The 8 Biggest Business Ethics Mistakes

The moral compass of a company is what separates the respectable from the unscrupulous. However, as market pressures increase and profit motives dominate, this compass often becomes a little blurry. There are plenty of ways companies try to remain within the boundaries of ethical business behavior- even if they aren’t always successful. These eight practices that businesses uf business ethics ambassadors in particular should avoid regardless of the motive can help make sure your company’s moral compass is up to snuff- and ones you might want to avoid should be used with caution, if at all.

8 biggest business ethics mistakes are:

1. Undervaluing the Power of Your Reputation

Reputation is one of a company’s most significant assets and it takes years to build but can be destroyed in a very short time. You’ve likely heard that reputation is everything, but how you really use this information can make all the difference. If you want to know what people think about your products and services, pay attention to what they say when you aren’t around. While it’s true that not everything people say about your business is true, enough of the naysayers have good points that you’ll be able to glean valuable insights into how your customers feel about your products and services.

2. Achieving Results Where Results Are Not Worthy of the Effort

The most successful companies don’t just achieve results. They have a purpose and vision. They know who they are and what they’re about. In order to be successful, you need to be honest about what values your business holds, understand why those values produce results, and then communicate them clearly to everyone in the organization so that everyone is aligned on this purpose-driven vision. Organizations that don’t understand why they exist, what their purpose is, or where they’re headed are unlikely to last.

3. Ignoring the Law and Not Having Clear Ethics

There are laws that govern how businesses operate. There are rules of ethics and morality, too. Ignoring the law is a shortcut to trouble and you should never assume that you’re so big that the law doesn’t apply to your organization. But even if you operate completely legally, there are still ethical parameters within which it’s important for your organization to work.

4. Accepting Business-As-Usual as a Stable Baseline

Entrepreneurs who have recently started their businesses and long time business leaders have one thing in common: They’re always looking for ways to make things better, whether it’s increasing productivity or improving customer service or raising profitability. If you want your business to survive and thrive, you need to be willing to make changes. You can’t simply set a goal, decide on a course of action and hope that it’s enough because then you’ll always be looking for ways to improve your operations.

5. Not Admitting and Making an Effort to Correct Your Mistakes

Businesses get into a lot of trouble when they try to cover up past mistakes instead of admitting them, addressing the issues and taking corrective action- even if the problems are years old. Admitting mistakes means simply telling the truth about what has happened and why it happened, rather than trying to hide the truth or put blame on someone else. When a business owns up to past mistakes, it shows its customers that it’s committed to customer satisfaction. It also proves it can be trusted in the future.

6. Failing to Reward Good Behavior and Discipline Bad Behavior

Your company’s culture is determined by how you reward and discipline employees who behave in certain ways. You should always reward people who do a good job, whether they’re new hires or established veterans. If, on the other hand, someone violates company policies or fails to meet customer satisfaction standards, there must be consequences for those actions. Otherwise, others will see these negative behaviors as acceptable and your culture will quickly devolve into an unpleasant work environment with high turnover rates and unhappy customers.

7. Attributing Success to Luck

Luck is important, but luck can’t be used as a justification for poor performance. It’s also important to recognize that your business is a reflection of the way you manage it and it’s likely important decisions won’t go well in your care. If you’re constantly blaming bad luck on poor decisions or inadequate management, it sends the wrong message to everyone else in the company- especially if they’re wondering whether they’ve got a chance at succeeding with the same approach.

8. Using Sky-High Expectations to Justify Excessive Pay

Many large companies use bonus plans or salary structures that are out of line with what their employees really want and require. You should always make sure your compensation plan is based on what the market can actually afford. If it’s not, you’re setting yourself up for disappointment and should be ready to change things when it’s time.

Conclusion:

Though a business has to get profit in order to survive, they should not forget that their profitability is only possible because of the goodwill and patronage of the customer. So, they should serve the customers in a good way. They should make sure that they are making the best quality products so that the customer will like them and keep on buying from them. The company should not just arrange for the profit making for themselves, but for their customers too.