing
employee productivity can help your teams achieve their
high-impact work more efficiently.
18. Employee effectiveness: Teams don’t just need to be
efficient—they also need to know the right things to work
on. The best companies aim for efficiency and
effectiveness—which is where an effectiveness-based
business objective comes into play. To learn more, read
our article about the difference between efficiency and
effectiveness.
19. Diversity and inclusion: A big part of a welcoming
company culture is making sure your employees feel like
they belong. Investing in diversity and inclusion
programs can help your business be more welcoming to
your current and potential employees.
Regulation-related business objectives
20. Quality control: Implementing quality control measures
as a business objective can help you ensure your
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product or services are at the level you want them to be.

This in turn leads to better customer relationships and 3. Vision statement: Set an organization-wide North Star.
overall increase in revenue.
4. Big Hairy Audacious Goals (BHAGs): Set
21. Compliance: If your business has any compliance needs organization-sized stretch goals.
to meet in the near future, setting those compliance
requirements as a business objective will ensure you hit 5. Company values: Align your team around core
your targets on time. principles.

6. Strategic plan: Clarify your three- to five-year company

22. Sustainability or waste reduction: Some businesses set goals during the strategic planning process.
business objectives to reduce waste or increase
sustainability. While this may not directly impact your 7. Strategic goal: Set the goals you want to achieve by the
business, proving that you’re environmentally minded end of your strategic plan.
can help you reach specific audiences you’re targeting.
8. Critical success factors: Clarify the high-level goals
you need to achieve in order to achieve your strategic
Which goal framework is right for you?
goals.
Figuring out exactly what type of goal you need to set
9. Strategic management: Execute against your strategic
can be tricky. Each goal framework is slightly different—and
plan in order to achieve your company goals.
implementing the right one can help you achieve success.
10. Business goals: Set predetermined targets to achieve in
The type of goal you set will depend on the business
a set period of time.
activities you’re running and the specific goals you have. If your
goals have a set time frame, you may want to go with short-term
11. Objectives and key results (OKRs): Set and
objectives, whereas larger goals have their own unique
communicate annual company goals.
frameworks.
If you’re not sure where to start, check out these 15 goal
12. Key performance indicators (KPIs): Set quantitative
frameworks for different situations:
goals.
1. Business objectives: Set goals based on operating
13. Project objectives: Share what you want to achieve by
factors that impact your company’s long-term success.
the end of a project.
2. Business plan: Also called a business strategy plan.
14. Project deliverables: Identify a project’s output.
Document your business’ goals and plan out how you’ll
get there.

15. Project milestones: Mark specific checkpoints along a
project’s timeline.
How Team Morale Affects Employee Performance
When you're building a team, you're looking for team
members with the right skills to help your organization achieve
its objectives. Part of helping your team achieve their full
potential is making sure they’re supported and engaged at work.
This is where team morale comes in. As your team grows, how
do you create—and maintain—high team morale and job
satisfaction across all of your team members?
Building and sustaining employee morale starts with
your company culture. A clear company culture can help guide
morale when things go wrong.
What is employee morale?
Team or employee morale is the overall outlook that
employees have towards their organization or business. In this
context, morale can be described as the confidence that a
person or group has in your organization or business.
Good morale means that your employee satisfaction is high—
people are generally engaged at work. When you start to see
low employee morale, that means your employees are
discontent. Look to see if anybody is experiencing burnout or is
feeling disengaged with their work. While these are very general
examples, there are many aspects that can affect employee
morale.
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3 ways to boost employee morale
Encouraging and maintaining morale starts with team
leadership. As a team leader, there are a variety of things you
can do to foster and maintain employee satisfaction, including:
1. Lead by example.
Human beings are social creatures, and by nature,
we look to those in leadership positions for cues on how
to act. While everyone has their own unique way of
leading, here are a few ways you can lead by
example to create strong team morale:
• Get involved in your team’s work. By being
involved with your team, you're showing them
that you not only trust them with their work, but
that you’re engaged with their work. Engaged
leaders better understand the work that their
team does. Then, demonstrate your support by
reinforcing how their individual work connects to
broader business goals.
• When in doubt, lead with empathy. Good leaders
show employees that they care about them—not
just as an employee but also as a person.
Empathetic leaders give credit where credit is
due, allow for flexibility when it's needed, and
check in with team members regularly to see
how they're feeling.
• Lean into transparency. Regularly share
information regarding company changes,
challenges that your team is having, or even
what's happening in your own life. Showing your
team that you're also human creates a safe

space for them to share their candid feelings as
well.
• Ask for feedback. A good leader creates
opportunities for open feedback and takes that
feedback to heart. Whether you do this in a 1:1,
as a group, or anonymously, soliciting feedback
can help your employees feel heard. That way,
employees are less likely to discuss grievances
with other coworkers in a way that can affect
morale.
2. Build trust within your team
When you build trust with your team, you’re
sharing the responsibility so that everyone is
empowered to do their jobs effectively and
autonomously. You can do this by giving them the
freedom to make decisions and encouraging them to
grow their skillsets. When you trust your employees to
make good decisions, they’ll feel more confident that
their voice and opinion matter. This benefits the entire
team because every team member can share their
individual strengths and perspectives and put them to
use in a meaningful way.
When your team is working hard, remember to
give your employees the appreciation they deserve.
Identify team members who are making an impact and
recognize them for the specific work they have
contributed. A blanket statement doesn’t do much for
employee morale, but highlighting specific contributions
shows that you care about their work and their impact
on the company.
Examples of meaningful employee recognition:
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“Thank you for making time to accommodate that
last-minute meeting. I know you have a busy schedule
so I appreciate your flexibility.”
“The extra slide that you added to the
presentation brought a lot of value. Thank you for
sharing your expertise.”
“Thank you for your patience handling that
difficult customer. The patience you showcased is a
fantastic example of what our team members should
strive for.”
3. Help employees thrive outside of work
Your team’s overall well-being is just as
important to their morale as workload and resources.
When you’re committed to helping your employees live
a healthy and satisfying life outside of work, they’re more
likely to be engaged at work, creating a positive work
environment for other team members.
Work-life balance is a key part to your team’s
wellbeing. If someone is juggling several deadlines, sick
kids, and also trying to maintain a clear head for work
the next day, that’s a recipe for burnout. According to
the Anatomy of Work survey, 71% of survey
respondents reported feeling burnout at least once in
2020.
Enable your team to thrive by encouraging a
healthy work-life balance. Offer regular breaks—
extended time off—and not just daily lunch breaks.
Encouraging employees to take time off not only helps
employee productivity, but can also increase morale.

Employees are also more likely to have higher
job satisfaction if they have access to benefits that
enable them to thrive outside of the workplace. Benefits
like child care, parental leave, transportation, and
healthcare can all contribute to employee engagement.
These are all things outside of work that can affect
someone's daily life, and when robust benefits are
available, employees can focus on doing their jobs well
instead of worrying about their responsibilities outside of
work. While employee benefits are handled by a small
section of employees, team leads can use their voice to
advocate for the benefits that their team needs to thrive.
Factors that decrease team morale
Employee morale is an important aspect of company
culture that needs consistent attention and care. When you
aren’t intentional about creating a strong team culture, morale
can decrease. Here are a few facts that contribute to low team
morale:
Stressful company culture
Many things can contribute to a stressful company
culture. Frequent operational changes and high turnover rate
are all things that can create high stress for employees.
Frequent changes in an organization can cause stress
on employees by making them feel unstable. If a company can't
decide how to organize their team members or establish
standard processes, this makes it difficult for employees to do
their work effectively. For example, a team may have a manager
set a specific process, and then within a few months a new
manager may join and set an entirely different process. Having
to switch processes in a short amount of time can cause
confusion and thrash.
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A high turnover rate can also cause stress to your team.
Having to continually train new hires can create more work for
team members. In addition to hiring, it will take time for new
employees to fully ramp up. When employee turnover is high,
your team doesn’t have the opportunity to focus on the work
they were hired to do, but are more focused on getting new team
members onboarded. If team members are constantly being
cycled in and out, the work that helps companies meet their
goals will take longer to complete.
If team leads start seeing an increase in turnover rate,
it’s necessary to start implementing strategies to prevent a dip
in morale. Establishing strong team dynamics and cross-
training team members to ensure that there’s proper coverage
if another team member is out can help your team stay afloat—
regardless of what’s happening at the company level.
Unstable leadership
Leadership plays a big part in company culture and
employee morale. If there are frequent changes in leadership,
employees don't have enough time to establish a relationship
with their manager. It’s important to take time to build a one-on-
one relationship with your reports. Your employees need to
know that they have an advocate on their side. Managers also
have the responsibility of being a connection to broader
company goals and outlook. If that is constantly changing,
employees might not get the information they need or feel
connected to the broader purpose of their work.
Similar to the lack of clarity on goals, a lack of
transparency on the performance of a company as a whole can
quickly lower employee morale. If employees are seeing high
employee turnover, emergency meetings, and constant shifts in
leadership, those are sure fire signs that something is not going

right. And when leaders don’t address real challenges with
authenticity and transparency, employees can lose faith in
leadership and experience lower morale.
Clear communication from leadership to employees can
combat these stressors. If leadership is providing clarity to
employees about their roles, responsibilities, and processes,
they’ll know exactly what to do to meet those goals. With more
clarity, team members can work on the things that contribute
directly to company goals.
Maintaining employee morale with remote work
Employee morale can change at any moment—and
some of the reasons for that change may not be work-related at
all. Let's take the COVID-19 pandemic for example. Many
people had to drastically change their day-to-day work routines
to shift—overnight—to remote work.
The pandemic was a major external stressor that
companies had very little control over. This change drastically
shifted how many companies operated. To help their newly
remote teams maintain morale, many companies adapted to the
stressful circumstance of the pandemic by offering additional
benefits and support. At Asana, we implemented global
company holidays and mental health support to maintain a
strong team morale and support team members as they
learned how to work from home.
Why should you care about employee morale?
Building team morale and company culture is an
important step to establishing long-term employee satisfaction.
But why is it so important to ensure that your company
maintains high employee morale? Here are a few reasons:
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Higher morale means happier employees. When employees
are happy and have good work-life balance, they're more likely
to produce higher quality work. Employees who experience less
stress are more focused, creative and open to changes and new
ideas.
Less stressed employees also mean healthier
employees. According to the Mayo Clinic, individuals who are
chronically stressed can have an increased risk of health
problems, such as digestive issues, muscle tension,
headaches, high blood pressure, and mental health problems.
When people are less stressed, these health problems are less
likely to occur. Employee wellness, both physical and mental,
can lead to higher productivity and less absenteeism due to
health problems.
Higher morale means increased employee retention. When
employees are happy and engaged and have a positive outlook
on their company, they’re less likely to search for a new job. Not
only that, happy employees are the best recruiters for new
talent. Engaged employees are more likely to refer people to an
open position and speak positively about the company.
BUSINESS ETHICS- Definition, Principles, Types, and Importance
Definition of Business Ethics
Business ethics is a form of applied ethics or professional ethics, that
examines ethical principles and moral or ethical problems that can arise in a
business environment. It applies to all aspects of business conduct and is
relevant to the conduct of individuals and entire organizations.
Business ethics refers to carrying business as per self-
acknowledged moral standards. It is actually a structure of moral principles
and code of conduct applicable to a business. Business ethics are applicable
not only to the manner the business relates to a customer but also to the

society at large. It is the worth of right and wrong things from business point
of view.
Business ethics not only talk about the code of conduct at workplace
but also with the clients and associates. Companies which present factual
information, respect everyone and thoroughly adhere to the rules and
regulations are renowned for high ethical standards. Business ethics implies
conducting business in a manner beneficial to the societal as well as business
interests.
Every strategic decision has a moral consequence. The main aim of
business ethics is to provide people with the means for dealing with the moral
complications. Ethical decisions in a business have implications such as
satisfied work force, high sales, low regulation cost, more customers and high
goodwill.
Some of the ethical issues for business are relation of employees
and employers, interaction between organization and customers, interaction
between organization and shareholders, work environment, environmental
issues, bribes, employees’ rights protection, product safety, etc.
Understanding Business Ethics
Business ethics ensure that a certain basic level of trust exists
between consumers and various forms of market participants with
businesses. For example, a portfolio manager must give the same
consideration to the portfolios of family members and small individual
investors as they do to wealthier clients. These kinds of practices ensure the
public receives fair treatment.
The concept of business ethics began in the 1960s as corporations
became more aware of a rising consumer-based society that showed
concerns regarding the environment, social causes, and corporate
responsibility. The increased focus on "social issues" was a hallmark of the
decade. A social issue is a problem that affects many people within a society.
It is a group of common problems in present-day society and ones that many
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people strive to solve. It is often the consequence of factors extending beyond
an individual's control.
Today’s social issues might include:
1. animal experimentation - An animal test is any scientific experiment or
test in which a live animal is forced to undergo something that is likely to cause
them pain, suffering, distress or lasting harm.
2. child bullying - is unwanted, aggressive behavior among school aged
children that involves a real or perceived power imbalance.
3. depression - is a common mental disorder. It involves a depressed mood
or loss of pleasure or interest in activities for long periods of time.
4. global warming - is the long-term heating of Earth's surface observed
since the pre-industrial period (between 1850 and 1900) due to human
activities, primarily fossil fuel burning, which increases heat-trapping
greenhouse gas levels in Earth's atmosphere.
5. child abuse - It is any form of maltreatment by an adult, which is violent or
threatening for the child. This includes neglect. When child abuse occurs in
the home and the abuser is, for example, the child's parent or care-giver, this
is a form of domestic violence .
6. civil rights - are an essential component of democracy.
They're guarantees of equal social opportunities and protection under the law,
regardless of race, religion, or other characteristics. Examples are the rights
to vote, to a fair trial, to government services, and to a public education.
7. criminal justice - is the delivery of justice to those who have been accused
of committing crimes. The criminal justice system is a series of government
agencies and institutions. Goals include the rehabilitation of offenders,
preventing other crimes, and moral support for victims.

8. disability rights - People with disabilities have the right to access all
aspects of society on an equal basis with others including the physical
environment, transportation, information and communications, and other
facilities and services provided to the public.
9. domestic violence - is any behavior the purpose of which is to gain power
and control over a spouse, partner, girl/boyfriend or initmate family member.
10. hate crime - a crime, typically one involving violence, that is motivated
by prejudice on the basis of ethnicity, religion, sexual orientation, or similar
grounds.
11. health care - refers to efforts made to maintain, restore, or promote
someone's physical, mental, or emotional well-being especially when
performed by trained and licensed professionals.
12. homelessness - is the condition of lacking stble, safe, and functional
housing. An example of which is living on the streets, also known as sleeping
rough.
13. migration- The movement of a person or people from one country,
locality, place of residence, etc., to settle in another.
14. mental illness - is a condition that affects a person's thinking, feeling,
behavior or mood. These conditions deeply impact day-to-day living and may
also affect the ability to relate to others.
Since that time, the concept of business ethics has evolved.
Business ethics goes beyond just a moral code of right and wrong; it attempts
to reconcile what companies must do legally vs. maintaining a competitive
advantage over other businesses. Firms display business ethics in several
ways.
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Principles of Business Ethics
Business ethics studies appropriate business policies and practices
regarding potentially controversial subjects, including corporate governance,
insider trading, bribery, discrimination, corporate social responsibility,
fiduciary responsibilities involving trust between a trustee and beneficiary,
and much more. The law often guides business ethics, but at other times
business ethics provide a basic guideline that businesses can follow to gain
public approval.
It's essential to understand the underlying principles that drive
desired ethical behavior and how a lack of these moral principles contributes
to the downfall of many otherwise intelligent, talented people, and the
businesses they represent.
There are generally 12 business ethics principles. They are as follows:
• Leadership: The conscious effort to adopt, integrate, and emulate
the other 11 principles to guide decisions and behavior in all aspects
of professional and personal life.
• Accountability: Holding yourself and others responsible for their
actions. Commitment to following ethical practices and ensuring
others follow ethics guidelines.
• Integrity: Incorporates other principles—honesty, trustworthiness,
and reliability. Someone with integrity consistently does the right
thing and strives to hold themselves to a higher standard.
• Respect for others: To foster ethical behavior and environments in
the workplace, respecting others is a critical component. Everyone
deserves dignity, privacy, equality, opportunity, compassion, and
empathy.
• Honesty: Truth in all matters is key to fostering an ethical climate.
Partial truths, omissions, and under or overstating don't help a
business improve its performance. Bad news should be
communicated and received in the same manner as good news so
that solutions can be developed.

• Respect for laws: Ethical leadership should include enforcing all
local, state, and federal laws. If there is a legal grey area, leaders
should err on the side of legality rather than exploiting a gap.
• Responsibility: Promote ownership within an organization, allow
employees to be responsible for their work, and be accountable for
yours.
• Transparency: Stakeholders are people with an interest in a
business, such as shareholders, employees, the community a firm
operates in, and the family members of the employees. Without
divulging trade secrets, companies should ensure information about
their financials, price changes, hiring and firing practices, wages
and salaries, and promotions are available to those interested in the
business's success.
• Compassion: Employees, the community surrounding a business,
business partners, and customers should all be treated with concern
for their well-being.
• Fairness: Everyone should have the same opportunities and be
treated the same. If a practice or behavior would make you feel
uncomfortable or place personal or corporate benefit in front of
equality, common courtesy, and respect, it is likely not fair.
• Loyalty: Leadership should demonstrate confidentially and
commitment to their employees and the company. Inspiring loyalty
in employees and management ensures that they are committed to
best practices.
• Environmental concern: In a world where resources are limited,
ecosystems have been damaged by past practices, and the climate
is changing, it is of utmost importance to be aware of and concerned
about the environmental impacts a business has. All employees
should be encouraged to discover and report solutions for practices
that can add to damages already done.
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Below is a list of other significant ethical principles to be followed for
a successful business:
1. Protect the basic rights of the employees/workers. - According to
DOLE: Normal working hours of eight (8) hours a day, meal and rest
period; meal break of less than one hour and short rest periods shall
be considered compensable working time; workers must be paid
their wages for all hours worked.
2. Follow health, safety, and environmental standards.
3. Continuously improvise the products, operations, and production
facilities to optimize or to make the best or most effective resource
consumption and use.
4. Do not replicate the packaging style so as to mislead the consumers.
We have what we call packaging copyright which is a specialty that
combines the kind of sales copywriting experience you get writing
direct marketing along with branding experience and point-of-
purchase awareness. It is considered an act of plagiarism if you copy
the packaging of other products.
5. Indulge in truthful and reliable advertising.
6. Strictly adhere to the product safety standards. They are intended to
help prevent and reduce the chance of accidents and injuries from
using any of these products.
7. Accept new ideas. Encourage feedback from both employees as well
as customers.
8. Present factual information. Maintain accurate and true business
records.
9. Treat everyone (employees, partners, and customers) with respect
and integrity.
10. The mission and vision of the company should be very clear to it.
11. Do not get engaged in business relationships that lead to conflicts of
interest. Discourage black marketing, corruption, and hoarding.

12. Meet all the commitments and obligations timely.
13. Encourage free and open competition. Do not ruin competitors’
image by fraudulent practices.
14. The policies and procedures of the company should be updated
regularly.
15. Maintain confidentiality of personal data and proprietary records held
by the company.
16. Do not accept child labor, forced labor or any other human right
abuses.
Types of Business Ethics
There are several theories regarding business ethics, and many
different types can be found, but what makes a business stand out are
its corporate social responsibility practices, transparency and
trustworthiness, fairness, and technological practices.
Corporate Social Responsibility
Corporate social responsibility (CSR) is the concept of meeting the
needs of stakeholders while accounting for the impact meeting those needs
has on employees, the environment, society, and the community in which the
business operates. Of course, finances and profits are important, but they
should be secondary to the welfare of society, customers, and employees—
because studies have concluded that corporate governance and ethical
practices increase financial performance.
Transparency and Trustworthiness
It's essential for companies to ensure they are reporting
their financial performance in a way that is transparent. This not only applies
to required financial reports but all reports in general. For example, many
corporations publish annual reports to their shareholders.
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Most of these reports outline not only the submitted reports to
regulators, but how and why decisions were made, if goals were met, and
factors that influenced performance. CEOs write summaries of the
company's annual performance and give their outlooks.
Press releases are another way companies can be transparent.
Events important to investors and customers should be published, regardless
of whether it is good or bad news.
Technological Practices and Ethics
The growing use of technology of all forms in business operations
inherently comes with a need for a business to ensure the technology and
information it gathers is being used ethically. Additionally, it should ensure
that the technology is secured to the utmost of its ability, especially as many
businesses store customer information and collect data that those with
nefarious intentions can use.
Fairness
A workplace should be inclusive, diverse, and fair for all employees
regardless of race, religion, beliefs, age, or identity. A fair work environment
is where everyone can grow, be promoted, and become successful in their
own way.
Importance of Business Ethics
There are several reasons business ethics are essential for
success in modern business. Most importantly, defined ethics programs
establish a code of conduct that drives employee behavior—from executives
to middle management to the newest and youngest employees. When all
employees make ethical decisions, the company establishes a reputation for
ethical behavior. Its reputation grows, and it begins to experience the benefits
a moral establishment reaps:
• Brand recognition and growth

• Increased ability to negotiate
• Increased trust in products and services
• Customer retention and growth
• Attracts talent
• Attracts investors
When combined, all these factors affect a business' revenues.
Those that fail set ethical standards and enforce them are doomed to
eventually find themselves alongside Enron, Arthur Andersen, Wells Fargo,
Lehman Brothers, Bernie Maddoff, and many others.
Top officials at Enron abused their power and privileges,
manipulated information, engaged in inconsistent treatment of internal and
external constituencies, put their own interests above those of their
employees and the public, and failed to exercise proper oversight or shoulder
responsibility for ethical failings.
Arthur Andersen was an American accounting firm based in Chicago
that provided auditing, tax advising, consulting, and other professional
services to large corporations. By 2001, it had become one of the world's
largest multinational corporations and was one of the "Big Five" accounting
firms. Andersen was convicted of obstruction of justice for shredding
documents related to its audit of Enron, resulting in what infamously became
known as the Enron scandal.
The Wells Fargo Bank fake accounts scandal first came to light in
2016, when it was revealed that the bank had been creating fake accounts in
the names of its customers without their knowledge or consent. The fake
accounts were created by bank employees who were under pressure to meet
unrealistic sales targets.
Lehman Brothers misused an accounting trick called Repo 105 to
temporarily remove $50 billion from its ledgers to make it look as though it
was reducing its dependency on borrowed money and was drawing down its
debt. Lehman never told investors or regulators about it. Repo 105 was a type
of loophole in accounting for repurchase (repo) transactions that the now-
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extinguished Lehman Brothers exploited in an attempt to hide true amounts
of leverage during its times of trouble during the 2007-2008 financial crisis.
In this repurchase agreement, since updated to close the loophole, a
company could classify a short-term loan as a sale and subsequently use the
cash proceeds from the "sale" to reduce its liabilities.
Bernard Lawrence "Bernie" Madoff was an American financier who
executed the largest Ponzi scheme in history, defrauding thousands of
investors out of tens of billions of dollars over the course of at least 17 years,
possibly longer. He was also a pioneer in electronic trading and chair of the
Nasdaq in the early 1990s. He died in prison at age 82 on April 14, 2021,
while serving a 150-year sentence for money laundering, securities fraud,
and several other felonies. A Ponzi scheme is an investment fraud that pays
existing investors with funds collected from new investors. Ponzi scheme
organizers often promise to invest your money and generate high returns with
little or no risk. But in many Ponzi schemes, the fraudsters do not invest the
money. Instead, they use it to pay those who invested earlier and may keep
some for themselves.
What Is a Pyramid Scheme? How Does It Work?
A pyramid scheme is a fraudulent and unsustainable investment
pitch that relies on promising unrealistic returns from imaginary investments.
The early investors actually get paid those big returns, which leads them to
recommend the scheme to others. Investors' returns are paid out of the new
money flowing in. Eventually, no new investors can be found and the pyramid
collapses.
In a variation of the pyramid scheme, investors at each level charge
initiation fees that are paid by the next layer of investors. A portion of those
fees is paid on to those in the top layers of the pyramid. Eventually, no one
is left to recruit. The pyramid collapses.

How Pyramid Schemes Work
Pyramid schemes are so named because their compensation
structures resemble a pyramid. The scheme starts with a single point on top
where the original members exist and becomes progressively wider toward
the bottom as people are recruited by every level of recruits.
Say that the scheme's founder Mike sits alone at the top of the
pyramid. He recruits 10 people with some promise of a big return on their
money. They're represented by the level directly below him on the pyramid.
Each of those new, 10 members, or participants, pays Mike a
certain fee to take part in the opportunity he's offered them. Then, each of
those members is encouraged to recruit 10 more members, for a total of 100
members.
Now each of those 100 new recruits must pay fees to the tier-two
recruiters, who must send a percentage of their earnings up to Mike. This
recruitment and payment cycle repeats over and over again for as long as
possible. As it does, money continues to flow upward to those in the levels
above.
The emphasis in pyramid schemes is on recruiting new members.
Seldom is the sale of any product or service actually involved, though it may
have been implied to attract recruits. There is no identifiable source of
income other than that coming from those recruited.
According to the hard-sell pitches made at recruitment events, those
bold enough to take the pyramid plunge will receive substantial cash from
the recruits below them. However, in practice, the prospective member pools
tend to dry up over time. By the time a pyramid scheme invariably shuts
down, the top-level operatives may walk away with loads of cash while the
majority of lower-level members are left empty-handed.
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How to Implement Good Business Ethics
Fostering an environment of ethical behavior and decision-making
takes time and effort—it always starts at the top. Most companies need to
create a code of conduct/ethics, guiding principles, reporting procedures,
and training programs to enforce ethical behavior.
Once conduct is defined and programs implemented, continuous
communication with employees becomes vital. Leaders should constantly
encourage employees to report concern behavior—additionally, there should
be assurances that if whistle-blowers will not face adversarial actions.
Monitoring and Reporting Unethical Behavior
When preventing unethical behavior and repairing its adverse side
effects, companies often look to managers and employees to report any
incidences they observe or experience. However, barriers within the
company culture (such as fear of retaliation for reporting misconduct) can
prevent this from happening.
Published by the Ethics & Compliance Initiative (ECI), the Global
Business Ethics Survey of 2021 surveyed over 14,000 employees in 10
countries about different types of misconduct they observed in the workplace.
49% of the employees surveyed said they had observed misconduct and
22% said they had observed behavior they would categorize as abusive.
86% of employees said they reported the misconduct they observed. When
questioned if they had experienced retaliation for reporting, 79% said they
had been retaliated against.