Why are Ethical Business Practices important?
How sustainability & business ethics keep companies ahead of the market
Welcome to the era of corporate sustainability, a time when businesses are re-evaluating how they interact with their consumers, employees and the environments in which they operate. Societies are constantly evolving and businesses must evolve in line with these social shifts. However, the relationship between corporations and society is complex and dynamic, they both have the power to influence and be influenced by one another. When there are social uprisings and people demand change, businesses must adjust to stay relevant, likewise, people are also heavily influenced by the way large corporations set industry norms.
Current business management practices demonstrate that there has been a rise in corporate social responsibility following periods of uncertainty in the global economy. Big businesses were faced with the tough reality that careless behaviour and a disregard for long-term consequences will cause irreparable harm to society, the economy and their business. Corporate leadership patterns suggest that companies have shifted their focus from merely evaluating profits, to reviewing conduct, longevity and sustainability with thoughtful and purpose-driven business leadership. Sustainable business practices will attract new customers and retain brand satisfaction by improving the customer experience and encouraging employees to be proud of their workplace. When creating a sustainable business environment it can drastically improve the brand.
Triple Bottom Line - The three pillars of sustainable business
Social responsibility is a collective understanding that we must act for the benefit of the wider community. Many organisations have incorporated ‘company values’ into their business strategy, a trend that Forbes Magazine describes as essential to integrating responsibility, humanity and respect into the corporate sector. Ethical businesses are advocating for values like ‘diversity’, ‘trust’ and ‘boldness’, traits that highlight social relationships over workflow.
Large businesses have the power to support progress and lead societal shifts so are expected to adopt sustainable business practices both internally and externally. Internally, companies can adopt sustainable management styles to foster inclusivity and diversity. Some examples include sourcing products from factories with good working environments and using recycled materials; ensuring fleets are electric or hybrid vehicles, and internal practices such as sacrificing Christmas activities for donating to customer needs. Initiatives like these ensure that business is embodying the core values and contributing to a healthy work-environment built on positive principles. Moreover, sustainable companies can also advocate for external transformations through their marketing and branding to push social change.
Embodying this, Recruit for Good is a full services recruiting agency based in Melbourne who create change through sustainable practices like donating 20% of their fees to a not-for-profit. They aim to connect people and create opportunities to help individuals and the community at large. Ultimately, it’s a business’ decision as to which values they wish to uphold, however, aligning with social causes enables companies to have a competitive advantage by staying relevant and gaining brand approval by a broader market.
Achieving economic sustainability can be done in various ways, it is a shift in perspective, meaning that a company’s goal should transform from only short-term financial gains to include long-term security and success. Every business wants to report high profits to their investors and stakeholders, however, sustainable businesses typically focus on gradual growth with less risk and a higher return in the long-run.
Economic sustainability will respect compliance processes, implementing proper governance and risk assessment. The focus should be doing business with best practice values, not taking any shortcuts to appear more profitable in the short term.
A Melbourne based café, Mansfield Produce Regional Store, took over a challenging historic building that needed adaptable solutions to upgrade equipment and meet compliance standards. The team worked with a fervent commitment to sustainability, they avoided quick ‘band-aid’ fixes and approached the problems with lasting solutions. Although it was initially a more substantial financial investment to upgrade their site, they were rewarded with a 500% revenue increase and kitchen that exceeds modern standards.
Managing finances responsibly and implementing contingency plans is a skill required by sustainable business leaders to ensure that people can maintain economic stability wherever possible. Sustainable companies strive towards a more secure future, eliminating greed and going above and beyond the law’s basic requirements.
Business leaders are now expected to be conscious of how economic decisions will impact different markets and future generations, understanding the global network and making ethical decisions. Sustainable business practices advocate for credible, reliable and balanced operations.
To preserve our natural environment and align with a widening consensus for climate action, business leaders are now required to implement strategies to make their operations and workplaces more environmentally sustainable.
With climate change becoming a central issue in the world, ethical businesses are re-evaluating their environmental impact. The Queensland Government outlines that it is critical to have a business strategy to fight climate change, from large-scale industries that cause direct harm, to smaller-scale business choices like product packaging and recycling, everyone can reduce their impact. Exemplifying this, Sprout Coffee's products are ethically sourced through Fairtrade, they carbon offset machine and business operations, recycle coffee grounds back into compost and use recycled materials for packaging wherever possible. The Reserve Bank of Australia is another example of an organisation who aims to create a positive environmental impact through responsible policies and values. One way they do this is by lending money to projects that help people and the planet including renewable energy projects and better housing development.
Business leaders are being taught that actions, whether big or small, will help repair damage and gain additional business through the rise of ‘eco-conscious shopping.' In HP Australia’s Environmental Sustainability Study they found that Australian consumers are looking toward companies to take action and have an environmental sustainability plan in place. It is in both the business’s and the world’s interest to implement environmentally sustainable business practices.
How does Griffith University’s online MBA prepare the next generation to create social enterprises and improve corporate sustainability?
To navigate this shift into sustainable business management, ethical companies need forward-thinking leaders who are equipped to deal with modern-day business challenges. Griffith’s online MBA has been specifically designed to tackle these issues, with a clear focus on sustainable business and corporate social responsibility. Offering units like ‘Sustainability: Adaptive Thinking’, ‘Innovation for Impact’ and ‘Leadership: Responsibility and Change’, the program produces leaders who are well-placed to meet business’s triple bottom line. This course consistently ranks as a top online MBA in the country. An MBA in sustainability will allow you to fulfil your career goals and take a meaningful step forward.
For more information about studying Griffith's online Master of Business Administration call us on 1300 737 945 or book a call with an Advisor today.