What Are Business Principles?

“We live in an age in which the fundamental principles to which we subscribe—liberty, equality and justice for all—are encountering extraordinary challenges ... But it is also an age in which we can join hands with others who hold to those principles and face similar challenges." So said Ruth Bader Ginsburg (1933-2020), Associate Justice of the United States Supreme Court.

What are your principles? What constitutes, as Merriam-Webster defines it, the “comprehensive and fundamental law, doctrine, or assumption” or the “rule or code of conduct”¹ by which you choose to live and interact with other people?

Our principles develop as we mature, of course, and are shaped by time, education and experience. They influence the choices by which we nurture families, form organizations, build communities and conduct business. A person’s principles are the basis upon which business principles grow, so we must start with the former when examining the latter.

To clarify the difference between principles and values, consider this, paraphrased from the Josephson Institute of Ethics: Ethical values, when translated into active language establishing standards for the behavior in which a person should and should not engage, are ethical principles.² By this interpretation, principles are values put into action.

The values and principles that follow here incorporate guidelines typically associated with ethical behavior:

• Honesty: being truthful in all dealings, without deliberately misleading or deceiving others through misrepresentation, overstatement, partial truth, selective omission or any other means
• Integrity: living by the courage of one’s convictions; acting on and fighting for beliefs, even when pressured to do otherwise; living with honor, without being hypocritical or unscrupulous, or sacrificing principle for expedience
• Trustworthiness: being candid and forthcoming in supplying relevant information and correcting misapprehensions of fact; making every reasonable effort to fulfill the letter and spirit of promises and commitments
• Loyalty: demonstrating fidelity to persons and institutions through friendship in adversity, support, and devotion to duty; not disclosing information learned in confidence for personal advantage
• Fairness: refraining from exercising power arbitrarily or using overreaching or indecent means to gain or maintain any advantage; refraining from taking undue advantage of another’s mistakes or difficulties; living with an open mind, a commitment to justice, diversity and the equal treatment of individuals, and the willingness to admit mistakes and, where appropriate, change positions and beliefs
• Concern for others: living by the Golden Rule, with care, compassion and kindness; helping those in need and pursuing objectives in ways that cause the least harm and the greatest good
• Respect for others: demonstrating honor for the human dignity, autonomy, privacy, rights and interests of all; treating all people courteously, with equal dignity
• Adherence to the law: abiding by laws, rules and regulations
• Accountability: acknowledging and accepting personal responsibility for the ethical quality of one’s choices

It’s easy to see how we can expand personal principles and apply them to our working lives. The Josephson Institute, for example, extends some of the principles above, as noted in italics here, to address professional behavior:

Trustworthiness: being candid and forthcoming in supplying relevant information and correcting misapprehensions of fact; making every reasonable effort to fulfill the letter and spirit of promises and commitments. “[Trustworthy people] do not interpret agreements in an unreasonably technical or legalistic manner in order to rationalize non-compliance or create justifications for escaping their commitments.”²

Loyalty: demonstrating fidelity to persons and institutions through friendship in adversity, support, and devotion to duty; not disclosing information learned in confidence for personal advantage. “[Loyal people] safeguard the ability to make independent professional judgments by scrupulously avoiding undue influences and conflicts of interest. They are loyal to their companies and colleagues and if they decide to accept other employment, they provide reasonable notice, respect the proprietary information of their former employer, and refuse to engage in any activities that take undue advantage of their previous positions.”²

Their list goes on to include several principles that specifically address conduct in business leadership:

"Commitment to excellence: Ethical executives pursue excellence in performing their duties, are well informed and prepared, and constantly endeavor to increase their proficiency in all areas of responsibility.

Leadership: Ethical executives are conscious of the responsibilities and opportunities of their position of leadership and seek to be positive ethical role models by their own conduct and by helping to create an environment in which principled reasoning and ethical decision-making are highly prized.

Reputation and morale: Ethical executives seek to protect and build [their] company’s good reputation and the morale of its employees by engaging in no conduct that might undermine respect and by taking whatever actions are necessary to correct or prevent inappropriate conduct of others."²

A quick Google search yields diverse articles espousing various principles for any one field of pursuit. The Seven Principles of Design, for example, appears just a few entries above The 13 Principles of Design and How to Apply Them. Similarly, Top 20 Principles for Pre-K-to-12 Education follows closely behind Seven Principles for Good Teaching.

The business world shows itself in similar colors. In his article, 10 Principles for Business Success, Dr. John Demartini recommends that those wishing to build a successful business:

1. "Identify a human’s social need.
2. Be enthused and inspired.
3. Identify what priorities fulfill those needs.
4. Delegate low-priority items.
5. Maximize profits.
6. Build and sustain an adequate liquid savings cushion.
7. Invest.
8. Consider your customers’ and employees’ highest values.
9. [Determine] your and your company’s vision.
10. Conduct research and innovate."³

The same results list offers, among many other titles, the similarly named 10 Principles of Business Success, Five Business Principles and The Four Principles of Enduring Success by Christian Stadler:

1. "Exploit before you explore.
2. Diversify your business portfolio.
3. Remember your mistakes.
4. Be conservative about change."⁴

Clearly, there is no single, definitive list of business principles. While many values and principles may be shared throughout an industry, each business is defined by its own guiding principles, as the individuals who create and lead it are defined by theirs. In that reality lies the chance to make each business entity unique and deeply personal. Your career in business leadership is a long-term opportunity to shape and refine the way business is transacted within your own company and the professional community at large.

Meticulously crafted course content is only one of the ways in which William & Mary’s Online MBA program prepares you for a revolutionary future as an innovative business leader. Learn more about the renowned faculty of the Raymond A. Mason School of Business and explore our residency experience. We are here to answer your questions, so plan your appointment with an Admissions Advisor today.

Sources:
<sup>1. Retrieved on September 20, 2021, from merriam-webster.com/dictionary/principle
2. Retrieved on September 20, 2021, from josephsononbusinessethics.com/2010/12/12-ethical-principles-for-business-executives/
3. Retrieved on September 20, 2021, from entrepreneur.com/article/335156
4. Retrieved on September 20, 2021, from hbr.org/2007/07/the-four-principles-of-enduring-success</sup>