SkillRary

As businesses grow, they often choose to become corporations because selling stock to investors allows access to capital to hire new employees and fund expansion. When a company hires more workers and managers, it increases the chances that certain employees will partake in unethical business practices or do things that are counter to certain objectives that the business has set out for itself. Some companies create ethical codes to help make workers aware of ethical issues that they may face.

Business ethics carries significant influence in the corporate world. Not only does it change how businesses operate on a day-to-day- basis, but it also influences legislation around corporate regulation.

Business ethics is the study of how a business should act in the face of ethical dilemmas and controversial situations. This can include several different situations, including how a business is governed, how stocks are traded, a business' role in social issues, and more.

Business ethics is a broad field because there are so many different topics that fall under its umbrella. It can be studied from a variety of different angles, whether it's philosophically, scientifically, or legally. However, the law plays the biggest role in influencing business ethics by far.

Many businesses leverage business ethics not only to remain clean from a legal perspective but also to boost their public image. It instils and ensures trust between consumers and the businesses that serve them.

A corporate code of ethics cannot prevent unethical behavior, but it can have an impact on employee decisions. If a worker knows that a certain course of action violates his company's ethical code, he is likely to give more thought to whether or not he should pursue that course of action. According to a study conducted by LRN, a company that helps business foster ethical corporate cultures, 82 percent of workers say that they apply their understanding of an ethical code on the job. In general, an employee probably would not choose to violate his company's code of ethics unless it resulted in some significant advantage over other courses of action, because it would not be worth the risk of potential reprimand.

While codes of ethics can potentially influence behavior, inadequate employee knowledge can limit their effectiveness. A code of ethics must be visible to workers for it to provide an effective tool for guiding decisions. If workers are not aware of a code of ethics, don't know where to find it or do not understand it, their behavior cannot be influenced by it. Employees who are required to read a company's code of conduct during training and have ready access to it are more likely to be influenced by it.

Another factor that can affect the extent to which code of conduct influences behavior is whether workers choose to report unethical behavior of coworkers and whether violations have consequences. Even if most workers follow a code of conduct, they might not be willing to accuse coworkers of unethical behavior. Similarly, if violations have no consequences, employees may not feel obligated to follow a code of conduct to the letter

Business ethics as a field of study is incredibly diverse, but many concepts can be divided into a few basic principles. Every business should strive to follow these guidelines in the pursuit of success.

• Trustworthiness

Achieving trustworthiness typically involves being transparent and honest in all actions and communications. Being trustworthy can have a positive impact both internally and externally. Consumers appreciate openness, as it provides them with insight into how a business operates and conceptualizes the work that they do. Employees also appreciate this quality in a business that they work for.

• Respect

Showing respect for employees and customers involves following through on all promises -- and providing sincere apologies and appropriate compensation if anything falls through. Showing a lack of respect will deter customers from engaging with a business and lower a business' reputation. It will also do significant damage to employee morale and increase turnover.

• Fairness

Treating customers and employees with a sense of fairness and justice is a key type of ethics. Manipulative behaviors aren't just unethical, but they are also unhelpful -- and the top priority of any business should be to be helpful to its customers and employees. It is also important to treat all people equally.

• Caring

Businesses, at the end of the day, are composed of human beings. There are human beings that consume goods or services from the business, and then there are human beings that work to produce those goods or services. Being open to their struggles and coming to the table with solutions will show empathy -- a valuable tool for any business to utilize. Showing a sense of caring and keeping the lines of communication is not just the ethical thing to do, but can also boost internal and external perceptions of the business.