Abstract
One cannot underestimate the importance of business ethics today, which is a set of regulations, policies, and practices that determine company's behavior regarding such controversial issues as bribery, insider trading, discrimination, corporate governance, corporate social responsibility and fiduciary responsibilities (Business ethics, 2009).
This essay illustrates the correlation of business ethics and shaping of the public image of the company, attracting new investors and establishing long-term and reliable partnerships. Thus, ethical behavior is evident in the proper treatment of all stakeholders, including employees and customers, respect to the environment and fair market policies (Horton, 2015).
The examples reflect the idea of the high importance of business ethics to companies. Therefore, a great example of Cadbury Schweppes company demonstrates its commitment to practice ethical behavior ensuring diversity at the workplace, maintaining the high level of quality of products and respecting the environment through energy-efficient practicies. To the contrary the examples of Citigroup and Bank of America show how focusing only on profits may lead to failure (Ethics and Business Success, no date).
Today it's not enough for a company to offer products or services of a good quality at a reasonable price to achieve success. Obviously, there are a lot of components that company's success consists of. Basically, one of the key components is business ethics.
So what is business ethics and why it is so important to businesses? Business ethics is policies, regulations, and practices that businesses should stick to when facing a controversial issue regarding, bribery, insider trading, discrimination, corporate governance, corporate social responsibility and fiduciary responsibilities. Often business ethics is determined by law, but at the same time business ethics is kind of a basic framework that helps businesses to gain public acceptance (Business ethics, 2009).
Public Image
First of all, business ethics is related to a market economy. In market economies, people usually distrust big companies and corporations and the bigger the company or corporation is, the worse the situation with the level of trust is. Thus business ethics shapes the public image of a company, which is the way that public perceives and views a company or corporation. For instance, American Wal-Mart has a bad public image, while Toyota enjoys the good public image. Obviously, this fact depends on several things, but mostly on what acts corporations make regarding different issues such as environment protection, the way a company treats its employees and community they exist in, etc. That's why despite the fact that Wal-mart can offer products of quite a good quality at a very low price they still have a poor public image (Vasquez, 2017).
Investment
Secondly, business ethics is related to investment as well. Before making an investment in a particular stock, a person should thoroughly consider a list of things that are not limited only to the quantitative factors such as profit margin but also includes the qualitative factors such as the above mentioned public image and products or services that the company offers to people. All these cannot be neglected by a potential investor. Therefore, a company that wants to attract investors is usually characterized by a strong sense of business ethics, as business ethics includes the responsibility to investors as well. Thus, companies that have good reputations and practice ethical behavior tend to attract more investors that are new to the market (Vasquez, 2017).
Partnerships
Thirdly, business ethics is about partnerships. It's worth considering partnerships in the context of joint ventures, which is typical in today's business world. It wouldn't be an exaggeration to say that success of joint ventures is often determined by combined forces of two companies. Therefore, a company can do well in joint ventures if it has good and reliable partners. Establishing good and long-term partnerships means having a good reputation and hence practicing ethical behavior (Vasquez, 2017).
Finally, it's worth paying attention to some good examples of business ethics to understand how it works shaping a positive public image, helping to attract investors and establish partnerships. For instance, Cadbury Schweppes is a great example of a company that takes business ethics seriously and understands its importance. The financial success of the company can be explained by a high level of its commitment and willingness to exceed the expectations of all stakeholders, including employees and customers, of course. Cadbury's ethical behavior is reflected in its efforts to make nutritional values of its products, especially those that marketed to children, better. Furthermore, the company believes that success is also rooted in a diverse work environment, wich was created and ensured in the company. Besides, Cadbury pays attention to energy-efficient practices and ensures proper waste water treatment. In terms of suppliers choice, the company tries to improve working conditions in locations where they purchase products and raw materials, such as West-African cacao farms through developing and implementing programs on provision of assistance to local communities and farmers. Actually, Cadbury Schweppes’s ranks third in the list world's largest soft drink manufacturer which is also thanks to company's commitment to ethical behavior (Ethics and Business Success, no date).
It's also worth mentioning some examples of businesses that failed to practice ethical behavior, which affected their business outlook in long-term perspective. Thus, during the economic crisis of 2008 many of the Wall Street companies collapsed. To the largest extent it happened so because of lack of clear and transparent business strategies and focus on customer service, and what is more important because of their eagerness to make profits at the expense of ethics commonly practiced by other businesses. Therefore, such companies as Citigroup and Bank of America also failed as they had poor risk management and focused on profits only. Such actions are evidence of poor ethical practices and absence of the connection between the above-mentioned companies and their customers (Ethics and Business Success, no date).
The Conclusion
References:
Business ethics (2009) in Investopedia. Available at: http://www.investopedia.com/terms/b/business-ethics.asp (Accessed: 16 January 2017).
Ethics and Business Success (no date) Available at: https://www.saylor.org/site/wp-content/uploads/2013/09/Saylor.orgs-Ethics-and-Business-Success.pdf (Accessed: 16 January 2017).
Horton, M. (2015) ‘Why are business ethics important?’, in Available at: http://www.investopedia.com/ask/answers/040815/why-are-business-ethics-important.asp (Accessed: 16 January 2017).
Vasquez, M. (2017) Why business ethics are important for a company and its success. Available at: http://www.streetdirectory.com/travel_guide/161760/corporate_matters/why_business_ethics_are_important_for_a_company_and_its_success.html (Accessed: 16 January 2017).
