Ethics in business is key to profitability and success
Spokesperson: Mr. Asad Abbas Badami, Managing Director at Al Muqarram Auto Spare Parts LLC
Industrial relations, by definition, refer to the relationship between the management and the workers/employees of a given industry. And no matter what the industry type and scale, the problems affecting industry relations remain more or less uniform across the globe. “What is the worldwide industry problem when it comes to upholding strong relations?”, one may ask. Well, more than anything, it’s “us against them” approach of employees towards the management that gives rise to most issues. The stubborn and inflexible “I’m the boss, I own these people” mentality of the management only adds to the conflict. Both these factors, when combined, make a lethal combination that leaves little or no space for business ethics to flourish and nourish a conducive and productive work environment. These issues need to be nipped in the bud for ethical practices to bloom. Ethical practices, followed by both parties, leave almost no room for unpleasant issues to crop up. It is essential for the management to break across these barriers in order to let strong functional industrial relationships form and grow.
This is exactly why a level of sensitivity towards ethical standard is very important in trade and business. Conforming to high ethical standards lets professionals and corporations co-work in a fair and moral manner suitable for all. A level of sensitivity towards morals and values is essential for the growth and sustenance of any organization. Following ethical practices develops a sense of trust between the workers and the management, hence strengthening industrial relationships. Business ethics lead to a more productive workplace. It is a known fact that long-term profitability of an enterprise is directly proportional to its value system as unfailing ethical behavior generates a consistent positive public image. The effects of morally correct practices are positive in a long run. Ethical businesses not only help build a positive reputation for an organization but also attract credible and talented individuals who wish to be a part of the team.
Business owners must do whatever it takes to cultivate a conducive environment
It is important to understand that it is almost entirely upon business owners and the top managements to develop a trust factor. There is a lot that can be done, here are a few suggestions:
It is essential to understand the importance of being ethical
- Firstly, business owners need to define and stick to the values their product resonates. It is essential to create a value chart and be consistent with your employees and customers in terms of the values and morals you wish to abide by. Inconsistency in values leads to doubt and distrust among all stakeholders.
- Secondly, business owners must learn to be more involved with their people. An approachable boss eliminates unreasonable fear and generates trust and a sense of belonging amongst employers. It is important to be visible and partake as much as possible in building a healthy environment.
- Lastly, business owners need to be more sensitive and receptive towards their employees and clients. Welcoming feedback is the best way to understand and alter your offerings, making it exactly what it is expected to be. This creates a kind of unmatched interest and loyalty.
The importance of business ethics in running a profitable business better not be overlooked because high ethical standards play a crucial role in the success of an enterprise. From ethics in management to sensitivity in the way the enterprise deals with its stakeholders; ethical practices are known to increase profitability in the long run. Be it ethical accounting practices or treatment of employees, the management needs to lead by example in order to ensure that each level of employees consistently follows ethical practices. This creates a positive work environment for everybody and it is no secret that a happy employee is a productive employee. While unethical practices spread unrest amongst employees, practices that resonate the basic morals people seek in enterprises increase happiness and productivity. Satisfied employees are able to focus on their jobs, while dissatisfied employees are always distracted. Hence, value systems of enterprises need to have a huge impact on employee retention as well as turnover. Similarly, other stakeholders of an enterprise like investors and customers also depend heavily upon the image of the company. Unethical practices lead to distrust and lack of confidence, which has a direct negative impact on the profitability of the business.
Both internal and external trade relations matter
Ethical standards need to be maintained both internally and externally to cultivate sustainable relations that lead to increased trust and confidence, amongst all stakeholders. When your stakeholders i.e. employees, clients, investors, public etc. trust in your enterprise and your ways of working, it obviously leads to strong and sustained relationship building with each of them. Impressive numbers on financial statements don’t matter beyond a point if your stakeholders are constantly dissatisfied with you owing to your unprincipled practices. Every enterprise has a moral responsibility towards its consumers, employees, investors, government, environment and even the society at large.
It is, therefore, imperative for enterprises to maintain principles in a holistic manner and conform to high ethical standards in every aspect of their business in order to build sustainable industrial relations. After all, industrial relations have a great impact on the productivity across all levels of an enterprise and everyone knows that success and profitability depend majorly on productivity.
Adherence (or not) to high ethical standards is the difference between a successful and an unsuccessful enterprise these days. Not being ethical is not very durable.