Tag Archives: Business ethics

Business Ethics and Values Do Not Have Expiration Dates

Walk through the aisles of any grocery story or even convenience store, pick up any product and you will see an expiration date. These dates are for your consumer safety as well as to receive the most benefit from the nutrients within the food product.

Yet, recently, I have come to observe that many individuals in business who profess to be true professionals as well as those in government are demonstrating business ethics or values with expiration dates. Initially statements specific to their behaviors are made without a date. Then realizing that change is more difficult than originally expected or will take additional effort a date is added. If the added date is not made, a new date pops up.

The work ethics associated with these behaviors become a moving object. As new dates are added, the impact of the quality decreases to those who are on the receiving end of these expiration dated values.

For example, how many times have we heard that during the tenure of this leadership or management team it will be the most ethical in the organization’s history? Then as time moves forward, we hear, not from leadership, but outside sources about unethical behaviors. Then leadership makes excuses and sets a new expiration date.

Why business ethics or values now have expiration dates may be connected to the relativism that has affected the U.S. during the last several decades. Relativism has many definitions, but essentially means that everything is truth and is relative to the individual. In other words, values become moving targets or simply are now produced with expiration dates.

The recent meltdown of Wall street, the bailout of Wall Street, the ponzi schemes, the individuals who knowingly violate the law and believe that they are above it are all examples of values with expiration dates. Even before these incredible examples, many of us heard this expression, “Do as I say, not as I do.” This is a values statement with an expiration date.

So how do business leaders and true professionals avoid values with expiration dates? First, make sure that you have a values statement that has been clearly articulated within your organization. Everyone from the bottom up to the top down understands the specific acceptable behaviors and equally unacceptable behaviors.

Next, enforce the values statement. Recent surveys of college graduates and high school students show an increase in cheating and that cheating is acceptable. These surveys also reveal that these cheating young people believe that they have high ethics.

The old expression everyone does it is another justification of having a values statement with expiration dates. In other words it’s okay to cheat to get the best grade in school and when I leave school, I will no longer cheat. If you believe that, I have a bridge I would like to sell you.

Having a values statement may cost you some business in the short term. However, in the long term you will gain far more than any potential short term loses.

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Exercising Moral Integrity in Modern World

Recent Scandals In the wake of the Blagojevich scandal, others come to mind. The foibles of Former New York Governor Elliot Spitzer, former Florida Congr ssman Mark Foley and retiring Idaho Senator Larry Craig, to name a few. In the corporate area, Madoff’s $50 billion Ponzi scheme, caps off years of scandalous reports about Enron, Tyco International, and World Com. The moral faults of corporate leade s con inue to cost investors billions. Is there a modern day standard bearer to guide the common man?

Ancient Warrior Code
According to Shannon French, author, The Code of the Warrior: Exploring Warrior Values Past and Present, the essential element of a warrior’s code is to set definite limits on what warriors can and can not do. In this sense, warriors value honor, integrity, justice and a sense of what is right and wrong. To the ancient warrior, the discernment between right and wrong is like night and day. Clear, obvious, unquestionable. To them, there are no gray areas, no “that depends on what your definition of ‘is’ is “(Bill Clinton). To the warrior, if something is not right, he will not do it.

Ancient Warriors versus Corporate Warriors
In ancient times, one looked to the warrior for guidance to the light; to serve as defenders of moral integrity. Today, though, the warrior, or rather corporate warrior is perceived as mere profiteers. Neocons, using natural disasters, social unrest, changes in regimes and wars- have been used ‘as a natural ally’ of corporate interests. Naomi Klein, in her book, the Shock Doctrine, indicates that heads of,companies, representatives of municipalities stood in the rubble of Hurricane Katrina in New Orleans and thanked God for the solution to the problem of housing in New Orleans. Similarly, PW Singer, in his book, Corporate Warriors: The Rise of the Privatized Military Industry writes that private corporations working for profit have the ability to sway the course of national and international conflict.

Warriors of Light
Paulo Coelho, in his book, Manual of the Warrior of Light made this observation: “Sometimes the warrior feels as if he were living two lives at once. In one o” them he is obliged to do all the things he does not want to do and fight for ideas in which he does not believe…Then all that is needed is a little daring, and his two lives become one.” p 181. Ancient warriors carried out actions that brought them closer to their higher ideal. Some political and corporate warriors, on the other hand have tended to capitalize on the weak. How might we attain warrior of light status?

Friends and Allies
First, we need to de-bunk the myth that warriors are ‘lone wolves.’ Throughout pop western culture, American icons: John Wayne, Rambo, Clint Eastwood, have presented the ideal warriors. These warriors exercise independence of mind, thought and action. Often, they are presented as friendless. A warrior of light, however, appears to revel in the company of friends, followers and allies. Twyan Towery, in his book The Wisdom of Wolves, argues that the ‘strength of the wolf is the pack, and the strength of the pack is the wolf.’ Coelho quotes John Donne and continues in his own words. “No man is an island. He can not fight alone; whatever his plan, he depends on other people. .. p 103.

When selecting alternative courses of action, the warrior, relies upon the wisdom of his closest friends. Prior to committing a whimsical act, how many have been spared public humiliation because a colleague quickly intervened?

Angels
Second, warriors of light recognize that they are fallible and need divine help. Theologians say there roughly 300 references to angels in the Bible. Coelho presents warriors of light as men who steadfastly rely upon angels, God and Jesus Christ.

“A warrior knows that an angel and a devil are both competing for his sword”hand. The devil says: ‘You will weaken. You will not know exactly when. You are afraid. ‘ the angel says: ‘You will weaken. You will not know exactly when. You are afraid.’ The warrior is surprised. Both angel and devil have said the same thing. Then the devil goes on: ‘Let me help you.’ And the angel says: ‘I will help you.’ At that moment, the warrior understands the difference. The words may be the same, but these two allies are completely different. And he chooses the angel’s hand.” p 123. How does the warrior of light know that the purpose for which he is fighting is just and pure? According to Coelho, ‘The warrior of light meditates. He sits in a quiet place in his tent and surrenders himself to the divine light…. A warrior of light knows that in the silence of his heart he will hear an order that will guide him.” p 55.

Open Heart
One would readily suspect that warriors, those who must exact judgment on a daily basis, are driven by hatred and unfettered greed. Instead, according to Coelho, “The warrior of light always keeps his heart free of any feelings of hatred. .. He accepts that his opponents are there to test his valor, his persistence, his ability t” make decisions. They force him to fight for his dreams. It is the experience of battle that strengthens the warrior of light.” p. 87 As keepers of the light, warriors are born with a spark of light. As each day passes, warriors evolve. Their spark flickers into a small and then larger flame through prayer, meditation and connection to the One. We turn to Coelho again for clarification, “Accumulating love brings luck, accumulating hatred brings calamity. Anyone who fails to recognize problems leaves the door open for tragedies to rush in.” p 53.

Conclusion
When the warrior reaches temporary defeat, he is comforted by this, “The warrior of light unwittingly takes a false step and plunges into the abyss. Ghosts frighten him and solitude torments him. His aim had been to fight the Good Fight, and he never imagined that this would happen to him, but it did. Shrouded in darkness, he makes contact with his master. ‘Master, I have fallen into the abyss,’ he says. ‘T”e waters are deep and dark.’ ‘Remember one thing, ‘ “eplies his master. ‘You do not drown simply by plunging in to the water, you only drown if you stay beneath the surface.’ And the warrior uses all his strength to escape from his predicament.” p 129. So too, there is hope for the likes of political and corporate warriors, Blagojevich and Madoff. Get up and aim to respect the true code of the warrior; value honor, integrity, justice and a sense of what is right and wrong.

Dr. Mead, PhD, MBA, MA http://www.ishareknowledge.com is a consultant specializing in human behavior, school and social psychology. She can be contacted at: tonya@ishareknowledge.com

What Are Business Ethics?

Naz Daud asked:

Business Ethics have only come to the fore recently. They state that there is more to business than just making a profit. The new focus is also on how the business treats the environment, reacts with the local community and works with its staff to build a responsible company that is both sustainable and adds value to the people that it interacts with.

“Greed is good” is no longer acceptable to most consumers. The consumer is now better educated with new means at his disposal. High speed internet access and forums like Ecademy now mean that good and bad news travels almost at the speed of thought. They are now demanding more from businesses even though their own ethics at times might be questionable!

Business ethics are now included in most business courses and the top management schools. The top graduates enter the corporate world ready to incorporate what they have learnt in the classroom.

Businesses need to have specific programmes in place to manage their staff and workplace in a responsible manner. They must give social welfare a high priority if they are to maintain their public image. They have to be seen to be recycling their waste and disposing of old equipment in an environmentally friendly way.

Businesses now have to be wary of using sweat shop labour in the third world especially if they treat them badly. Everybody realises that third world country wages are lower but they expect Western companies to treat their employees with some respect and dignity. Businesses that employ children are now frowned upon even though child labour is the norm in these countries.

Many “watch dogs” now exist that “police” most large companies and report any blatant abuse of ethics. Most of these have only been set up in the last twenty years. Most large media organisations also have special reporters whose sole purpose is to identify where breaches are taking place and publicise them.

The top brands in the world need to be extremely careful now. The value of a brand might have taken decades to build but can be destroyed in a matter of weeks. An example of this is when Gerald Ratner made a speech to the Institute of Directors and in humour referred to a cheap necklace that “everyone knows is crap”. These comments served to wipe out over a half a billion dollars of the companies value and played a major part in the downfall of a once thriving jewellery retailer in the United Kingdom.

There are now funds that specialise in only investing in ethical businesses. They refuse to invest in companies that produce weapons or manufacture cigarettes as an example. These funds have taken of spectacularly and have billions of dollars to invest in the stock markets. Before they invest in a business they send their fund managers in to investigate the business fully to see if they comply with their guidelines. If the company is not willing to answer all their questions fully then they might not get approved for investment.

When properly managed and executed the use of business ethics can actually serve to enhance the profitability of the company concerned. The business can proudly declare their values in brochures, newspapers, internet and television marketing campaigns. Reputation is the strongest asset that a company has and maintaining this and the value of their brands is essential to the long term future of the business.

The Tweaking “CC”

All work and no play makes Timmy a dull photog...

Image by I, Timmy via Flickr

by Rick Brenner

When did you last receive an email message with a “tweaking CC”? Probably yesterday. A tweaking CC is usually a CC to your boss or possibly the entire known universe, designed to create pressure by exposing embarrassing information.

Maria opened her inbox one morning and found, among the usual meeting announcements, deadline reminders and spam, a message from Ken. Ken and Maria had had some difficulties, and a low-grade feud had been simmering for some time. So when Maria saw Ken’s name, she felt a twinge. His messages were never good news. And this one certainly wasn’t.

“I need your input for the quarterly report by Friday,” Ken reminded her. That was fine. But he went on, “I hope you’ll make the deadline this quarter.” Less fine. And he had CC’d her boss. Definitely not fine.

Ken’s message to Maria contained a “tweaking CC,” which is a CC to someone whom the sender believes has influence or power over the recipient. The tweaking CC is designed to intimidate.

We use the tweaking CC when we want to rattle people, by tattling on them or informing on them[1]. When used artfully, the tweaking CC provides cover to the sender, who can claim that the CCs were included only to keep everyone in the loop. Usually, this “FYI veil” is pretty thin — everyone can see right through it, except perhaps the sender.

When you receive a message with a tweaking CC, remember:

  • It’s possible that the message you’re looking at doesn’t have a tweaking CC. Maybe the sender added the CCs for some other reason that you don’t know about.
  • Tweaking CCs hurt. Let yourself feel the hurt. Denying the hurt will only cause you more grief later. Get support if you need it.
  • The sender is in pain, too. The sender’s self-esteem is low. Senders of tweaking CCs often feel that it would not be enough to simply let you know that something is amiss — it’s necessary to tell someone really powerful.
  • Taking any action at all within the first hour or two is unwise — you’re very likely to make things worse.
  • Defending yourself gives credibility to the sender.
  • Defending yourself in email is risky because emails are so easily misunderstood.

Senders of tweaking CCs often feel powerlessWhat about Maria? She went for a 20-minute walk. Later, she dropped in on her boss. She explained that she regarded the email from Ken as a tweaking CC. Her boss instantly recognized what she meant by the term, and told her that when he received the message he recognized it as such. He asked Maria if she wanted anything done about Ken’s behavior, but Maria declined the offer, saying that since all was well between the two of them, she felt better, and she would find a way to work things out with Ken.

When you receive a message with a tweaking CC, breathe. Center yourself. Recognize your own power — the sender certainly does.

Business Ethics: Why They Are Important For a Company and Its Success

Martha Vasquez asked:

Business ethics is an interesting branch of business theory, primarily because of the fact that they are inherently interesting in a market economy. People tend to be extremely distrustful of corporations in market economies and the bigger they are, the worse that problem of trust usually gets. Business ethics therefore are politically charged in many different circumstances and that in turn serves to make them interesting. Aside from this academic interest however, business ethics are also important for a company and its success. Here are some ways in which this is true.

Public Image

It is impossible to discuss business ethics as a branch of academia without taking a look at the relationship between business ethics and public image. Each corporation has a particular public image, which represents the way in which the public views the corporation. Wal-Mart, for example, has a terrible public image. Toyota, on the other hand, has a very positive one. These public images are the result of a number of different things, but they are primarily the result of the way in which a corporation acts with respect to the different things around it.

A corporation’s environmental policy, the way they treat their employees and the way they treat the communities they exist in are all part of their overall behavior and this in turn is the principle factor in determining their public image. As proof of this, you will notice that even though Wal-Mart makes products that have a decent quality and an extremely low price, they still have a negative public image.

Since public image is largely a result of company behavior, business ethics play a large role in determining public image since they determine behavior. And public image is important to success in most cases, which is one of the reasons as to why business ethics are important to a company’s overall success.

Investment

Another reason that business ethics are important is the relationship they have to investment. When a person or an entity is considering investment in a particular stock, there are a number of things they take into account. Aside from the quantitative factors surrounding a company’s profit margin a future prospects, consideration is also given to a particular company from the point of view of the qualitative aspects such as their public image and the products that they happen to sell. All of these things are taken into account before the final investment is made.

Therefore, a company that would like to encourage extra investment is a company that has a strong sense of business ethics. Part of business ethics is responsibility to the investor and for that reason companies with strong reputations in the field of ethical business behavior are also companies that tend to attract more investment from people that are new into the market. Investment is most definitely important to success.

Partnerships

In the business world, joint ventures happen all the time. They happen all the time because they are ultimately of great importance to the bottom lines of businesses. A business can be made or broken on just one joint venture and part of the reason that joint ventures are successful is that they combine the forces of two extremely powerful companies on occasion.

If you want your company to do well in joint ventures, then you need to have good partners. The only way to get good partners is to have a good reputation both in terms of a track record and in terms of your business overall. And of course, the best way to get a good reputation is to ensure that your company has a strong tradition of ethical business behavior.

Introduction To Business Ethics

Jonathon Hardcastle asked:

Is it possible for an individual with strong moral values to make ethically questionable decisions in a business setting? What affects a person’s inclination to make either ethical or unethical decisions in a business organization? Although the answers to that question are not entirely clear, there appear to be three general sets of factors that influence the standards of behavior in an organization; individual factors, social factors and opportunity.

Several individual factors influence the level of ethical behavior in an organization. An individual’s knowledge level regarding an issue can help to determine ethical behavior. A decision maker with a greater amount of knowledge regarding an object or situation may take steps to avoid ethical problems, whereas a less-informed person may unknowingly take action that leads to an ethical conflict. One’s moral values and central, value-related attitudes clearly influence his or her business behavior. Most people join organizations to accomplish personal goals. The types of personal goals an individual aspires to and the manner in which these goals are pursued have significant impact on that individual’s behavior in an organization.

A person’s behavior in the workplace is, to some degree, determined by cultural norms, and these social factors vary from one culture to another. For example, in some countries it is acceptable and ethical for customs agents to receive gratuities for performing ordinary, legal tasks that are a part of jobs, whereas in other countries these practices would be viewed as unethical and perhaps illegal. The actions and decisions of coworkers is another social factor believed to shape a person’s sense of business ethics. For example, if your coworkers make long-distance telephone calls on company time and at company expense, you might view that behavior as acceptable and ethical because everyone does it. Significant others are persons to whom someone is emotionally attached-spouses, friends, and relatives, for instance. Their moral values and attitudes can also affect an employee’s perception of what is ethical and unethical in the workplace.

Opportunity refers to the amount of freedom an organization gives an employee to behave ethically if he or she makes that choice. In some organizations, certain company policies and procedures reduce the opportunity to be unethical. For example, at some fast-food restaurants, one person takes your order and receives your payment and another person fills the order. This procedure reduces the opportunity to be unethical because the person handling the money is not dispensing the product, and the person giving out the product is not handling the money. The existence of an ethical code and the importance management places on this code are other determinants of opportunity. The degree of enforcement of company policies, procedures, and ethical codes is a major force affecting opportunity. When violations are dealt with consistently and firmly, the opportunity to be unethical is reduced.

Business Ethics: Three Tips to Stay in Integrity with Yourself

Sally Rhys asked:

Wow — every day seems to bring us a new story about business ethics wrongdoing! Is America headed to hell in a hand basket because of a serious lack of ethics at the highest level in American business? Or, it is just that ethical transgressions are more visible now? Or is it that the media reports more? Whichever it is, I urge you to be concerned about business ethics, even if simply for yourself.

A few facts will raise your awareness about the current state of ethics in American business. The Ethics Resource Center notes that the number of ethics programs is on the rise in corporate America. Unfortunately, the center also notes that ethical misconduct is high. (Google “The National Business Ethics Survey” for more details.) Other research shows that a majority of people in America have quit a job due to an ethical concern at sometime in their lives. (Google “lrn” for more details.)

You may believe there isn’t much you can do about ethics in American business. But, you can choose to follow a high standard of ethics for yourself.

Here are three simple tips to stay in Integrity with Yourself:

1. Listen to your gut. If it doesn’t smell right, it probably isn’t. Don’t risk your reputation by going along with something that is fishy. Sometimes in the work place, what the policy says to do and what people are doing are two different things.

For instance, if you go to lunch with a co-worker to discuss business and you each spend $11.95, which is all you can claim on your business expense forms. But, your coworker may encourage you to submit a claim for $23.95 (since the policy says you don’t have to submit a receipt until the amount is over $25.00, per IRS rules.) Your coworker may even say everyone pads their expense report. This action would be a quick way to double your cash back, but you know it isn’t right. Don’t cave-in to the peer pressure or temptation. Just don’t do it!

2. Ask questions. Sometimes what you know is not the whole story. Ask questions to fill in the gap. Don’t assume. Something you don’t know may make what looks wrong actually be a good thing. As the former Director, Ethics and Compliance for a $1.5B company, I learned to ask questions before forming a judgment.

For instance, I know of a case where a manager became aware that his employee had lied about his whereabouts during the work day. One appropriate action would have been to discipline the employee or maybe even fire him. Another appropriate action would have been to extend a little compassion for the employee, who was under some external stresses, and work more closely with the employee to help him manage his time better. Asking a few simple questions revealed the external stresses, which opened doors to alternative resolution of the problem.

3. Keep an open mind. There is rarely an unequivocal right or wrong answer in any ethical issue.

For instance, an employee reported to me that he believed a co-worker was falsely claiming an important professional certification. I asked him why he thought that, and he said that the person didn’t seem to demonstrate the knowledge base required for certification. He also said he had checked the certifying agency’s website to find the co-workers name without success. Since falsification of job qualifications is a serious offense, I went to the website to check for the name too, and asked an internal recruiter to verbally check with the certifying agency.

As it turned out, the person under suspicion had registered at the website with his formal name, not the nickname he used at work; as a result his name wasn’t recognizable at the website. Only by triple checking the website and making a phone call to the certifying agency were we able to get the whole story.

Stay in integrity — do what YOU think is right and stay in good conscience.

Business Ethics and Unethical Practices

Verena Veneeva asked:

The study of business ethics and its implications for different stakeholders have seen tremendous growth in the past few decades. There has also been a rise in the use and development of codes of ethics and announcements for ethical practices by many firms; however companies are still criticized for their unethical practices at different levels (Papers4you.com, 2006). Business ethics, according to the literature has been entrenched with the philosophical details of Ethics (Trevino & Nelson, 1999). Ethics has been defined as ‘the activity of examining the moral standards of a society, and asking how these standards apply to ones life and whether these standards are reasonable’ (Velasquez, 1998; p. 11).

The literature on business ethics is divided on its views about the motivation and reason for businesses to have an ethical dimension. Drawing upon Harrison (2001), there are two major schools of thoughts, firstly those who suggest that firms are profit generating institutions and therefore business ethics is yet another way to attract customers, secondly those who support corporate conscience and intrinsic motivation for the adoption of business ethics.

Business ethics has been considered very subjective in nature and according to Paul (2001) is considered a function of time and culture. It has been established that with the passage of time business ethics have evolved and also that the cultural values and norms drive business ethics within national and regional boundaries. One of the major studies regarding the national values has been conducted by Hofstede (1983). According to this research, which was only based on four indicators i.e. individualism, power distance, uncertainty avoidance and masculinity, there is a great deal of differences among values across different nations and consequently the business ethics. Globalization combined with standardization has made businesses financially efficient but at the same time poses questions regarding the standardized codes of business ethics across national boundaries.

Vinten (1991) has divided the business ethical issues at different levels i.e. international business, domestic business and professional ethics. At the international level ethical issues include free-masonry and socialism versus capitalism; at domestic level these include religious dimensions, social marketing and ethical education; and lastly at the individual level these include bribery, corruption and data protection (Papers4you.com, 2006).

There are many reasons and criticisms for the failure of adoption of ethics in the business world. Firstly, the concept is considered to be overly theoretical and it also negates the basic purpose of any business i.e. to create shareholder’s wealth. Secondly, it has lack of direction and unanimity across different cultures and academic groups. Lastly, it has many inherent unresolved dichotomies that according to Sternberg (1994) make it a case of rejected relativism.

References:

Harrison, J. (2001), Ethics for Australian Business, Prentice-Hall, French’s Forest

Hofstede, G. (1983), The Cultural Relativity of Organizational Practices and Theories, Journal of International Business Studies, Vol. 14, No. 2, pp.75-89

Papers For You (2006) “S/B/92. What distinguishes ethical from unethical business activity and how significant are the principles of business ethics in modern business?”, Available from http://www.coursework4you.co.uk/sprtbus21.htm [17/06/2006]

Papers For You (2006) “S/B/49. ‘Should businesses strive to be ethical?’ Critically Discuss”, Available from Papers4you.com [18/06/2006]

Paul, S. (2001), Cultural and Business Ethics, Cross Cultural Management: An international Journal, Volume 8 No. 1, pp 22-35

Sternberg, E. (1994), Relativism rejected: the possibility of transnational business ethics, in Hoffman, W.M., Kamm, J.B., Frederick, R.E., Petry, E.S. Jr (Eds), National Conference on Business Ethics. Proceedings from the 9th Conference on Business Ethics Sponsored by the Centre for Business Ethics at Bentley College, Quorum Books, New York, NY, pp.143-50

Trevino, L.K., Nelson, K.A. (1999), Managing Business Ethics: Straight Talk about How to Do It Right, 2nd ed., J. Wiley & Sons, New York, NY

Velasquez, M.G. (1998), Business Ethics: Concepts and Cases, 4th ed., Prentice-Hall, Englewood Cliffs, NJ

Vinten, G. (1991), Business Ethics: Busybody or Corporate Conscience?, Managerial Auditing Journal, Volume 5, Number 2, pp. 123-144

Ethics in Business – From Compliance to Commitment

Rana Group asked:

By the time this article goes to print all of us will surely have had our fill of news reports about Conrad Black’s infamous lawsuit. We’ll likely be numb to the never ending allegations of fraudulent practices at Nortel. But, how many of us as human resource professionals will be asking, ‘What does this have to do with me?’

It seems that, by and large, human resource professionals have been quite happy to have the accountability for their company’s business ethics and code of business conduct rest with their legal or audit departments. In so doing, human resource professionals miss an opportunity to help their companies shift from merely being compliant with the law to demonstrating their company’s firm and unwavering commitment to build an ethical business culture.

The ‘iceberg model’ helps us to better appreciate the influences that may undermine a company’s policies and practices with respect to business ethics. Think of the ‘the Law’ and your company’s Code of Business Conduct Policy as the tip of the iceberg, visible above the surface. Now, think about the influences that exist below the surface lurking within many companies. Things like:

? Pressures to conform (“Hey, we always take off early Friday afternoons, you need to join us or else someone’s going to take notice”)

? Desire to please (“I picked up the tab for a lunch I had with my boss. He told me it was the only way he could expense it without needing to get further approval. I did it because I wanted to stay on his good side!”)

? Accepted practices (“Don’t worry, we give box seat tickets to all our clients and they sure don’t have any problem with accepting them!”)

? Performance drivers (“Hey, maybe we should just alter our numbers a bit. If we do, we’re sure to be in the top category for a bonus this year!”)

When asked, most of us do not hesitate to say that we are ‘ethical’. In fact some people are offended when asked to sign a document confirming they have read and understood their company’s Code of Business Conduct Policy. However, what we fail to recognize and appreciate is our ability to rationalize our own behavior. Sometimes we justify our actions so convincingly that we no longer even perceive that what we are doing is inherently wrong or unethical. For example:

? “I’ll just pad my mileage claim this month, it’s not like I haven’t worked hard. The company owes it to me.”

? “I know I shouldn’t provide my son with supplies from the office, but university is so expensive and, I know this company can afford the photocopying I do and the pens and paper I take.”

? “If this company can afford a company jet, hey, they can afford for me to take a few sick days to ski!”

It is a slippery slope once employees believe they can justify actions and decisions that are fundamentally unethical. Reading a code of conduct policy and signing a piece of paper every year does little to help employees grasp and understand the essence of ethical conduct. Nor does it help employees apply good problem solving skills when they are faced with ethical dilemmas in the workplace. It may surprise some to know that virtually all the companies who have become household names (including Enron) as a result of their unethical business practices had well articulated policies and codes of conduct dutifully signed off yearly by their employees.

Few companies are making the effort necessary to address these underlying influences and regrettably, only those that do will truly build ethical cultures. By taking the following 7 steps, human resource professionals can play a critical role in helping their companies move beyond compliance, raising the bar to demonstrate their deep commitment to developing an ethical business culture.

1) Adopt a multi-disciplinary approach to building an ethical culture

2) Communicate your Code of Business Conduct in plain language

3) Ensure relevant policies, processes and practices align with your Code.

4) Develop ethical leadership

5) Gain employee buy-in

6) Facilitate reporting

7) Model the way

Adopt a Multi-Disciplinary Approach

Human resources must have a ‘seat at the table’ when matters of business ethics and code of conduct are discussed. That said, it would be wrong for human resources to act independently. Companies that are truly committed to developing ethical cultures adopt a multi-disciplinary approach that includes representation from their legal, financial, communications and human resource disciplines. Working together they develop a strategy that enables the development of an ethical culture that is truly sustainable.

Use Plain Language in Your Code

Most human resource departments do provide employees with a personal copy of their company’s Code of Business Conduct Policy at the time of hire. Many companies host their Code of Business Conduct and related policies on their intranet. However, few companies have taken the time to provide a document that is actually readable! By working with their partners in Communications, Human Resources can provide employees a document that is both easily referenced and easily read.

Align Policy and Practices

More than one company has been surprised to learn that upon review, some of their policies and accepted practices are not consistent with their company’s Code of Business Conduct Policy. Human resources can ‘lead the way’ by ensuring its policies and practices are ‘squeaky clean’; not only in the way they are written, but also, in the way they are executed. However, it is not only human resource policies that require review, virtually all corporate policies need to be reviewed in light of the company’s Code of Business Conduct Policy to achieve proper alignment.

Develop Ethical Leadership

Developing ethical leadership ought to be a primary goal of every leadership development program. Surely it is the role of human resources to ensure the topic of business ethics is adequately addressed in all leadership development programs. Not only do leaders need to know and understand their company’s Code of Business Conduct Policy but, they must also understand the role they play in facilitating an ethical culture. This is just as true for leaders at the frontline as it is for leaders at the executive table. Leaders often justify their own behaviors based upon what they see modeled by those to whom they report. Ethical leadership depends upon each leader understanding they are responsible and accountable for their personal actions and behaviors regardless of the actions of those at more senior levels of the company.

Demonstrating ethical behavior as a leader is inextricably linked to building trusting relationships, the cornerstone of many leadership development programs. However, while many of these programs address the matter of trust and trusting relationships, few make the link to ethical behavior and the expectations of leaders. Whether through instructor-led training or on-line training, every leader needs to have exposure to the topic of business ethics. Leaders must be fully cognizant of behaviors that develop a strong ethical culture and those that erode that culture. They need also to understand their accountability when employees raise ethical issues and/or report unethical behavior.

Gaining Employee Buy-in

Ethical cultures are built when employees, like leaders, have exposure to training that helps them differentiate between ethical and unethical behavior. Depending upon the size of your company this can be accomplished either through instructor-led or on-line learning modules. Regardless of the methodology, employees need to be exposed to different scenarios and si
tuations that they may face within their own work. Employees need an opportunity to learn in a non-threatening environment what is appropriate and what is inappropriate. Your company’s Code of Business Conduct Policy is an important topic that must be addressed not only in all employee development programs but in your company’s orientation program for new employees.

However, learning in and of itself is insufficient. Building an ethical culture requires continuous reinforcement through a well thought out and on-going communication strategy and plan. Ethics needs to be woven into company newsletters, be reinforced through visual cues such as posters, and integrated into team discussions if a company is going to make significant head-way towards building a strong ethical culture.

Facilitate Reporting

Companies need to provide their employees with a means of reporting behaviors, decisions or actions they perceive are unethical and contrary to their company’s Code of Business Conduct Policy. This is best facilitated by providing access through a third party provider although many smaller companies encourage such reporting to their legal department or external legal counsel. That said, it is only through both educational and communication programs that employees understand their obligation to report unethical behavior and to realize that their company will fully support their actions provided, of course, that the reporting of unethical behavior is not maliciously motivated.

Model the Way

Finally, human resource professionals must model the way. For new employees, human resource employees are like a beacon signaling the strength of a company’s ethical culture. And, whether we realize it or not, the manner in which we conduct employment searches and implement recruitment practices sets the tone. Employees tend to assess the strength of a company’s ethical culture based upon their own personal experience and the experience of those with whom they have a close work relationship. They are sensitive to preferential treatment whether in regards to recruitment, compensation, performance management, or succession management and promotions. Human resource professionals must demonstrate through their actions an unerring commitment to ethical business conduct.

Since the Enron fiasco it’s hard to pick up a daily paper without seeing some reference to or allegation of unethical business practices. And, based upon these articles it would be easy for us to assume that unethical behavior is limited to those at the very top of organizations. This is simply not the case. While building an ethical culture depends upon the full commitment of senior executives to set the standard of acceptable behavior, each and every employee directly influences the strength of your company’s ethical culture through their day-to-day actions. Cleary, code of business conduct policies are insufficient in and of themselves to shape ethical behavior. Human resource professionals must help their companies move beyond compliance with the law and, they can do so by ensuring each and every employee develops the knowledge and skills necessary to build strong ethical cultures.