Business Ethics and Social Responsibility: A Startup Guide

June 17, 2021

Morality, business ethics, and social responsibility are the foundations of mankind, and everyone recalls studying about them in school. However, “ethical” is one of those words that has so many different definitions and interpretations that it may be difficult to pin down exactly what it means, especially when employed in the context of business.

Greater awareness of good business ethics and how organizations perform in terms of their social responsibility commitments is a global trend. Failure to recognize and comprehend the relevance of these issues may be fatal to a company’s bottom line. Modern media is merciless in its speed and openness.

Simply said, ethics is knowing what is right and wrong, and then doing the right thing. However, “doing the right thing” is not as uncomplicated as most of the corporate ethics literature suggests. “Should Bob cheat Jack?” or “Should Jack mislead his boss?” aren’t the most common ethical challenges in the workplace.

I believe if you are reading this article, either you are a business personnel or finding ways to start a business, which means you are in the right place.

What is Business Ethics?

At an early age, we are all taught fundamental ethics. Don’t steal, don’t cheat, and don’t blame your sister if the cake goes missing from the fridge. At its most basic level, ethics (including business ethics) is discriminating between right and wrong and then doing what is right rather than what is wrong.

Acting in the best interests of users, customers, suppliers, and workers, as well as society at large, is part of good business ethics. To do so, a business must be able to tell the difference between “right” and “legal.”

When it succeeds, it will create a healthy workplace culture that instills strong values in its employees and reaps the benefits that come with it. Unfortunately, ethical challenges are rarely so straightforward, and this is especially true when it comes to corporate ethics.

No, a company should not steal another’s intellectual property, deceive a court about it, and then blame others rather than take responsibility if found; yet, these are not the areas where companies have problems. If a company does any of these things, it will be doing it with its eyes wide open.

The most difficult area for business ethics is when a company is functioning lawfully yet its activities are ethically questionable. They are caught off guard and unprepared for the repercussions. Did Cambridge Analytica, for example, breach any laws when it harvested data? Why does the age of the individuals who make the soccer balls you sell matter? What should a supermarket pay for a liter of milk it intends to sell to its customers?

When businesses make mistakes, they can’t hide from the internet’s speed. The building blocks for mainstream news stories are now viral indignation on Facebook. Even when an organization has operated following legal standards, its reputation and image might be severely harmed in a matter of seconds.

Cultivating Ethical Culture in Organizations

An organization’s culture is made up of its values, conventions, folkways, and practices. Moral values, or values on good and wrong, are the subject of ethics. As a result, cultural assessments may be particularly useful for evaluating an organization’s moral ideals.

Unless all employees are trained on what the ethical code is, how it operates, and their duties within it, it is effectively meaningless. If not addressed openly and honestly, the system’s nature may inspire suspicion. Furthermore, regardless of how fair and current a set of policies is, the legal system will frequently view employee conduct (rather than written regulations) as a de facto policy.

As a result, all employees must be aware of and follow rules and procedures of the business ethics letter. This complete compliance necessitates policy and procedure training.

What is Social Responsibility?

The terms business ethics and social responsibility are frequently used interchangeably. The social responsibility movement, on the other hand, is only one facet of the larger field of business ethics. Increased public awareness of the role of business in helping to establish and maintain highly ethical behaviors in society sparked the social responsibility movement in the 1960s.

A responsible organization evaluates and acknowledges the influence of its actions on society and the environment, and acts in a way that benefits society’s long-term development, health, and welfare. It is expected that businesses would not abuse people or the environment for profit and that they would behave and conduct business ethically and with awareness of social, cultural, economic, and environmental concerns.

Simple initiatives toward enhancing social wellbeing include revisiting safe working standards and ethically managing supply chains to minimize exploitation. Organizations that operate properly and show social awareness should get support from the society they are helping to better.

Business Ethics and Social Responsibility:

Though business ethics and social responsibility are inextricably linked, there is sometimes confusion regarding the difference between the two, particularly because neither phrase has a universally agreed definition. Corporate social responsibility (also known as CSR) is a term that is used by many different parties in a variety of ways.

Business ethics is a large topic of study that deals with ethical decision-making in business situations. In a nutshell, it is concerned with a company’s social responsibility as well as its commitments to its workers, customers, suppliers, and other stakeholders.

The following topics are frequently debated in the context of business ethics:

Manipulation and deception
Sustainability
Inclusion and diversity
Exploitation
Contributions and donations

On the other hand, while social responsibility falls within the umbrella of business ethics, it focuses on a company’s societal responsibilities. The extent to which firms owe something to “society at large” or feel obligated to give back — that is, to people who are not directly associated with the business — is referred to as social responsibility.

Why Are Business Ethics and Social Responsibility Important for Startups?

Now, more than ever, how your company conducts itself ethically may alter the course of its success. Here are four reasons why you should care.

1. Attracting and retaining top talent

The ability to recruit top personnel is critical to a company’s success, but hiring exceptional personnel requires more than simply a competitive salary. According to Bentley University research, 86 percent of Millennials think it’s important to work for a company that operates ethically and responsibly. In fact, most Millennials would be happy to work for such a company for a significant wage decrease.

2. Employee Participation

Employees will feel more engaged if they are involved in larger procedures and vision planning, such as establishing and implementing a socially responsible program for your organization.

3. A competitive advantage

Another element to consider when it concerns business ethics and social responsibility is the compounding nature of competition. Those that do not adopt and invest in ethical procedures will appear worse in comparison as more firms embrace and engage in ethical practices.

4. It has the power to make or break a brand.

Adopting ethical business practices and incorporating social responsibility may help you establish your brand, especially if you’re just getting started.

Summary

The need for excellent business ethics and social responsibility are at an all-time high, and they’re just getting higher. Walking a tight line between conservation and consumer demand is part of social duty. Balancing environmental duties with economic concerns is a difficult challenge, yet many businesses are still battling with it far into the twenty-first century.

Though many individuals feel that business ethics and social responsibility decisions should be simple, the consequences and outcomes of different actions may have a significant influence on local customers, economies, and even global repercussions. There are several other better benefits than the warm pleasure that comes from following business ethics and social responsibility.