Business Ethics, Principles, Benefits, & Examples
Why do business people need to apply business ethics? The application of ethics in business will help you more easily create a healthy competitive environment. To make it easier to understand, this article will explore what business ethics is in full. Check out the explanation!
Understanding Business Ethics
According to Sumarni (1998:21), the notion of business ethics is something related to the problem of evaluating business activities and behavior that refers to truth or honesty in doing business.
Another opinion expressed by Bertens (2000) business ethics is even broader than the provisions regulated by law and is a higher standard than the minimum standard of legal provisions.
Basically, business ethics are unwritten rules about how a business is run and is the norm for a company in making decisions. Understanding business ethics can also be referred to as a way to do business including all parts related to companies, the public, and individuals.
Business ethics is one of the things that has an important role in the company to shape the behavior of employees and leaders. In addition, it can also be used as a guide for both employees and management in carrying out their obligations professionally.
Therefore, if business ethics are not applied in business activities, it will lead to unfair competition between companies, consumers suffer, and the emergence of monopolistic trade practices.
Principles of Business Ethics
When doing business, business people are expected to apply the principles of business ethics that can be used as standards for behavior in a company. Some important things that become the principles of business ethics include the principle of honesty, the principle of responsibility, and the principle of mutual benefit.
It seems that honesty is always placed at the top position in all aspects of life, including business. Business people are required to apply the principles of business ethics because it is the key to success.
For example, when you are making a sale and purchase transaction with a client, the procedure must be in accordance with the rules that apply in your company. In addition, another example is in the matter of reporting money which needs to be based on transparency.
Dishonesty in business behavior can also be classified as a form of fraud, especially if there are other parties who are harmed. Being honest can make a company trusted and attract consumer loyalty.
The next crucial principle of business ethics is responsibility. The form of responsibility in the principles of business ethics is the company's dedication and willingness to create a comfortable and prosperous environment for all parties who are closely related to the company.
3. Mutual Benefit
In doing business, making a profit is one of the company's targets. Therefore, business ethics principles must be carried out by business actors seriously so that all parties involved can benefit and no party should be harmed.
Benefits of Business Ethics for Companies
Business ethics is an easy thing to apply if you are used to applying ethics in everyday life. Of course, applying business ethics can bring many positive benefits to the company. Here are the benefits of business ethics that you need to understand.
1. Establish a Good Reputation
By applying business ethics, the company will have a good rating and reputation from the public so that it can increase in the number of consumers. The continuous increase in the number of consumer can make your business grow and achieve the desired target.
2. Build Trust
As explained earlier, one of the principles that must be applied in business ethics is honesty. This will make the company gain the trust of consumers so that loyal customers are formed owned by the company. In addition, these consumers will also recommend your company to others.
3. Creating Moral Values
Moral and business ethics are two things that are closely related to each other. This is because by implementing business behavior and ethics by all employees and superiors, it can increase moral values in the company.
4. Generating Profit
Companies that consistently apply business ethics will make consumers believe and the result is that the company gets high financial returns. This is because the spirit of loyalty to consumers has been formed due to the business ethics applied by the company.
Purpose of Business Ethics
Of course, business ethics is something that is carried out with the intention of having certain goals to achieved. One of the goals of business ethics is to improve employee personality. This is done so that there is no misuse of the interests of fellow employees when carrying out their duties.
Furthermore, the purpose of business ethics is as an internal organization policy to conduct business fairly and not violate the rules. So, companies can communicate freely so that employees are encouraged to follow existing business policies.
In addition, the purpose of business ethics is to maintain relationships with each other who have interests such as customers, shareholders, employees, suppliers of goods, and anyone related to the company.
Examples of Business Ethics
Some things you can do as an example of business ethics are to remember names, because someone will feel more valued and comfortable at work. Even though it looks simple, this treatment can make the person feel recognized and the interactions you have will feel more concrete.
In addition, dressing neatly and using good language is also an example of business ethics. Many say that clothes and words reflect a person's personality. It also means you respect business relationships, bosses, or anyone you meet.
Saying thank you is also one of the behaviors to build a good image because it is considered as a form of appreciation for what others have given.
This is an explanation of what business ethics is. That is the importance of implementing business ethics in the company. Of course, this needs to be considered because it is very beneficial for many parties.