Why Honesty Is Important In Business

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In a day and age where intangible human traits that are marks of integrity are sometimes ignored or cast aside in favor of cutthroat, performance-first mindsets, honesty is often underestimated in its relevance and importance, especially in the business world. After all, why should an executive be honest when “cooking the books” to reflect their accounting differently can make a company appear more profitable than it truly is, thus provoking more investors? Despite examples like this, honesty is critical for organizational success for a few key reasons.

Interoffice Communication

Whether a business employees two people or two hundred, it is essential that they communicate in transparent, trustworthy ways. Considering the obvious importance of effective communication, honesty forms an integral part, ensuring that every bit of information transferred between each other is a fact and not a piece of damaging fiction.

The consequences of a lack of honest in interoffice communications include a hostile work environment, a loss of trust among co-workers, employees vying for more individual opportunities rather than valuing teamwork, and an overall loss in morale, which can negatively impact productivity.

Vendor Relations

Companies relay several kinds of information to vendors, often increasing in the sensitivity of such messages as these relations improve and deepen. For example, although at first inquiring organizations may simply request prices and offer basic ideas of their needs, eventually they may share current inventory marks, future supply-sensitive projects, marketing calendars, and other tidbits that, in a mutually honest relationship, can service both parties.

However, the risk of lying to a vendor in order to land a better deal (such as promising a later contract for a cheap run now, only to pull out the next month in favor of another target) or other half-truth wrangling comes at the simple cost of burning bridges. One that vendor is burned, and will likely never deal with the organization again, that represents one less resource the business can use in order to meet its objectives.

Public Image

The idea of this one is simple: People tend not to be especially fond of liars. Although the downfall of, say, Enron was due to much more than a public relations meltdown, that tertiary consequence of their lying and book-cooking would certainly have been a tremendous hurdle to their long-term recovery, had one bothered to have been attempted.

In the end, all things considered, the old adage holds true: “Honesty is the best policy.” It turns out this is applies to both corporate and personal policies, critical to both organizational success and human integrity.

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