Learning Tools

Business Ethics For Your Small Business

Business ethics is a huge issue in our society today. Small business owners face ethical decisions every day in their companies. Fail to please customers and you risk going out of business; fail to protect employees, and you risk losing invaluable human resources. You need to ensure that the interests of everyone are being served equally, while still operating your business effectively and profitably. Having a clear code of ethics can help your small business determine its goals, values, and priorities. It can also act as a safeguard for possible future discrepancies if you ever get into legal trouble. So whether you are a tech company or a roadside food truck owner, ethics failures can hurt the bottom line. Here are some tips to get you started with business ethics in your small business:

  • Ethics in human resources: The ethical practices in human resources are the way of treating the employees of the organization. If an organization is managing their employees in the best way, then one can say that the organization is under right ethics, and they are following the moral principles and the ethics of the organization properly.
  • Set Priorities: Your code of ethics should work in conjunction with your mission statement and the overall goal of the company. Remember that this code is not just for employees. It applies to any partnerships, vendors, and outsourced work. The first thing you need to think about when writing out your code of ethics is the values that are important to your business as well as the boundaries that need to be set.
  • Developing Codes of Conduct: If your organization is quite large, e.g., includes several large programs or departments, you may want to develop an overall corporate code of ethics and then a separate code to guide each of your programs or departments. Codes should not be developed out of the Human Resource or Legal departments alone, as is too often done. Codes are insufficient if intended only to ensure that policies are legal. All staff must see the ethics program being driven by top management.
  • Ethics Training: The ethics program is essentially useless unless all staff members are trained about what it is, how it works and their roles in it. The nature of the system may invite suspicion if not handled openly and honestly. In addition, no matter how fair and up-to-date is a set of policies, the legal system will often interpret employee behavior (rather than written policies) as de facto policy. Therefore, all staff must be aware of and act in full accordance with policies and procedures.
  • Avoid discrimination: Addressing discrimination in your code of ethics can help you to avoid lawsuits from employees who believe they have been discriminated against, which could costs thousands of dollars, and can help to ensure that everyone in your company is treated fairly.
  • Corporate Social Responsibility: Although CSR is considered to be an ethical dilemma, it is imperative for a company to support the communities that they operate in. Nevertheless, CSR may also have some auxiliary benefits. It can help to build a feeling of inclusions among your team as you all work together for a good cause. It can also improve your public image, as consumers tend to prefer companies that are ethically engaged.
  • Customer Service: Your code of ethics should establish clear guidelines for how to handle these problematic customers. The guidelines that you establish should exist to protect customers from employee retaliation, protect employees from abrasive customer behavior, and protect the company itself from difficult legal situations.
  • Sustainability: ‘’Going green,” or adapting a business model to be more sustainable can be an excellent way of demonstrating a serious commitment to CSR in the eyes of consumers. Small businesses might not be able to deliver the same level of marketing impact with their efforts to go green, but these efforts can still trickle into social media and online reviews.

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