Why are ethics and social responsibility important in business?
By: Juan Carlos
Tags: Business, Ethics, Values, Change, Social Change

I will start explaining my experience with business management where I worked into the aeronautical sector and the luxury services market. Two of the less concerned sectors with ethics and social responsibility.

The first of them till the pandemic exploited, they promoted a model of thousands of flights a day by offering low prices to engage more public without caring about pollution. And referred to the luxury market the people who take part is 0 concerned about the global situation. As they live in a kind of a bubble as they are millionaires, and they do what they want when they want without thinking about the consequences. They use high powered cars that consume a lot of gas, yachts that pollutes the sea, private flights that pollutes the air, they buy things that they don’t really need every day, they build big houses in different places of the world and in the most privileged spots without minding the natural environment, and the biggest signal of lack of ethics is that they take advantage of people from poor countries to use them as low class workers for their basic needs.

So now that we have a context on how some sectors act and how far we are from the objective of a sustainable world. Let’s go deep into the topic of ethics and social responsibility in business and why it’s important.

Ethics “a system of moral principles that leads the decisions of a person.” This definition can be applied to companies too as any of them needs to have a list of priorities that drives the day to day operations and influence all the decisions for the future that the board of directors take in big companies or the CEO in the case of small companies or startups.

Social responsibility is very related to ethics as it is an ethical theory in which individuals are accountable for fulfilling their civic duty, and the actions of an individual must benefit the whole of society. For this theory to work we need to be concerned about maintaining a balance between economic growth and social welfare. Applying this to business we need to have committed companies to change the world for better and to accomplish this we need the collaboration of all the actors involved in the market: companies that propose sustainable business models, governments and regulators that promote social responsible businesses by creating a special aid program for these type of companies, investors who support entrepreneurs with their ideas to have a better and more equal world and consumers that decide to buy the products and services of companies that are committed to change.

All these words sound incredibly good and it looks like it’s quite easy to apply to the real world. The problem comes when just one company don’t act in an ethical way to maximize the benefits and to have better financial results. That’s what moves the other companies to act in the same way because if not they will be a worse company under the point of view of investors. A CEO of a multinational company don’t want to be that person who minimized the benefits or provoked lower prices of the shares by taking actions that were better for the rest of the world, because the most probable is that he/she will lose the job but it would not be his/her fault it would be the fault of the shareholders and the rest of the companies that didn’t act in an ethical way to overtake the competence in financial terms.

In conclusion ethics and social responsibility are 2 of the most important things to have into account at the time of making business because the companies run the world and if we, the next generation of founders and managers, are not concerned about the danger of not being socially committed we will destroy our world by sacrificing live quality for money. We need to have the mindset to act as a team and to think in all the positives things that we can achieve by acting in an ethical way all together because one person can do a lot but a whole society can change the world.