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Ethics CSR Sustainability

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Ethics and Corporate Behaviour – A Tool to Sustainability

Ethics is not new to the world of business. The business world has always had some form of rules, regulations, standards and norms for how business is carried out. This approach is generally changing when you consider the social and cultural basis of different countries in which businesses operate, especially when you consider the fact that we all operate today in a global business village.

When organizations apply these standards and/or rules, as part of their organizational responsibility, it is called an “ethical code of conduct of business”. However, ethics is part of business responsibility, as such corporate behavior should be conducted in an ethical and responsible manner and this is why organizations promise their shareholders and stakeholders that they will operate their businesses and behave in a fair, ethical and responsible way.

Ethics shows organizations how to behave and conduct business in a proper manner, despite the fact that businesses are sometimes faced with the issues of “conflict of interest”.  Business ethics can be said to be the way in which an organization carries out its business honestly, respectfully and fairly in their conduct and representation in all of its relationships.

As such, ethical behavior and ethical business has effects not only on the shareholders of the organization, but also on the stakeholders and the economy as a whole. This is based on the premise that when organizations act ethically in their business decision-making, then it ensures that such organizations are more effective and productive in the utilization of their economic resources.

On the other hand corporate behavior is important for the success both financially and in the relationship between corporate and business interest – stakeholders, customers etc.

In defining corporate behavior, we can never overlook the issue of ethics in order to refer to the behavioral aspect of the organization. Corporate behavior involves legal rules and ethical codes of conduct. This infers that corporate behavior is based on all the components of ethics and the laws which regulate business operation of the organization. The emphasis is to understand that corporate behavior of organizations must be ethical and also be seen to be ethical.

Corporate behavior has effect not only on stakeholders and shareholders but on the economy as a whole. When organizations act ethically and socially responsibly in making its business decisions and strategic planning, then such organizations tend to become more sustainable. This can be seen in the fact that organizations that have more ethically and socially responsible corporate behavior are being looked upon as the essentials for organization’s long-term survival.

Today more and more organizations are looking at corporate behavior as encompassing the ethical, legal, economic and discretionary expectations that the society has of such organizations at any given time.

Due to this, organizations corporate behavior towards the stakeholders is becoming a much more important concept in defining business operations. Corporate behavior has and is continually becoming an important concept in organizational operations because it has to be ethical, legal and responsible behavior for the organization, stakeholders and the society at large.

Corporate behavior has more benefits to society as such it is more related to ethics. To portray sound corporate behavior, organizations must be more than a legal and ethical person alone. The organization must be socially responsible despite the fact that it is not a legal obligation, thereby providing the organization’s platform for social responsibility and invariably a more corporate behavioral culture.

As such organizations corporate behavior must be based on a behavioral pyramid, which captures its strategy and operations as it relates to – Corporate Responsibility, Ethics, Legal and Corporate Behavior.

A concept which is of growing importance for organizations today is their business reputations. This has brought about a huge challenge for organizations in realizing their corporate brands. The focus these days of stakeholders on intangible factors which organizations are using in their marketing and product/service differentiation has brought about some of these challenges. As such organizations realize that when they have or are associated to well-known brand helps drive their marketability.

The many benefits of brand recognition can be achieved when organizations ensure that they develop the right strategies towards the development of their corporate behavior and also ensure that such strategies are implemented and operated in a manner that shows transparency in their corporate responsibility, ethics and legal aspect of the corporate behavior pyramid

In conclusion, ethical behavior and ethical business operations have effects not only on the shareholders and direct stakeholders of the organization, but also the economy of the society in general. It is believed that when organizations act ethically in their business decision process, then they can ensure more effective and productive utilization of their economic resources.

Corporate behavior affects responsible and proper economic and institutional improvement. It will also be a great influence on all of society and a common benefit to the organization.

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