Despite what some people think, owning and managing a business is not completely about making money, and there are many non-financial factors that influence the success (or failure) of a business even in its financial objectives. Employee morale, lines of communication, and company ethics are all critical to the success of a business. Perhaps the best way to understand some of these factors is to examine scenarios in which they are operative.
Take, for instance, an employee who is dissatisfied with their job. This employee plods through the day, miserable and upset. They work slowly and inefficiently, not really caring all that much about the quality of their work but rather just trying to get to quitting time. This employee is not going to give the company their best work. Now think about what would happen if many employees in a business had this kind of low morale. Production would falter. Sales would slip. Quality would drop and all because employees didn't care and didn't put in their highest efforts. This would ultimately affect the company's financial bottom line negatively.
Now think about the lines of communication within a business. If bosses do not clearly communicate their expectations, if policies are not understandable or accessible, if employees feel constrained in talking to their managers, company efficiency will falter. Employees will not understand the necessities of their jobs and may not even be properly trained. If they run into problems, they may feel as if they have no one to whom they can turn with questions or difficulties. If quality and behavioral standards are not clear, employees may not work up to their best levels. We can see how this would affect a company's productivity and financial outcome.
Further, if a company's ethics are shaky and if employee ethics are not set forth clearly or enforced, major problems can arise. Incidents of dishonesty and poor moral choices may start small, but if they are not curbed, they can develop into cases of embezzlement, fraud, stealing, employee mistreatment, etc. These kinds of problems snowball quickly into financial losses and worse.
So far we've concentrated on the negative sides of these issues, but if we think about the positive sides for a moment, we can see that good employee morale, communications, and ethical standards will contribute to a company's financial success. Happy employees work harder and more efficiently. Good communication leads to better knowledge of expectations and higher job satisfaction. Clear ethical standards that are fairly enforced keep everyone honest and open. This leads to greater efficiency, higher productivity, and larger profits.