If Good Ethics is Good Business,
What’s the Problem?
By Frank C. Bucaro
the number of cases of ethical scandals in corporate America
continues to increase, some companies are still not deterred. It
takes as little as one employee’s action to create a major ethical
breech. Yet, some company leaders still do not understand.
man in his upper twenties worked diligently for the financial
services company for five years. He was well versed in the
legalities of the industry and received multiple awards for
surpassing his sales’ goals.
his top producers decided he should get compensated for doing
business with the young man’s company. Of course this type of
compensation is illegal and unethical. The producer actually put
his desire in writing. Once the young man received this letter, he
took it directly to his manager. His manager says, “Look, this
stuff happens. You need to be a team player and not make such a big
deal of his request. This stuff has been going on before you got
here and will continue to, so just pretend this never happened.” It
was not long after this occurrence, the young man left the company.
He did not want to be there when the cards fell. Sure enough, not
one year later, the company sold off this department because its
sales were lackluster.
know that being ethical will help business, what is the problem?
The problem is that it’s difficult to remain committed to high
ethical standards. Not only do great leaders know that ethics is
good business but they include the most important and most neglected
step. They communicate the importance of ethics by their actions.
These successful leaders do the following:
Develop a Code of Ethics: Remember that annoying kid from your
childhood game-playing days jumping up and down shouting “I didn’t
know! That’s not fair!” when you explained “You’re out!” You might
face a similar situation in business if ethics and compliance issues
are viewed as arbitrary or ambiguous. The stakes, however, are
greater in business.
of Ethics helps to negate the argument, “I didn’t know.” Most
businesses and most employees view themselves as ethical. The Code
of Ethics helps to remove ambiguity and clarify what is acceptable.
Introducing it early on in the employment process, and continually
reinforcing the importance of ethical behavior can save the
organization time, money, and embarrassment. It also communicates
to the employees that the Code is not just a statement framed on the
walls. The entire company abides by this code, believes in this
code and sees the code in action on a regular basis.
Design an ongoing ethics training program: Asuccessful training
program does not stop with one presentation. An ongoing approach to
training employees on ethical decision-making and the company’s
ethical culture is paramount.
State of Illinois has recently come under much scrutiny for having
an online ethics test mandatory for all its employees. It was
slated to take about 30 minutes to complete. Some employees were
reprimanded for completing their test in ten minutes. These
employees were asked to sign a non-compliant packet, when in fact,
they believe they were compliant with taking the test. The message
is, this online test, is not appropriate training. It’s a test that
takes some participants 10-30 minutes. How effective can a
30-minute online ethics test be in training the employees about
making ethical decisions, working with customers, and developing an
Support and reward ethical behavior in the workplace: In a study
done by Reuters (October 12, 2005), more than half of U.S. workers
have seen at least one type of ethical misconduct in the workplace.
However, 45% of these workers did not report violations because they
feared retaliation or felt that nothing would be done to denounce
the unethical behavior.
leaders in an organization may not have to worry so much about
catching the unethical behavior if they rewarded the ethical actions
of their employees. The saying “An ounce of prevention is worth a
pound of cure” applies to the health of an organization as well as
health of a person!
are a few examples on how to reward ethical behavior:
a simple process known throughout the company, to report ethical
actions. Possibly a box, similar to a “comments/suggestions
box” where any employee can provide a documented example where
they witnessed someone taking the high road and following the
company’s Code of Ethics. If you have a process where employees
can report unethical conduct, do the same for the ethical
leaders can hand write a note of congratulations and thanks in a
specific situation where ethical behavior was demonstrated. It
is important to do this even if the sale is not completed!
Publicly acknowledge the person for their ethical behavior. This
accomplishes two things; first, its shows that ethical behavior
is not only seen, but also appreciated, and it communicates this
positive message to all employees. Soon, all employees want to
be acknowledged for the same reason. What would this do for your
Developing a healthy, robust, and ethical organization is not easy.
It takes courageous leaders who not only know what is right but ones
who are willing to put forth the time, effort and resources needed
to ensure that the entire company is well prepared to take the high
road and conduct themselves ethically. This process is no simple
feat, but one that will ultimately determine the success or failure
of your business.
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