Why is it so important to take ethical considerations into account when developing the strategy for the firm? This article explores three key reasons to consider ethical issues when developing your strategy.
Reason 1: Strategy involves some of the biggest decision for the firm
The first reason why ethical considerations are important in strategy is that strategy involves some of the biggest decisions of the firm. A company’s strategy sets the direction of so many decisions that interconnect with it. Decisions made when setting the firm’s strategy thus have a much greater influence on the overall direction of the company than any individual decisions that fall underneath it. For ethical considerations to be incorporated in the actions of the business, it is thus important that they are taken into account when developing the strategy for the firm.
Reason 2: There may be a business case to be hade for ethical decision making
The next reason why it is important to consider ethical decisions when setting the strategy of the business is that there may be opportunities from behaving ethically. While a profit motive is not the only reason that firms may want to behave ethically – doing so may simply be the right thing to do – there may be additional opportunities that come from going above the standards of other firms.
Creating a reputation for ethical decision-making may for example help attract customers and employees. The conditions involved in sourcing and manufacturing are increasingly a concern to both consumers and employees, and thus taking a leading role in ‘doing good’ may help the firm grow.
Reason 3: Sets the direction for employee decision making
The final reason why it is important to take ethical decision-making into account with the firm’s strategy is that it can help ensure that the actions of lower employees are aligned with the overall values of the company. The strategy sets the tone for the business, and if ethical considerations are ignored at this stage, this may result in lower employees also ignoring ethical considerations when making their decisions. Setting the tone at the top of the firm can thus play a role in ensuring that ethics is taken seriously in other parts of the business.k