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Business Ethics – The Foundation for Long-Term Success
Organizations often tout their code of corporate ethics on their websites, clearly outlining their commitment to core values of integrity, respect, diversity, and opportunity. But how well are these values actually demonstrated in the workplace environment and the daily interactions between management and the remaining workforce?
Let’s first discuss responsibilities of the decision-maker. Management’s actions are the key deciding factor in its ability to drive corporate ethics. If management performs its duties in a moral way, then it will pay equal emphasis to the effects of its business activities on its workforce and customers while sustaining its organization’s ability to remain competitive. If management decides to act solely in self-interest, then it does not consider the consequences of its actions on the remaining workforce.
It is important to note that workforce is a direct reflection of management’s actions. Taking a lesson from the real world, let’s consider the example of Tyco International Ltd., a leading security systems company that was the subject of a corporate scandal with far-reaching consequences. The scandal involved two senior executives who led a scheme involving stock fraud, unauthorized bonuses and falsified expense accounts that ran counter to the organization’s code of ethical conduct. The Tyco scandal appears to be systematic and organizational due to the participation and awareness of Tyco’s employees. Tyco’s example demonstrates that workforce represents management’s actions and overall tone at the top.
If you are unsure about the degree of ethical values demonstrated by your organization, see the list of key questions I’ve compiled below. Management must emphasize these areas to lead by example and ensure its organization’s long-term success.
Does management establish an environment of workplace diversity and inclusivity? Great leadership recognizes that society is made stronger by the fusion of different experiences and ideas brought together. When employees are valued for their ideas and participate in the decision-making process, this leads to high performance and trust. Organizations today recognize that workplace inclusiveness is a core component to achieving and sustaining their competitive advantage. When individuals work together as a team, and each member’s input is valued, the organization will see a greater level of participation and high quality work products and services.
Do management’s actions represent best practice? Best practices are considered principles or standards of excellence. They are a key driver of the organization’s ideals, ethics, and aspirations. If the actions of management are based on best practice, then the organization will ensure a positive brand image, a strong emphasis on ethics, trust between the cross-functional workforce, and sustainable competitive advantage. By promoting best practices, an organization is aspiring to ensure accountability, transparency, and public good.
Are corporate values closely aligned to management’s deeply held commitments? This question suggests that moral commitments extend beyond the corporate-defined rights, duties, and standards that apply to the entire workforce. At the end of the day, it all boils down to the deeply held commitments of management as the decision-makers. If the decision-maker is committed to taking a higher moral ground then his/her decisions are likely to benefit its workforce and customers, and prevent any negative or adverse impact. On the other hand, decision-makers in pursuit of personal interest are more liable to perform unethically, and without considering the organization’s ethical values.
By demonstrating its ethical leadership through management’s responsibilities, organizations ensure new opportunities that propel them into greater competitive advantage. By establishing inclusive workplace environments, demonstrating best practices, and aligning corporate values to management’s own commitments, organizations prevent turnover of talented professionals, ensure high performance teaming, and ethical leadership that leads to greater innovation and long-term success.
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