While some people believe that the only thing companies should focus on is making money in a lawful way, other people believe companies should do this ethically too. Business ethics can bring significant benefits, especially to a company’s reputation. Here are top 3 advantages of business ethics.
#1. Provides a competitive advantage in terms of customers
When a company behaves ethically, they can attract customers to their products and services and sway them towards loyalty.
Such a mindset might be a fashion brand whose clothes are sourced, designed and produced in ways that are kind to the environment and the workers. Or it could be a print company whose materials are sourced sustainably, the labourers are paid an appropriate living wage and the printing processes do not damage the environment.
Whatever the industry, an ethical way of doing business can be that company’s USP (unique selling point). This boosts a company’s reputation which in turn, can boost sales. Customers feel better about parting with their money if they know the goods will have been produced ethically and responsibly.
#2. Improves employee happiness
Employees will feel more comfortable working for a business that’s behaving ethically than one that’s not. After all, they don’t want to be partially responsible for any unethical consequences, such as contributing to the deforestation of an area or poverty due to underpaying labourers.
This will boost productivity. Business ethics don’t just make current employees want to stay. It can also give businesses a competitive edge with regards to employee recruitment, particularly among the younger generation.
#3. Attracts more investors
If investors know that the company they work with prioritizes having high morals and will operate in an ethical way, they will be safe in the knowledge that their money is being used in a responsible way. Plus, it means they can be comfortable knowing they’re not indirectly contributing to unethical practices. This is an advantage because investors will be more likely to continue funding the company.
Strong business ethics are also an attractive quality, which means other investors are more likely to be interested in investing their money into the company, keeping its share price high and protecting it from takeover.