4 reasons why honesty is critical for business success


A business is only as successful if it can attract customers to buy its products or services. If a company cannot attract people to turn to them to fulfill their needs, they won't be able to profit and flourish.


There are many good reasons why organizations should act with strong integrity, but essentially it can come down to four critical reasons why organizational success is inherently dependent upon honesty.

Image credit: Maialisa via Pixabay

1. Company reputation

One of a company's best assets is its reputation. When people hear the words “corporate scandal”, typically their minds immediately wander to some of the huge scandals that have taken place in the past decade. Those with responsibility did not act with honesty or integrity, both important to a company's reputation. Without it, it won't be trusted and consumers won't feel confident buying its products. Investors won't want to stake their cash in the company either.

Once a brand name loses credibility, its bottom line begins to lose reliability too. If a company’s members become known as cheats, liars or ripping off customers, people aren't going to want to deal with the business.

2. Employee morale

Employees feel the pressure if the company they work for becomes immersed in scandal or unscrupulous behavior. Organizational behaviorists strongly suggest decreased morale impacts profitability. If employees feel as if they are being viewed as corrupt because of their management's reputation, or worse, their managers expect them to commit unethical acts, this is undoubtedly going to affect both their persona and their morale.

Unhappy employees aren't going to be high performers and if the situation drags on indefinitely, ultimately, this lack of productivity will contribute to company financial problems because the company is not operating at its strongest capabilities.

3. Customer trust

Without securing customer trust, a company cannot effectively sell products or services because consumers will simply turn to competitors who have an honest standing. All it takes is one bad experience from a customer and reviews can land all over the Internet. 

Additionally, a customer who experiences a negative transaction is not bound to forget this experience any time soon. After all, who wants to spend their money in a business that acts unethically? How will consumers feel confident they'll be buying a good product or service that will uphold a guarantee? Bottom line is, they won't. They'll feel better doing business with a reputable competitor.

4. Self-preservation

Dishonest management is going to breed fraudulent employees. If executives are setting the example that acting unethical and dishonest is acceptable, it’s possible some employees are going to follow this lead. Some employees may see this attitude as reason enough to commit fraud within the company. They may steal supplies, commit unauthorized use of funds or equipment or flat out steal or embezzle money from the business. After all, it's what they've been taught. If honest employees are wanted, there has to be a good example to follow. In this respect, honesty is extremely important for organizational success.


In many ways, honesty is critical for organizational success. What comes around goes around - and those businesses that opt to aim for the dishonest and quick buck are probably going to lose out on profitability opportunities in the future.

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