Business code ethics need to be part of your organization’s culture; and recent business ethics cases prove that need. Stories of large business fraud to small business embezzlement are being reported with ever-increasing frequency; unfortunately business ethics are under attack.
How often in your business day do you need to make decisions? What is the basis for those decisions? Do you have a business vision statement and a mission statement that helps you with your decision making? That is, can you align your decisions to your vision and mission? Many business owners and managers face challenges in making decisions; not because they can’t decide, but because they need to make a decision without an ethical framework.
Developing a business code of ethics is necessary for all business ownership. You need to identify how you want your business to be operated. If you have your ethics code written and available, making tough decisions will become easier.
What should a business code of ethics include?
- A focus on the organization’s long-term direction (the vision) and the shorter-term goals (the mission).
- Identification of values that are important to the business. A sense of your business culture.
- What ethics means to your business: your definition of business ethics.
- Acceptable workplace activities and behaviors.
- Unacceptable workplace activities and behaviors and the sanctions or consequences that will result if unacceptable behaviors occur.
- Orientation and training that will be provided to support the values and culture and ethics of the organization.
- The role of communication and ethics: how will employees and other stakeholders understand what you value, or don’t value, without communications.
- The relationship and responsibility of the organization within its community.
- Industry standards and practices; and how your organization is focused on meeting or over-achieving against those standards.
For the most part we all like to believe that we are ethical in our decisions, and that is likely very true where there are clear-cut right versus wrong decisions. But the bigger challenge lies in making ethical decisions between right versus right options. These types of decisions are often the most difficult.
For example, is it right to continue paying your executives a high salary while you cut the work hours (and therefore the net pay) of your lower-paid employees? Is it right to provide a price discount to one customer but not the other? Is it right to reward one employee with a gift certificate for work well done on servicing a large account when other employees have worked hard to support smaller assigned accounts?
Your code of ethics should be written in clear enough language that these, and other, decisions are easy to make and easy to support. Additionally your ethics code needs to provide a basis or framework for assessment. The framework could be questions to be asked and answered.
For example, if you are faced with a significant issue:
- Identify and determine the different points of view on the situation.
- Define what the cost is (both tangible and intangible) of the proposed solution(s)?
- Affirm that your vision, mission and values statements clearly support your proposed solution(s); in other words, are they aligned? (If the answer to that question is no, then either your solution is wrong or your vision, values and missions statements don’t accurately reflect your culture).
- Does the proposed solution or decision ‘do no harm’ (this is the basis for most ethical reasoning)?
Reports of recent business ethics cases highlight the need for businesses to operate in an ethical manner. Your business brand and identity is tightly connected to the values and the ethics you demonstrate, and commit to, in your business. Build a business code of ethics; and make sure you ‘live’ to your code; you will build a stronger, more effective and more sustainable business.