Why It Is in a Company’s Best Interests to Be Ethical?

Why It Is in a Company’s Best Interests to Be Ethical?

We all remember the WorldCom and Enron scandals of the late 1990s, and the financial crisis of 2008 is still leaving an impression on our modern economy. When these events are brought up, most people like to mention how this kind of scandal seems to be the pattern amongst all corporations. This is not necessarily true. There are companies that believe in doing the right things for their customers and the public at large.

These companies will either start their own foundation or sponsor an event from another person’s foundation. Some other ways companies will help are through using environmentally friendly materials and processes, and by providing help to their employees and customers. This help can take the form of scholarships, gifts, and vacations.

Why Companies Break the Rules?

It’s hard to answer the question of why companies break rules without considering the human condition. Most companies that break the law are greedy and want more. They are willing to do anything to get it. Most executives will pull money out of their companies using insider trading today, and they will also build their products through cheap or unethical means.

Some other people are used to doing things a certain way and when the industry changes in the way they can’t anticipate, they will stick with what they’re familiar with instead of adjusting to the new system.

Sometimes companies will break rules because of an ironic loyalty to a supplier or customer. If the customer is large and demands a tool be built a certain way or at a certain price, the company will then have to decide whether or not they want to conform to that customer’s wishes. If the contract is large enough, many will succumb to temptation.

Why Companies Want to Do Good?

On the other hand, companies seek to do well for their customers and employees because of a sense of duty in most cases. These companies want to cultivate a atmosphere of inclusion, whether that be through shared interests or by embracing differences in their employees.

Many companies have an ethos that requires them to help out in their communities, so they devise methods of taking care of the people in the community. This can often take the form of the company starting a side organization that donates to local businesses or charities.

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Just because a company wants to do well, doesn’t mean it did well in the past. A lot of companies have been engaged in scandal and they desire to rehabilitate their image through means of rectifying whatever problem they had caused. Depending on the size and scope of the corrective measure, it can either achieve its intended purpose or it will backfire on the company.

The Importance of Good Works for a Company’s Image

It is very important that a company focus on a larger cause that is different or perhaps related to its objective. If the world or the local community has done something for this company by patronizing it, is best for a company to recognize this and put a program together for the sake of those who helped. If you help those out who helped you, it goes a very long way in fostering a sense of loyalty on the part of both the customers and the employees that have received the largesse.

Companies, at the end of the day, are like people because their reputation is important in determining their future. The more ill will the company generates toward its customers, the easier it is for competitor or an upstart to supply the needs that the bad company is missing and take their market share.

Commerce relies on both the rise and fall of companies and a lot of times this can happen not only through poor business practices but if the company has given the impression that they don’t care about anything but making money. At the end of the day, people want to believe that the things they buy are not hurting others, and if they find out that they are, it is harder for them to do business with that company.

Any executive in the company should not only be concerned with its bottom line, they should also be concerned with what they are doing to uplift their communities and those around them.