Business ethics is the application of values in the daily operations of a business. Ethics influence the conduct of individuals in a business and also the conduct of the entire organisation. Business ethics surpass legal requirements and they influence the intrinsic behaviours of a business. Effective ethics policies are important for small businesses. They maximise profits and curb disruptions and conflicts that can derail business growth (Painter-Morland, 2010). This paper shall examine the essential components of an ethics policy favourable for small business.
An effective ethics policy must have values. These are set standards that are articulated in terms of how a business conducts its daily activities (Painter-Morland, 2010). The values touch on interactions between employees, suppliers and clients. These values include honesty, respect and fairness.
An ethics policy should have clear principles. They are statements that should be followed by all individuals in the business. They serve to strengthen the established values. The principles can include customer satisfaction and continuous improvement of products (McKinney et al., 2012).
An effective policy must have a statement that bears the ethical responsibility of every individual in the business. It should also indicate the consequences of violation of the ethical policy.
The policy must demonstrate the presence of support from the top management. It should also establish a clear channel of communication for reporting unethical practices without victimisation. To achieve this, small business managers can hang the policy at multiple places in their premises with their signatures.
Small businesses have the ability to shape their ethical practices due to the small number of employees and less complicated engagements (Painter-Morland, 2010). The policies should have clear values, business principles, show personal responsibility and support by the management.
Longenecker, J. G., Moore, C. W., Petty, J. W., & McKinney, L. E. (2012). Ethical Attitudes in Small Businesses and Large Corporations: Theory and Empirical Findings from a Tracking Study Spanning Three Decades. Hankamer School of Business, Baylor University, 1-38. Retrieved from: http://www.mubs.ac.ug/procdocs/Moral%20Distress/Ethics_WashingtonDC_Paper_05.16.05.pdf Painter-Morland, M. (2010). Ethics in Small and Medium Sized Enterprises: A Global Commentary. London: Springer.