INTEGRATING BUSINESS ETHICS AND BUSINESS STRATEGY
Keywords:
business ethics, business strategy, company, strategic managementAbstract
Business ethics includes norms and rules of conduct that operate within the company in the form of a code of ethics. Organizations gain a reputation through ethical behavior based on their employees’ actions. Strategic management involves specifying the organizational mission, vision and goals; examining the internal strengths and weaknesses of the company, as well as external opportunities and threats coming from the external environment; developing policies and plans designed to achieve company's goals; allocating resources to implement these policies and plans and creating sustainable, long-term value for all company’s stakeholders. Many contributions to business ethics and strategic management have specifically focused on the relationship between the two concepts. Corporate strategy must be built on the base of the ethical judgment. Leadership is a key factor that determines whether a company is capable of successfully integrating ethics into business strategy. In the literature on leadership, full attention is paid to the importance of ethical qualities of managers. Managers moral competencies are considered a source of competitive advantage. Effective and dynamic ethical leadership can contribute to creating a corporate culture that will support ethical behavior and maintaining firm’s good reputation and promoting integrity by upholding the company’s values through its business and day-to-day decisions. Ethical decision-making is related to the internal organizational decisions of individuals or social groups about socially acceptable behavior. Ethics can play a significant role in proposing new business models that promote a business vision that extends beyond the economic sphere to encompass a range of social and environmental issues. Current trends in corporate social responsibility and sustainability show how these concepts can act as factors of innovation and as sources of competitive advantage for firms. Business ethics have long been considered a stumbling block in the field of strategic management. However, numerous authors have contributed their research to the fact that business ethics is one of the important components during the early development of corporate strategy and should be included in business strategy. In the last decades of the twentieth century, after strong movements that supported the concept of business ethics, many authors showed interest in the relationship between ethics and business strategy. This trend has continued to this day, especially with the growing importance of social issues for society. There is a growing consensus among researchers that companies wishing to survive in the market need to integrate ethics into all aspects of their strategy, including social and environmental issues and company strategy.
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