Building a solid reputation is crucial to succeeding in business, and one key aspect of that is displaying ethics. Great entrepreneurs and corporate leaders know how important ethics is in the entrepreneurial world as it feeds directly into their businesses and improves not only their relationships with their target audience but also with their stakeholders as well.
In this article, we’ll be discussing the importance of ethics in business so you can establish a brand image that’s impactful, transparent, and trustworthy.
Why is business ethics important?
There are many reasons why ethics is important for any business. Whether it’s multinational giants or SMEs, being able to operate ethically affects how a certain brand or company is perceived by the general public. Companies can’t afford to have their reputation tarnished as this can lead to a decline in customers, affect banking and community trust, and harm relationships with investors and suppliers.
Any business coach will tell you that brand reputation is one of the pillars of a successful business. It’s an intangible asset that can make or break your entire organisation. Thus, it’s imperative that you build your reputation and maintain that by being involved with the community, meeting obligations, demonstrating core values, and making thoughtful decisions.
Developing an ethical brand culture starts at the top, whether it be at a board level or a business owner perspective. Some businesses simply want to earn a profit or just somewhat get even, without even paying attention to ethics or integrity. That’s not enough if you want to gain an advantage to your competitors. If you truly wish to make a difference, you have to establish a culture based on your company’s core values.
Why does your business exist? What are your reasons for offering a particular product/service? Most people will answer “to make money” and that’s while not necessarily a bad thing, you have to have a strong reason why your company exists. This “why” is what guides your whole team throughout the entrepreneurial journey and will be the basis of their decision-making processes.
Examples of how bad business affected major companies
You don’t need to look too far to see how unethical business practices have caused major damage to some of the most well-known companies around the world. To make sense of how important ethical business really is, check out the examples below:
- The Commonwealth Bank of Australia was accused of anti-money laundering failures back in 2017. According to the Associated Press, Commonwealth Bank has been hit with over 100 allegations of counter-terrorism laws and anti-money laundering which completely devastated the company.
- Murray Goulbourn, a well-known dairy processing company, slashed the prices of milk under the agreed pricing between them and the farmers. This caused a loss of confidence with farmer suppliers and inevitably affected investing public as well. Just this year, Murray Goulbourn announced that its Kiewa and Rochester plants will be close while rival Fonterra announced an increase in its volume of milk received.
- Volkswagen has erred multiple times in the past, with the most recent being their allegedly misleading emission reports. Further information revealed that the car company has allegedly tested the effects of toxic fumes directly on monkey test subjects (and humans) which directly impacted its reputation from its customers. The fiasco led to Volkswagen losing almost a quarter of its market value after admitting to its air pollution tests in the U.S.
- Wells Fargo, a once reputable bank company in the U.S., suffered a billion-dollar loss of deposits due to their fake account scandal. The bank discovered more than 3.5 million fake bank accounts and credit card accounts which discouraged their customer base from transacting with their company.
How a business mentor can help you establish an ethical business
Business mentors exist because they have the knowledge, experience, and expertise to guide entrepreneurs on their journey through success. Having the support of an industry professional can make a huge difference in terms of establishing a credible brand image, developing an ethical brand culture, and reinforcing the core values that serve as the backbone of your company.
With a business mentor, you can work together on improving your business and your entrepreneurial career as well. They will help you set meaningful goals and standards that exemplify a trustworthy company which is key to obtaining future investors and encouraging repeat sales from existing clients. A well-matched business coach can help you with the following aspects:
- Discuss the ideal culture for your organisation starting from the top. You will learn to lead by example and influence your team to operate with ethical values in mind.
- Recruit like-minded employees who share the same goals, interests, and values that you have.
- Monitor the codes and policies that are set in place, making sure they adhere to ethical business practices.
Different businesses will require different approaches in building a solid brand reputation. Thus, you want to work with a business mentor in Melbourne that has sufficient experience across multiple industries. Call Bruce Frame today to learn how an engaging business coach can help you succeed in business ethics.