Understanding the Principles of Ethics in Business
7 Min Read
As chatbots and other AI-driven tools rise to prominence, companies are racing to use them to gain a competitive advantage. This might change the ways people conduct business, but one thing remains the same — the need to adhere to ethical principles in business.
What are business ethics? Investopedia defines this term as “the moral principles, policies and values that govern the way companies and individuals engage in business activity.” Put simply, maximizing revenues shouldn’t preclude doing what’s right.
Business ethics are not necessarily legally binding. Instead, they are self-governed behaviors based on exemplary standards and, in many cases, company policies. Dr. Melanie Zollner, an assistant professor in our Department of Business Administration, contextualized the legal and ethical boundaries using the following axiom:
“Where the law ends, ethics begins.”
What Are Examples of Ethical Principles in Business?
There are numerous ethical principles to learn as you advance in business. That’s why New Mexico Highlands University incorporates ethics throughout the curriculum for our online MBA degree. This emphasis will help you understand the importance of ethics in business and embody them during your career.
Honesty
Brands face stiff competition in our global economy, and it’s wise to look for opportunities to get ahead. But that doesn’t give license to cut corners with the truth. Instead, businesses must strive for honesty across their operations, such as:
- Providing accurate product descriptions.
- Avoiding misleading statements during customer service interactions.
- Keeping the promises they make in advertising.
In addition to being the right thing to do, honesty helps strengthen connections between customers and companies, which can lead to repeat sales. Conversely, Dr. Zollner cautioned that businesses risk losing customers if they fall short of those standards.
“People can go somewhere else and purchase a different product or service from another company,” she said. “Once an organization loses that trust, it’s very hard to build back.”
The numbers back up that statement, as a Qualtrics survey found that 65% of people have stopped purchasing from brands that failed to meet their promises.
Respect
Professionals who treat each other respectfully — with kindness and support for one another’s contributions — create an environment focused on shared success. For instance, a HubSpot post explores how respect in the workplace helps improve productivity, foster innovation and promote collaboration.
Researchers at the Center for Creative Leadership found that workers throughout the world consider respect a “critical leadership responsibility.” By satisfying this ethical principle, organizations can build admiration with customers and confidence among teammates.
Integrity
Acting with integrity expands on the ethical principles we have discussed so far. It requires you to bring honesty and respect to every customer interaction, every meeting and every task — every workday.
Not only that, but you cannot expect credit for working with integrity. Diligent, a software company focusing on ESG and compliance, framed integrity as “doing the right thing even when nobody is watching.”
In other words, act properly to the benefit of your customers and stakeholders, not for your personal gain.
Loyalty
Acting with integrity can occur out of sight, but loyalty is an ethical principle to put on display. It means standing by the people in your business life, and it delivers benefits to those who give and receive loyalty. For example, loyalty can:
- Turn consumers into advocates for your company, according to a Forbes Communications Council article.
- Improve worker productivity and retention, two reasons GBS Corporate Training characterized loyalty as a manager’s “most important resource.”
Loyalty to your supervisor matters, but it shouldn’t usurp other ethical principles. A study in the journal Organizational Behavior and Human Decision Processes highlighted how people are more likely to accept unethical demands from leaders who previously asked for loyalty.
This risk reinforces the value of learning principles of ethics. In addition to providing signposts for proper business behavior, you’ll recognize when someone attempts to lead you astray.
Transparency
Transparent companies build on the principle of honesty, showing they don’t just talk the ethical talk, but walk the ethical walk. A Shopify article noted that brands establish trust with customers when they “pull back the curtain” on the processes behind developing products and filling positions.
Of course, transparency isn’t limited to customer relations. According to Strategic Finance, businesses must also bake transparency into their culture. That means keeping workers informed about everything from short-term performance to long-term strategies.
Dr. Zollner noted that platforms like Facebook and TikTok are powerful tools for spotlighting unethical behavior. “With social media, if an organization behaves unethically, we are all going to know pretty quickly,” she said. So, individuals have the chance to promote transparency even when organizations fall short of that principle.
Opportunities for Strengthening Ethics in Business
Learning business ethics is just one part of your professional journey. As your career advances, it’s important to seek ways to champion principles of ethics at your organization. Here are three opportunities for doing just that:
Be Proactive
Innovative technologies offer new ways to conduct business. But chatbots and other advancements present as many risks as opportunities, raising the need for organizations to update their ethical policies to account for these tools.
“These tools can suffer from hallucinations and also provide information that is not accurate,” Dr. Zollner said. Based on these shortcomings, organizations must be proactive in examining these technologies, understanding how they work and setting policies for using them ethically.
Hold Leaders to High Standards
Dr. Zollner feels that ethical business leaders set the tone for other workers at each organization. “If you want to build a positive relationship with your stakeholders, it’s important to define your values and act on them starting from the top, with accountability for all,” she said.
Ethical leadership sets a positive example for professionals just beginning their careers. After all, entry-level workers see leaders as mentors. When those role models forgo ethical or moral business behavior, others might take that as permission to do the same.
Commit to the Triple Bottom Line
When teaching MBA courses online, Dr. Zollner encourages students to think about more than generating revenue. “Some believe the goal of organizations is just profit and thinking about shareholders. But I like to talk about how organizations should focus on the triple bottom line,” she said.
IBM described the triple bottom line as the “three Ps: people, planet and profit.” Embracing this mindset means considering more than increasing revenue. As Dr. Zollner said, organizations must also “think about society, the environment and the impact they have economically.”
Achieve Results as an Ethical Business Professional
Dr. Zollner believes it’s important to ensure everyone — from entry-level professionals to business owners — understands and practices ethical principles. Toward that end, New Mexico Highlands University emphasizes ethics throughout our online MBA program.
Of course, learning the principles of ethics is just one aspect of the excellence you’ll experience while completing our ACBSP-accredited MBA. Our expert faculty members emphasize intensive problem-solving during each class, sharing business case studies and simulations that prepare you to hit the ground running in your career after graduation.
Our MBA program appeals to professionals with varying goals, as you can choose from multiple electives and concentrations in Entrepreneurship and Healthcare Administration. As you pursue your master’s degree online, you’ll engage in comprehensive coursework with added flexibility for fitting your education into your schedule. If you want to learn more, request information today.
Melanie C. Zollner, Ed.D., Assistant Professor, Department of Business Administration
Melanie C. Zollner, Ed.D., is an assistant professor in the School of Business, Media, and Technology in the Department of Business Administration at New Mexico Highlands University.
As part of the business department, Dr. Zollner represented the NMHU School of Business in the Ethics Champion Program from 2019 to 2021. The ethics workshop provides Highlands University students with an opportunity to engage with business community members and learn more about what business ethics means in the business world. Dr. Zollner mentored students for the New Mexico Business Ethics Case Competition, where her mentees earned second place in 2017 and first place in 2019, the most recent year the competition was held.
Dr. Zollner enjoys teaching at New Mexico Highlands University and strongly believes students benefit from small class sizes and one-on-one relationships with diverse faculty. She is committed to helping prepare students as competent, ethical and responsible individuals.
- Ed.D. in Educational Leadership, University of New Mexico
- MBA, New Mexico Highlands University