Introduction
Ethics is integrated into many areas of social life as it establishes decent conduct and appropriate practices among all members of society. Nowadays, many companies must also rely on ethical attitudes since they substantially contribute to an organization’s survival. In the highly competitive environment, ethics serves as one of the pillars of corporate prosperity. It is essential for the business to be ethical because this characteristic adds to a company’s value and reputation, enhancing its competitive advantage.
Corporate Social Responsibility
Many modern companies recognize the necessity to generate a positive impact on communities and society as a whole. They use various corporate social responsibility (CSR) initiatives and ethical practices. On the one hand, ‘doing good’ to communities has become a part of business operations because it enhances customer loyalty to the brand and employee loyalty to the workplace. On the other hand, companies implement such initiatives because ethical misconduct rapidly becomes known, which spoils corporate reputation. Furthermore, both organizations and customers equally regard CSR endeavors as vital differentiators in the market (Harrison et al., 2020, p. 431). Thus, CSR has tight connections to ethics, as well as the internal and external environment of any company.
However, an organization may find it challenging to introduce CSR due to the concept’s vagueness. CSR is commonly considered a corporate commitment to producing positive outward social impact, while business ethics reflects internal decisions regarding appropriate business activities, including avoiding bribery, ensuring transparency in information exchange, and so forth (Harrison et al., 2020, p. 432). As Harrison et al. (2020, p. 432) state, the definitions of CSR and ethics are used interchangeably, and both scholars and companies focus more on the business perspective rather than the customer one. Nonetheless, various studies suggest that organizations involved in CSR activities shape positive customer responses and behaviors (Harrison et al., 2020, p. 433). The main reason is the consumer view that an enterprise has high integrity and is worthy of trust.
Internally, ethical attitudes in the business setting dramatically influence employee behaviors. Here, CSR becomes especially critical as it positively influences financial performance indicators in addition to employee loyalty. For instance, Barauskaite and Streimkiene (2020, p. 278) claim that the relevant implementations minimize employee turnover, add to market value, and strengthen investor friendliness. However, the negative side of CSR relates to small businesses, as their efforts may not be appropriately acknowledged compared to famous brands. Within the framework of the present analysis, focus on CSR as part of ethical practices from the business perspective still emphasizes its importance for a company’s image, operations, and customers.
Job Satisfaction
A business extensively uses ethical practices and encourages corresponding attitudes, which increases job satisfaction and ensures employee retention. With increasing competition, experienced and reliable employees become priceless assets, as they can carry unique knowledge and specific skills (Nguyen and Duong, 2020, p. 382). This assumption emphasizes a need for a company to constantly contribute to the development of employees. Investing in employee training is not an option but a requirement of contemporary business, which, in turn, raises a corporate ability to retain employees. Moreover, it plays the role of a conventional ethical practice because staff can see it is valued and important for an organization and its success.
High turnover rates and expanding absenteeism always signify that an organization puts insufficient effort into ethics. McNaughtan et al. (2019, p. 85) argue that employee frustration is a result of poor recognition of employee contribution and scarce career growth opportunities, which can be generally labeled as unethical practices. As one can admit, maintaining ethical activities in a company is always connected to creating value. All enterprises must stick to the principle that ‘turnabout is fair play’, so if corporate culture ignores decent attitudes toward employees, a company will always suffer.
In order to be ethical, a business should also pay acute attention to employee motivation., Job satisfaction is based on intrinsic factors, such as meaning, responsibility, and personal growth, while extrinsic factors, namely salary, work conditions, and job security, are attributed to dissatisfaction (McNaughtan et al., 2019, p. 86). However, all the mentioned factors can be regarded as those positively or negatively influencing job satisfaction. For instance, if employees see no meaning in their jobs but receive high salaries, they still can poorly contribute to a company’s success. On the contrary, those receiving less money can express more willingness to put their effort when they view it as providing major positive change to an organization or industry.
Ethical Leadership
Fostering ethical attitudes in employees cannot occur without appropriate leadership models and manager-employee exchange. The key issue is not in a choice of suitable leadership style because a professional manager knows that each team is unique and often needs a flexible and individual approach that combines different styles. Since the discussion concerns ethics and relevant practices, one should focus on relationships in the workplace. Arshad et al. (2020, p. 134) assert that mutual respect and fair treatment demonstrated by leaders “instill a sense of obligation” for team members to reciprocate these behaviors. Furthermore, they are an integral part of the development of organizational citizenship, which is based on employee loyalty.
The employees should feel free to share their opinions and experiences with managers and colleagues. Here, one should understand that the corporate culture contained on pages of a company’s codes is worthless if its principles are not practiced in real life. As has been mentioned, ‘ethics’ is equal to ‘values’, which means that cooperative relationships are vital for a healthy workplace atmosphere. Moreover, Arshad et al. (2020, p. 135) emphasize the importance of prosocial behaviors focused on benefits to others. In turn, it creates a socially responsible human resource, and such a mindset contributes to improved ethical attitudes in a business. As one can see, ethical practices should be created based on real-life workplace experiences and then gain a foothold in corporate regulations and culture.
Conclusion
Finally, it is important for a business to be ethical because it has a considerable positive impact on an organization’s internal and external environment. Adherence to CSR plays an essential role, as it allows for acquiring a positive brand image and trust. Remarkably, CSR and business ethics are supposed to be separate concepts due to their respective external and internal focuses. However, for the present analysis, it has been sufficient to consider CSR as part of ethical activities. The measures to enhance job satisfaction can also be regarded as ethical because they create value for employees. Finally, ethical leadership is also crucial for companies in the sense of respectful treatment and relationships between managers and employees, which corresponds more to ethical practices than selecting a particular leadership style.
Reference List
Arshad, M., Abid, G. and Torres, F.V.C. (2021) ‘Impact of prosocial motivation on organizational citizenship behavior: the mediating role of ethical leadership and leader–member exchange’, Quality & Quantity, 55, pp. 133–150.
Barauskaite, G. and Streimkiene, D. (2020) ‘Corporate social responsibility and financial performance of companies: the puzzle of concepts, definitions and assessment methods’ Corporate Social Responsibility and Environmental Management, 28(1), pp. 278-287.
Harrison, D. E., Ferrell, O. C., Ferrell, L. and Hair, Jr. J. F. (2020) ‘Corporate social responsibility and business ethics: conceptualization, scale development and validation’, Journal of Product & Brand Management, 29(4), pp. 431-439.
McNaughtan, J., García, H.A., Garza, T. and Harwood, Y.R. (2019) ‘Empowering satisfaction: analyzing the relationship between empowerment, work conditions, and job satisfaction for international center managers,’ Tertiary Education and Management, 25, pp. 83-99.
Nguyen, C. and Duong, A. (2020) ‘The impact of training and development, job satisfaction and job performance on young employee retention’, International Journal of Future Generation Communication and Networking, 13(3), pp. 373-386.