Benefits of ethical behaviour: Overview

Ethics is a set of moral principles which recognizes the difference between right and wrong and consistently strive to set an example of good conduct. Ethical behaviour of a business is shaped by the internal culture of an organization is recognized by the customers, competitors, government, regulators, and all the stakeholders. Organizations behaving ethically also able to build customer loyalty, attract and retain talented employees, avoid legal problems, and attract investors.
Customers’ loyalty:
The customers who felt that they were cheated by the company such as being overcharged or the quality of the product sold by the company is not up to the mark as advertised, they will not be a repeat customer. These customers can also cause severe damage to the company’s business by word-of-mouth negative-publicity about unfair treatment inflicted on them. On the other hand, a company’s good reputation can help them gain a positive image in the bazaar which may bring new customers to the business of the company.
Attract and retain talented employees:
Behaving ethically safeguards positive ambiance at the workplace which offers employees a feeling of loyalty and attachment towards the organization. The ethics compliant organizations also develop their brand image and such a reputation helps them to attract and retain the best people in the industry. Attracting and retaining talented employees ultimately contribute to organizations’ sustainable competitive advantage. The satisfied employees at the workplace would like coming to work happily instead of thinking about the source of burden. On the other hand, talented employees of an organization want to be compensated according to their performance and dedication. Further, the employees at large want career advancement in the organization based on their performance and not on the basis of favoritism shown by the management. Those employees who do believe that the management is biased against them are often not as dedicated to their jobs as they could be. They may even think about quitting the job. So, ethically negligent organizations are more prone to stress, attrition, and dissatisfaction at the workplace.
Legal and regulatory problems:
Worldwide ethical issues generally come under legal and regulatory standards, making it compulsory for organizations to comply with the norms like labour laws, environmental regulations and workers safety norms, etc. The ethically responsible organizations are less susceptible to violations, scandals, and disasters. However, the management of certain companies is breaching the regulations to cut the costs and make more profit. Besides paying legal fees and fines to the Government authorities being caught for the irregularities, places them at an awkward and embarrassing position in the eyes of the sensitive public. It not only reduces the reputation of the company, in the long run, but an incident of ethical violation also reduces the company’s market share, shrinks their sales plus revenues and finally upsets their bottom line.
Attracting Investors:
Ethics compliant organizations build an organizational reputation. The investors who want to invest in a company prefer a company which establishes integrity, a sense of responsibility and trustworthy in the public mind. So, by behaving ethically, organizations can derive huge advantages in attracting investors.
Conclusion:
Making profit in a legal way should not be the only focus of organizations, they must do this ethically too to enjoy the other benefits.

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