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Why is 'Business Ethics' important

Updated: Nov 4, 2020

#BusinessEthics are based on the practice of #CoreValues in the organization which are often stated but remain limited to the display boards and marketing pitches. Generally, they are not spoken assertively by the management nor the employees have any great expectations about it.

This particularly hurts badly when it affects the conduct of the people. While some focus is seen in the fulfillment of the product quality and service quality as it directly impacts the business. When employees leave organizations, often it is a ‘value conflict’ with the organization that triggers them to leave.

A visit to a clinic

Let me explain this with an example. Today I had a doctor’s appointment for a minor issue. I reached the clinic on time. I was stopped at the security and was asked to wait outside the gate due to Covid social distancing norms, as the doctor did not arrive. After waiting for some time, I inquired about doctor’s arrival with the nurse, she said doctor is on the way.

When I expressed inconvenience to wait outside and questioned doctor’s time commitment. She allowed me inside and immediately said he was already there. At the front office desk, the receptionist said doctor is seeing someone and I got to wait. She was watching my conversation with the nurse. I sat in a corner waiting. After another 30 mins doctor walked in from outside and went to his room. When I met the doctor and told him that I was waiting for 1 hour. He said he was seeing someone while I knew he had walked in front of me.

This is an example when the staff and doctor believe that telling lies to the patients is ‘okay’. I finished my appointment and resolved that I will never go back to that clinic again as I lost the trust.

Self-Assessment Questions for Organizations

If the answer is ‘Yes’ to above questions, you are thinking right. Business Ethics is especially important if you want to be around for a longer time.

Why does Management find it hard to practice?

While it is often realized that the definition and implementation is hard due to subjectivity and vague or loosely defined interpretations. Teams are so busy in their jobs that unless this is taken as a special focus area, it is hard to bring synergy among the teams.

Here are more insights.

Integrity as a Value

Everyone expects integrity(#PersonalIntegrity) from others but very few believe in extending it. The definition of Integrity itself has many interpretations. Some amount of lies / non-transparency / concealing of facts is generally accepted principle with many people. If someone questions this, we hear things like ‘why are you over-reacting? It is normal. <This> mean <That> (interpretations).’

When the organizations encourage their employee to tell little lies / half-truths in their work, it is important to introspect what damage are they causing to the system and the people.

Additionally, does one have the right to get upset when the same person is at the receiving end?

Writing a rule book and communicating clearly is the first step before expecting results. When the chosen values lack definition of behaviour in carrying out of business, implementation and Measurement becomes impossible. It is only possible when they are SMART – Specific, Measurable, Actionable, Relevant and Time Bound.

Business without bending rules

The rules are often bent or broken for business and profitability. When everyone does that it corrupts the whole system and becomes a vicious cycle that hits back again and again in different ways. When the personal benefit overpowers the larger benefit, sooner or later the entire system collapses. Satyam scam and many other scams are examples of this.

Walk-The-Talk, Lead by example

Only when the #PersonalValues) match the #OrganizationValues, implementation happens efficiently. Only when one understands the importance of time commitment keeps the customer commitments. A non-believer can orchestrate it to some extent. However, it will lack the efficiency of a believer. To have business ethics rolled out in the organization, walking-the-talk always flows from top to bottom.

Focus matters

Being focused on personal prosperity or prosperity of all stakeholders and society are two different driving forces that depends on the Personal Values of promoters / owners of a business. Organizations that have a service motto i.e. solving some problem of the consumers with quality focus, remains in the business for longer time. Tata Group is a good example that serves the consumers through different products sustaining the quality and price for decades and being a respectable group.


People do business with people – hence an ethical journey begins with simple behaviors. When an organization chooses the path of Ethics, it may be hard to summarize all the elements that need to come together. However, making a beginning is always better for a bigger goal and larger good than not doing anything.

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