THE BENEFITS OF BUSINESS ETHICS

The field of business ethics continues to change rapidly as more firms recognize the bene- fits of improving ethical conduct and the link between business ethics and financial perfor- mance. Both research and examples from the business world demonstrate that building an ethical reputation among employees, customers, and the general public pays off. Figure 1–2 provides an overview of the relationship between business ethics and organizational per- formance. Although we believe there are many practical benefits to being ethical, many businesspeople make decisions because they believe a particular course of action is sim- ply the right thing to do as responsible members of society. Granite Construction earned a place in Ethisphere ’s “World’s Most Ethical Companies” for four consecutive years as a result of its integration of ethics into the company culture. Granite formulated its ethics program to comply with the Federal Sentencing Guidelines for Organizations and helped inspire the Construction Industry Ethics and Compliance Initiative. To ensure all com- pany employees are familiar with Granite’s high ethical standards, the firm holds six man- datory training sessions annually, conducts ethics and compliance audits, and uses field compliance officers to make certain ethical conduct is taking place throughout the entire

23715_ch01_ptg01_hr_001-027.indd 1523715_ch01_ptg01_hr_001-027.indd 15 25/10/13 5:19 PM25/10/13 5:19 PM

Copyright 201 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).

Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

16 Part 1: An Overview of Business Ethics

organization. 35 Among the rewards for being more ethical and socially responsible in busi- ness are increased efficiency in daily operations, greater employee commitment, increased investor willingness to entrust funds, improved customer trust and satisfaction, and better financial performance. The reputation of a company has a major effect on its relationships with employees, investors, customers, and many other parties.