Ethics is a choice with consequences
Workplace ethics is not a new or unknown concept. Virtually every employee and manager understands what being ethical is, what it looks like or what being unethical entails.
This illustrates an important point relative to ethics management - that employees almost always already know what is right and wrong in the workplace. Consequently it should be recognized that the primary purpose of ethics policies, systems and procedures is not to teach employees wrong from right, but rather to reinforce and clarify what constitutes acceptable and unacceptable behaviour.
Another key factor is that ethics, in essence, is concerned with what’s right or good. Ethics therefore involves moral choices between right and wrong, and good and bad. In the workplace this plays out relative to behaviour, actions, decisions and strategies.
Understanding the implication of these factors is necessary to achieve ethical behaviour or an ethical outcome: namely that managing and improving workplace ethics centres on influencing the ethical choices employees make - rather than repetitively telling them what they must not do.
It follows that it is important to understand what factors influence those choices. In the workplace such choices are mostly determined by the organisation’s values, by relevant laws, rules or regulations, by the culture of the organisation and, crucially, by the leadership of the company.
Of these factors, leaders are widely recognized as exerting the greatest influence on behaviour - and hence ethical choices. As role models, they effectively set the ethical standards of the organisation by the values they demonstrate, by what they say and do, and by what they don’t say and do. And the role model effect is very effective (or destructive for negative leadership conduct) in terms of employees emulating what they see, far exceeding the impact of instructions or policies. The leader’s main role relative to ethics is thus to consciously and actively influence ethical choices towards an ethical outcome.
Ideally, the leader’s role should be supported by aligned values, culture, policies, systems and procedures within the business. The distinction to be noted is that while values and culture can make a noteworthy contribution to shaping employee behaviour, this influence is limited to the actual values and the experienced culture of the business, not the framed or printed versions.
A particular challenge to workplace ethical choices is the widely-held view that there are different values for different people. Indeed, personal values can differ widely, as they are affected by a great variety of factors including upbringing and different norms in different groups of society – and they can therefore also differ from the organisation’s values. It is, however, not only appropriate but essential that in the workplace the organisation and its leadership espFouse a set of values that reflects what is acceptable in that environment. Leaders need to recognise that their role is not to accommodate the full spectrum of values – from impeccable to appalling – amongst employees and stakeholders, but, instead, to align their people behind the ethical values, criteria and standards by which their organisation strives to operate.
A difference that should be accommodated is the way the values manifest themselves in practice. A good example is the value of respect. While respect would undoubtedly enjoy overwhelming support from most organisations and individuals, people differ in the way they express it. For example, is it respectful to look at one’s superior directly when being addressed or should one lower one’s eyes? The answer depends on factors that include the prevailing company culture. The key issue is to expose and explore the differences as a route to achieving agreement on what is appropriate within the context and goals of the organisation.
Yet, while it is self-evident that an ethical organisation should be synonymous with ethical choices and decision-making, it does not mean that making the right decision is always easy. Circumstances can arise when it seems hard to know what’s right. This is particularly so where decisions entail two desirable but mutually incompatible ‘rights’. This can occur as a conflict between two ways of resolving a problem where each option represents a right thing to do. Such ethical dilemmas are not to be confused with “moral temptation” – the employees who stole from the company did not face an ethical dilemma!
One source of ethical dilemmas is in the realm of the triple bottom line, where economic, social and environmental interests can conflict with each other. This can arise, for example, between social and environmental priorities when business development would damage the environment but would also create employment and training opportunities for local communities. So too, cheap imports can support customers by offering more affordable goods, but could mean sacrificing the benefits of local production and the habit of buying products manufactured at home. Resolving such ethical choices successfully will continue to become more important given the increasing emphasis on the welfare of people and the environment.
Yet the ethics of right versus right choices is often ignored in the face of more frequent right versus wrong issues. It warrants particular attention for two reasons: because right versus right issues are likely to be the toughest of ethical decisions to make, and because ethical dilemmas are likely to exert a significant influence on an organisation and the individuals involved.*
In making decisions related to these ethical right versus right choices, an organisation needs to recognize that its decision may not be shared by other stakeholders who perhaps interpret the situation differently. This means that the company has to improve its communication about such choices. It may not persuade everyone to its view but, in the absence of its own explanation, even fewer people may understand the choice. This kind of communication can also serve as a check and balance as to whether the reasoning and choice will hold up to scrutiny. If the organisation is uncomfortable about having its choice made public, the choice could be a bad one.
The consequences of unethical choices are often a very visible facet of ethics. When there is a breach of ethics, companies can face falling share prices and suffer reputational damage. They can incur fines, losses and the cost of damages. Guilty individuals have also lost their positions and sometimes their freedom following jail sentences. Another significant consequence of bribery and corruption, as a notable example of ethical failure, is that it adds to the cost of doing business - but, crucially, without adding corresponding value when, for example, only a portion of the full contract amount is productively employed towards the delivery of the product or service.
These costs and consequences illustrate not only why ethics matters and why it is so important to build ethical organisations, but also that the cost of ethical failure is really high - far higher than any organisation should consider affording.
*Chapter 5 of Ethics: Giving a Damn, Making a Difference addresses ethical dilemmas in depth