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- 1. Ethical motivation: It protects or improves reputation of the organization by creating an efficient and productive work environment. At a time of mass corporate downsizing, one of the most effective ways to appeal to the fragile loyalty of insecure employees is to promote an ethical culture, which gives employees a greater sense of control and appreciation. • Balance the needs and wishes of stakeholders: There is pressure on business to recognize its responsibilities to society. Business ethics requires businesses to think about the impact of its decisions on people or stakeholders who are directly or indirectly affected by those decisions. Companies build their image by acting in accordance with their values, whatever they might be. Creating a positive public image comes from demonstrating appropriate values. Publicizing and following a company’s values allows stakeholders to understand what the company stands for, that it takes its conduct as an organization seriously. • Global challenges: Business must become aware of the ethical diversity of this world because of increasing globalization of the economy. It must learn the values of other cultures, how to apply them to its decisions, and how to combine them with its own values. In a world where transnational corporations and their affiliates account for two-thirds of the world’s trade in goods, and employ 73 million people, corporations cannot afford to ignore the reality of multicultural ethics. • Ethical pay-off: They serve to protect the organization from significant risks, and to some degree help grow the business. Risks such as breaches of law, regulations or company standards, and damage to reputation were perceived to be significantly reduced. • Employee Retention: One of the major costs in business is inappropriate turnover. The loss of valuable experience and development of new personnel is a cost companies can control. Seldom is pay the primary factor in losing an employee. What would a company give to retain valuable employees? With a successful program, the employees work with managers and supervisors in making decisions based on the company’s values. A successful Business Ethics program establishes a culture that rewards making the right decision. • Prevention and Reduction of Criminal Penalties: The United States Sentencing Commission Guidelines state that to receive a 40% reduction in federal penalties, a company must have “an effective program to detect and prevent violations of the law”. Executives cannot always be aware of everything done in a company’s name. Jeffrey Kaplan in his article The Sentencing Guidelines: The First Ten Years points out that recent cases also show that prosecutors are electing not to pursue some actions because the companies in question have sound programs in place. This is a tremendous asset to companies under regulatory scrutiny. • Market Leadership: When a company fully integrates its values into its culture, quality rises due to the employee’s focus on values. Customers see that the employees care about the customer’s concerns. Employees reflect appropriate values in their attitude and conduct. • Setting the Example: By setting the example in the community and market, the entire industry has a new standard that allows the community and the market to recognize the company as a leader. When the word gets out, competitors will have to answer questions about why they were not establishing similar values.
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