Chapter: Business Science - Business Ethics, Corporate Social Responsibility and Governance

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Public Good

1. Attracting and retaining talent 2. Investor Loyalty 3. Customer satisfaction

Public Good:

 

1. Attracting and retaining talent

 

People aspire to join organizations that have high ethical values. Companies are able to attract the best talent and an ethical company that is dedicated to taking care of its employees will be rewarded with employees being equally dedicated in taking care of the organization. The ethical climate matter to the employees. Ethical organizations create an environment that is trustworthy, making employees willing to rely, take decis ions and act on the decisions and actions of the co-employees. In such a work environment, employees can expect to be treated with respect and consideration for their colleagues and superiors. It cultivates strong teamwork and productivity and support employee growth. Retaining talented people is as big a challenge as getting them in the first place. Work is a means to an end for them, not an end in itself. The relationship they have with their employer must be a mutual, win- win one, in which their loyalty should not be taken for granted. Talented people will invest their energy and talent only in organizations with values and beliefs that match their own. In order to achieve this match, managers need to build cultures, compensation and benefits packages, and career paths that reflect and foster certain shared values and beliefs.

 

2. Investor Loyalty

 

Investors are concerned about ethics, social responsibility and reputation of the company in which they invest. Investors are becoming more and more aware that an ethical climate provides a foundation for e fficienc y, productivity and profits. Relations hip with any stakeholder, including investors, based on dependability, trust and commitment results in sustained loyalty.

 

3. Customer satisfaction

 

Customer satisfaction is a vita l factor in successful bus iness strategy. Repeat purchases/orders and enduring relationship of mutual respect is essential for the success of the company. The name of a company should evoke trust and respect among customers for enduring success. This is achieved by a company that adopts ethical practices. When a company because of its belief in high ethics is perceived as such, any crisis or mishaps along the way is tolerated by the customers as a minor aberration. Such companies are also guided by the ir ethics to sur vive a cr itica l s ituatio n. Pre ferred va lues are identified ens ur ing that organizational behaviors are aligned with those values. An organization with a strong ethical enviro nment places its customers' interests as foremost. Ethical conduct towards customers builds a strong competitive position. It promotes a strong public image.

4. Regulators

 

Bus ines s s ho uld ac t ethica lly no t o nly to b e ne fit itse lf a nd its reputation but also all the key stakeholders.

 

Regulators eye companies functioning ethically as responsible citizens. The regulator need not always monitor the functioning of the ethically sound company. The company earns profits and reputational gains if it acts within the confines of business ethics.

 

To summarize, companies that are responsive to employees' needs have lower turnover in staff.

 

— Shareholders invest their money into a company and expect a certain level of return from that money in the form of dividends and/or capital growth.

 

— Customers pay for goods, give their loyalty and enhance a company's reputation in return for goods or services that meet their needs.

 

— Employees provide their time, skills and energy in return for salary, bonus, career progression, learning.

 

CONCLUSION

 

In making ethics work in an organization it is important that there is synergy between vision statement, mission statement, core values, general business principles and code of ethics. A commitment by corporate management to follow an ethical code of conduct confers a variety of benefits. An effective ethics program requires continua l reinforcement of strong values. Organizations are challenged with how to make its employees live and imbibe the organization codes and values. To ensure the right ethical climate, a right combination of spirit and structure is required.

 

Corporate Ethics is much needed to stress the importance of sustainability, social development, stakeholders, consumer satisfaction and service orientation in place of profit orientation. Ethics point out what is good and what is bad, so also what is right or wrong. It brings to the notice of the business community the importance of honesty, sincerity and fairness which makes them alert and socially conscious. This also expedites a better relation between business and the society. It reconciles conflicting interest of various sections of the society such as workers, shareholders, consumers, distributors, suppliers, competitors and government.

 

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