3.03 – Doing The Right Thing
Ethical lapses by company leaders often lead to significant scandals. These events can make one wonder whether those in charge know the difference between right and wrong or if they even care. However, many business leaders do understand and value ethics, recognizing that ethical behavior is not only politically correct but also beneficial for the bottom line.
Defining Ethics on the Job
Ethics are the standards of beliefs and values that guide conduct, behavior, and activities. Essentially, ethics are about doing the right thing. While individuals bring their own sense of ethics to the job, organizations and leaders are responsible for setting clear ethical standards.
High ethical standards typically involve the following qualities and behaviors:
- Accountability
- Dedication
- Fairness
- Honesty
- Impartiality
- Integrity
- Loyalty
- Responsibility
Ethical behavior starts with leadership. As a business owner, your actions set the tone for your organization. If you behave unethically, it signals to your employees that ethics don’t matter, and they will likely follow suit. Conversely, ethical behavior from you encourages the same from your team, reinforcing and potentially improving your own ethical standards.
Creating a Code of Ethics
While many people have a basic understanding of what is ethical and what is not, interpretations can vary. A code of ethics helps standardize expectations and provides clear guidelines for behavior.
A code of ethics complements company policies and procedures by clearly outlining acceptable and unacceptable behaviors, such as prohibiting stealing, sharing trade secrets, and sexual harassment. Requiring employees to read and sign the code ensures they understand the ethical standards expected of them.
Four Key Areas of a Code of Ethics
- Compliance with Internal Policies and Procedures
- Compliance with External Laws and Regulations
- Direction from Organizational Values
- Direction from Individual Values
A comprehensive code of ethics should address specific issues, including:
- Conflicts of Interest
- Diversity
- Employee Health and Safety
- Equal Opportunity
- Gifts and Gratuities
- Privacy and Confidentiality
- Sexual Harassment
Beyond internal use, a well-crafted code of ethics can publicize your company’s standards and values to external parties like vendors, clients, customers, investors, job applicants, the media, and the general public. However, a code of ethics is only effective if it is actively followed and not just filed away.
Making Ethical Choices Every Day
Ethical challenges are common in business, and not all are covered by the code of ethics. Here are some scenarios to consider:
- A favorite employee gives you tickets to a baseball game.
- An employee asks you to overlook a moderate infraction of company policies.
- You sold a product that you later found out is faulty, but the client is unaware.
- Your star employee did not graduate from college, as claimed in their job application.
- A product you sell doesn’t fully meet the claims made about it.
To navigate these challenges, consider the following framework for making better ethical choices:
- Evaluate Circumstances Through Appropriate Filters: These filters include culture, laws, policies, circumstances, relationships, politics, perception, emotions, values, bias, and religion.
- Treat People and Issues Fairly: Fairness doesn’t always mean equality. Apply established boundaries consistently.
- Hesitate Before Making Critical Decisions: Take a moment to reflect before acting.
- Inform Those Affected: Communicate the standards or decisions to those impacted.
- Create an Environment of Consistency: Ensure consistency in actions and decisions within your team.
- Seek Counsel When in Doubt: Consult honest and respected individuals when unsure about an ethical decision.
By adhering to these principles, you can navigate ethical dilemmas effectively, maintaining integrity and trust within your organization.
