Why is ethics important in business management?

Effective business management isn’t just about meeting or exceeding financial and business goals. In today’s globalised world, it’s also about successfully addressing key contemporary issues such as sustainability, discrimination, and corporate social responsibility. 

Consistent adherence to sound ethics is fundamental to successful business management, ongoing customer trust and loyalty, and business reputation.  

This means, to thrive, business managers not only need to have in-depth knowledge and practical skills related to business management, but also related to ethical issues and how to manage businesses ethically. 

Learn more about the responsibilities of a business manager:

What is business ethics? 

Essentially, business ethics are the moral principles, policies and practices that underpin an organisation and guide its conduct, operations, and staff. 

Business ethics play an important part in promoting trust and integrity among an organisation’s staff, as well as in safeguarding its reputation among key stakeholders such as suppliers, investors, and customers. 

Because of its importance in an organisation’s success, most organisations – no matter their location, size, or industry – have implemented measures and programmes around business ethics in their day-to-day management. 

Ethics is so important in business management because it can very quickly mean the difference between an organisation’s success and its downfall. When managed well and successful at addressing ethical issues, organisations can thrive in today’s society and enjoy a solid reputation among customers, investors and other key stakeholders alike.

Conversely, when organisations fail to effectively address today’s ethical issues, or don’t attempt to address them at all due to a lack of understanding, they can soon find themselves losing trust and integrity among their key stakeholders, tarnishing their reputation and ultimately leading to their failure.  

Types of business management ethics 

There are various types of business management ethics organisations can adopt, and these largely depend on the size, location, and operations of the individual organisation. 

Some common types of business management ethics organisations worldwide aim to embrace include: 

Corporate social responsibility (CSR)

Businesses are not only responsible for the economic outcomes of their operations, but also for their impacts on society and the environment and their implications. Depending on the organisation and their operations, size, and location, CSR can include addressing issues around human rights, discrimination, and climate change, as well as operating within local regulatory and cultural frameworks. 

Personal responsibility

All employees working within an organisation – no matter their role or level – will be expected to adhere to any ethical policies, practices, and principles in place within an organisation. They will also all be expected to complete tasks assigned to them and fulfil the responsibilities of their role. These form part of all staff members’ personal responsibility within an organisation. 

Trust

An organisation’s success is predominately built on trust – among its staff, investors, customers, and other key stakeholders alike. Businesses build trust among their stakeholders by embracing fundamental traits such as transparency, honesty, respect, and accountability. When a business is trustworthy, it gives stakeholders confidence to deal with them regularly, and it maintains their good reputation.

Benefits of ethics in business management 

Since they play such a vital role in an organisation’s success, there are many benefits of ethics in business management. 

Some of the benefits of upholding ethics in business management include: 

• Effectively adhering to applicable local laws 

• Encouraging loyalty among staff, consumers, and other stakeholders 

• Maintaining a good reputation 

• Contributing positively to the sustainability of the environment 

Ultimately, these benefits all add up to a successful and thriving business – both now and into the future. 

How can a degree help you understand business ethics? 

In today’s globalised world and its ever-evolving challenges and environments, business ethics is a complex area. Applying business ethics effectively when managing a business requires both a solid understanding of its theory and its practical application in the day-to-day operations of the business. 

A degree can significantly boost your understanding and expertise in business ethics and its application, helping to launch your career in business management, or to take that exciting next step in your career.  

Some of the key knowledge and skills related to business ethics you’ll gain through a degree include: 

• Sustainability in business and other contemporary business issues 

• Managing people effectively 

• Understanding business and financial information 

• Organisational behaviour and culture 

Equipped with in-depth knowledge, understanding and skills in these areas and more, you’ll be well-placed to position yourself as a highly-proficient, in-demand business manager in the global job market. 

If you’re looking to launch your career as a business manager, or to take the next step in your business management career, discover how Cambridge Education Group's BA (Hons) Business Management (validated by London South Bank University) can position you as highly sought-after business manager in today’s global job market.