Implementing Business Ethics
Add an article Back to list
We
hear a lot these days about the deterioration of ethics in business, e.g.,
graft, corruption, cheating, favoritism, skimming money, etc. This has
resulted in a public relations nightmare for business. If consumers do not
trust a company, its a matter of time before it goes out of business. This is
supported by recent studies that give evidence there is a correlation between
business performance and ethical practices (see the
Institute of Business Ethics).Basically,
the Institute's study suggests there are long-term benefits associated with
enacting an ethics programs. Such studies and recent corporate snafus (e.g.,
Enron) are impetus for companies coming to grips with ethics in the workplace.
There are essentially two considerations for devising an
ethics program in business; first, knowing what your ethics are, and, second;
implementing them in a consistent manner.
INTERPRETING ETHICS
There is little point in my telling you what is ethically
right or wrong. You already have an interpretation of this. But let us
understand what influences our interpretation of ethics; our interpersonal
relations with others, such as our family, friends, neighbors, fellow workers,
as well as the media. Ethics is learned more than it is taught. It is based on
observations of the conduct of others, people we like and respect as opposed
to those we do not. It is then up to each of us to interpret these perceptions
from which we will base our conduct and behavior. The point is, we act on our
perceptions, however accurate or inaccurate they may be. Another influential
factor are our own human frailties of competitiveness, love, greed and
ambition. But then again, this goes back to interpersonal relations.
Let us recognize that ethical behavior is interpreted
differently from person to person. What one person may consider right or wrong
may be different for the next person. The objective in business is to
implement a uniform form of behavior thereby instilling consumer confidence in
a company overall.
IMPLEMENTATION
Writing a corporate code of conduct is in vogue today as a
means of articulating the ethics of a business. Such codes are proudly
displayed on web sites and in corporate brochures more for public relations
than anything else. True, they are useful for disciplining an employee for an
infraction of the rules, but I do not see them as an effective way of
implementing an ethics program. Understand this, regardless of what the code
of conduct states, the ethics of a business are whatever the top-dog says they
are. Too often I have seen companies say one thing, then act another, e.g.,
Enron.
Printed codes of conduct are nice, but we have to recognize
that it is one thing to enact legislation, quite another to enforce it. As
stated earlier, ethical behavior is based on observations. Regardless of what
a code of conduct says in print, ethical behavior is based on the relationship
of superior and subordinate worker relationships. If a subordinate observes an
indiscretion by his superior, in all likelihood it will be emulated by the
subordinate. This phenomenon occurs top-down in the whole corporate chain of
command. If it breaks down anywhere in the corporate hierarchy, it will become
visible to the subordinate layers and potentially create a "trickle-down"
effect. This means the boss has to be a role model for ethical behavior; they
must "walk-the-walk" as well as "talk-the-talk." If they do not, it will not
go unobserved by their subordinates. Managers, therefore, should avoid the "do
as I say, not do as I do" phenomenon. They must lead by example. Anything less
is sheer hypocrisy and will inevitably lead to changes in behavior.
It is simply not sufficient to issue platitudes as to what
is and what isn't ethical behavior. The manager must follow-up and assure
ethical behavior is implemented accordingly. In other words, we shouldn't just
"desire" truth and honesty, we must "demand" it. If one person gets away with
an indiscretion, others will surely follow. As such, when writing out a code
of conduct, be sure to stipulate the penalties for its violation.
The success of a business ethics program is ultimately
measured by how well it becomes ingrained in the corporate culture. As we have
discussed in the past, corporate culture pertains to the identity and
personality of the enterprise. All companies have a culture; a way they behave
and operate. They may be organized and disciplined or chaotic and
unstructured. Either way, this is the culture which the enterprise has elected
to adopt. What is important is that in order for an employee to function and
succeed, they must be able to recognize, accept and adapt to the culture. If
they do not, they will be rejected (people will not work with them).
The intuitive manager understands the corporate culture and
how to manipulate it. Changing the Corporate Culture involves influencing the
three elements of the culture: its Customs, Philosophy and Society. This is
not a simple task. It must be remembered that culture is learned. As such, it
can be taught and enforced. For example, a code of conduct is useful for
teaching, as is a system of rewards and penalties. Designating people to act
as watchdogs of the culture can also be useful, but be careful not to create a
climate of paranoia. Ultimately, as a manager, you want to create a culture
that promotes the ethical behavior you desire.
CONCLUSION
We now live in strange socioeconomic times. 40-50 years ago
we normally had one parent staying home to raise the kids. Now it is
commonplace to find families where both the husband and wife are working and
paying less attention to their children, thereby relegating their parenting
duties to teachers and coaches. In other words, the family unit, which is the
basic building block for learning ethical behavior, is becoming severely
hampered.
In business today we have a "fast-track" competitive
mentality which does not encourage a spirit of teamwork but, rather, more
rugged individualism. Nor does it promote employee loyalty. Further, we now
live in a society that encourages people to go into debt, thereby causing
financial tensions.
Bottom-line, ethics is about people and trust.
Consequently, we should be sharpening our people skills as opposed to avoiding
it. We don't need more maxims of how we should conduct our lives; we need to
lead by example. As such, we need more role-models and heroes than we do
paperwork.
Let me close with one last thought on how ethics impacts
business; there is probably nothing worse in business than being caught in a
lie, particularly by a customer. Any trust that there may have been before
disintegrates immediately and business is lost. In this day and age, there is
something refreshingly honorable about a person where their word is their
bond. Ethics just makes good business sense.
Keep the Faith!
Note: All trademarks both marked and unmarked belong to their
respective companies
Copyright © 2010 by Tim Bryce. All rights reserved.
About the Author
Tim Bryce is the Managing Director of
M. Bryce & Associates
(MBA) of Palm Harbor, Florida and has over 30 years of experience in the
management consulting field. He can be reached at timb001@phmainstreet.com
